Until the 20th century, farming was the main source of income in Kentucky, and manufacturing was limited largely to processing agricultural commodities and timber resources. A shift toward manufacturing began in the 1930s and increased markedly after 1945. The state’s success in attracting new industries was in part due to the abundance of coal and the availability of low-cost hydroelectricity. In the late 1990s manufacturing was Kentucky’s dominant economic activity, followed by the service, government, and financial sectors. Kentucky had a workforce of 1,911,000 in 2008. The biggest share of them, 33 percent, were employed in the diverse services sector doing such jobs as working in restaurants or computer programming. Another 20 percent worked in wholesale or retail trade; 18 percent in federal, state, or local government, including those in the military; 13 percent in manufacturing; 3 percent in farming (including agricultural services), forestry, or fishing; 5 percent in construction; 21 percent in transportation or public utilities; 15 percent in finance, insurance, or real estate; and 1 percent in mining. In 2007, 9 percent of Kentucky’s workers were unionized.
There were 85,300 farms in Kentucky in 2008, the fourth largest number among the states, after Texas, Missouri, and Iowa. Some 37 percent of farms had annual income of more than $10,000. Many of the rest were sidelines for operators who held other jobs. In 2008 farmland covered 5.7 million hectares (14 million acres). Some 52 percent of the farmland was devoted to crops, while much of the remainder was used as pasture for grazing cattle or horses.
Many farms kept a portion of their land in woodlots. Tobacco is the leading source of crop income. Kentucky ranks second among the states, after North Carolina, in the production of tobacco and usually accounts for one-quarter of the annual U.S. tobacco crop. Tobacco is grown throughout Kentucky, but the greater part of the harvest comes from the Bluegrass region and the Pennyroyal. The principal types of tobacco grown in Kentucky are burley and dark leaf.
Kentucky’s other important cash crops are corn and soybeans, which are grown mainly in the western part of the state, and hay, particularly in the central part of the state. Wheat and forest products are also significant sources of farm income.
Cattle and calves, the most valuable type of livestock in the farm economy, are raised throughout the state. Production of beef cattle is concentrated mainly in the Bluegrass and Pennyroyal areas, which have the best pasturelands in the state. The Bluegrass area is best known, however, for its Thoroughbred horses. Horse breeding, a valuable component in Kentucky’s farming sector, is concentrated in the Inner Bluegrass region in the vicinity of Lexington.
Hogs are raised in many areas of central and western Kentucky but are most numerous in the Western Coal Field and adjoining sections of the Pennyroyal. Sheep are grazed on the rich pasturelands of the Bluegrass region. "Kentucky" © Emmanuel BUCHOT, Encarta, Wikipedia
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