Back to Goal 15From Measures and Milestones 2002
p. 48-49, published 2002
While Kentucky’s farm economy has undergone dramatic change over the course of recent years, it remains economically and culturally important to the state. Indeed, one cannot imagine Kentucky without the farms that are central to its very identity. A more diverse farm economy, however, is not only important but necessary to the state’s overall economic health. Citizen opinion on our progress on this goal improved significantly in 2002, but citizens place greater importance on 16 of the 26 goals.
Table 1: Where Citizens Think We Stand
Net income per farm in Kentucky, where small farms are still quite commonplace, fluctuated between $11,000 and about $14,500 between 1990 and 1998, but is estimated to have risen to more than $18,000 in 2000, due in large part to payouts from the tobacco settlement. While increases in farm income clearly benefit farmers, rural communities, and the state as a whole, anticipated sharp declines in total tobacco production are expected to adversely affect this classic measure of the health of our farm economy in the coming years.
Figure 1: Average Net Farm Income, Kentucky, 1990-2000
Just as diversity of industries within a state helps protect its economic health, diversity of crops is widely recognized as one of the keys to improving Kentucky’s farm economy. Crops produced by Kentucky farmers in 2000 were valued at $1.66 billion, up fractionally from the $1.65 billion recorded in 1999. Kentucky’s top five crops accounted for 99 percent of the total value of all crops grown in Kentucky. Tobacco, which remains Kentucky’s most profitable crop, declined almost 30 percent in total value from 1997 to 2000. After a slight increase in 1998, hay has fallen 90 percent in value.
Figure 2: Top Five Kentucky Crops by Value of Production
While our relatively rural state is indicative of its prosperous farm economy, Kentuckians could derive further benefits by investing in and creating businesses that refine or produce our indigenously grown crops. Instead, many of these benefits are lost when we ship valuable commodities to other states for processing where significant value is added to the raw product. Fortunately, we see that Kentucky manufacturers have begun to develop and take advantage of the benefits this sector has to offer, increasing the value of food products within our borders.
Figure 3: Value Added to Food Products by Kentucky-Based Manufacturers
By tracking changes in the total number of farms and small farms (less than 50 acres), we can monitor one of the many ways in which Kentucky’s farm economy and its rural communities are changing. From 1987 to 1997, Kentucky experienced a decline in the total number of farms, as well as the number of small farms. The declining number of farms is linked to several trends, including the sharp decline in the value of Kentucky’s leading cash crop due to larger consumer, health, and economic forces; the broad shift toward agribusiness operations; and the increasing urbanization of the population.
Figure 4: Number of Farms in Kentucky
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