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ski season, retail sales declined 9 percent compared with the same_ th months in the prior_ ski season.. <br />Once again, however; thisig more likely a result of September 11 rather than the drought. Since this ski <br />season was overshadowed by the aftermath of September 11, it will be extremely difficult to assess the <br />impact of the current drought on the 2001 -02 ski season. <br />Economic Impact on Agriculture <br />Agriculture is one of the state's most important economic sectors. Agriculture also encompasses a large <br />share of land area in Colorado. Indeed, agriculture accounts for 48 percent of the state's land area. In <br />addition, agriculture employs 3.9 percent of the state's work force and accounts for 3.5 percent of the <br />state's wages. Colorado boasts both a large livestock industry as well as a diversified crop industry. <br />Over 60 percent of the state's farm cash receipts are from livestock and approximately 31 percent of the <br />state's farm cash receipts are from crops. <br />A prolonged drought will negatively affect the state's agriculture sector. The economic impact will <br />typically result in a decline in farm income and employment. Profitability in the state's livestock sector <br />will be negatively affected by higher prices for feed grain that result from less supply. Thus, ranchers <br />will need to decide between paying higher prices to feed their animals, thereby earning less income or <br />selling off their livestock because of higher feed prices and thus produce a glutted market. The glutted <br />market will bring the prices received by ranchers for cattle lower and ranchers will earn less income. In <br />addition, the state has a large manufacturing base that processes food products. In total, manufacturing <br />accounts for 9.3 percent of the state's work force and 12 percent of those workers are employed in food <br />products manufacturing. Thus, if the drought were to affect livestock and crops, the impact would be <br />seen in agriculture income and employment as well as manufacturing income and employment. <br />Experience with the 1977 Drought <br />Evidence from the 1977 drought shows that the impact of the drought on ranchers and farmers was <br />subtle. Typically, the impact of drought on agriculture is hard to discern because of the enormous <br />amount of federal assistance available to farmers. During the 1977 drought, cattle and calf inventories <br />actually increased five percent, contrary to what one would expect to happen. However, total income <br />from crops declined 2.8 percent in 1977 after federal assistance. Without the federal assistance, final <br />livestock and crop production would have been much worse. <br />Experience with the 2002 Drought <br />Currently, there is little real evidence to discern the impact of the 2002 drought on the agriculture sector. <br />Indeed, most of the evidence will not be available until late in 2002 when the impact on the livestock <br />industry and the impact to crops from lack of precipitation will become known. So far, the only impact to <br />agriculture that is known is the impact on the winter wheat crop. Approximately 19 percent (452,000 <br />acres) of the winter wheat crop has been abandoned (planted, but not harvested) so far in the 2002 growing <br />season. This equates to approximately $41.9 million in lost farm revenue for Colorado's farmers. <br />Moreover, to compound the difficult situation for farmers, winter wheat prices are down 8.2 percent in <br />mid -March 2002 compared with mid -March 2001. In addition, livestock prices are considerably lower <br />this year than last year — steer and heifer prices are down 2.7 percent and prices for calves are lower by <br />15.1 percent. <br />