A New Generation of Ranch Owner

Posted by on Nov 11, 2015 in Real Estate, Real Estate Trading | Comments Off on A New Generation of Ranch Owner

texas ranch with swimming pool

Ranching has a long and storied history. Signed into law by President Abraham Lincoln in 1862, Western migration was encouraged massively by providing 160 acres of public property to settlers. In exchange, homesteaders were required to finish five years of constant residence, or pay $1.25 per acre after 6 months, so as to receive deeded ownership of the property. The Homestead Act led to the distribution before being abolished in 1986.

As challenging as it was, farming and ranching, was a more stable and sustainable business than the “boom-to-failure” cycles experienced in mining, trapping and logging. Several of the Western states relied greatly on the Homestead Act to bring settlers to their territory, supply a tax base to support statehood, and create an economical base for some other businesses and sectors. As a consequence, strong communities having a dedication to private responsibility, education, and societal values formed a sizable portion of the foundation of American prosperity in the 20th century, and were spawned through the territories.

Fast forward 100 years and you will see a substantially different situation. America’s industrialization resulted in a following degradation of the rural market as well as mass urbanization. The working ranches that had been handed down from generation to generation were now locating their children abandoning the ranch for the societal and economical assurances of the bigger cities. The average rancher is currently in his sixties, and possesses a ranch that has been in his family for more than 50 years. Industry analysts estimate that over half the ranches will change hands in the next ten years.

This turnover is happening at the same time the Western states are becoming the fastest growing region in the United States. The ranching homesteads are fast becoming the most desirable places for brand new home subdivisions and mountain retreats, as the West continues to grow. The conversion of property from agriculture to commercial residential and industrial use is taking place at the growth rate of the USA as a whole. In the West, the level of acreage carved up and consumed by development rose from 20 million acres in 1970 to 42 million acres. Across Colorado, an average of 90,000 acres of farm and ranch land are converted to other uses every year. In 1992, the north and central mountain ranches in Colorado counted 233,719 head of cattle. In 2004, that amount was roughly 150,000.

The growing interest in these pristine valleys ranching a prosperous company and is driving property prices out of reach to make farming. The Colorado Department of Agriculture reports that fifty-seven percent of those that own the 31,361 ranches and farms in Colorado work off the farm to make ends meet, with 39 percent working off the farm.
So, who’s the following generation? A recent study by Oregon State University the University of Colorado and the University of Otago in New Zealand analyzed ranch sales in 10 Montana and Wyoming counties. Of those that bought tracts 400 acres or larger were ranchers that are traditional. Nearly 40% were “amenity” buyers — millionaire out of town people who actually don’t rely on the ranch to earn a living, the report said. The remainder were others, part time ranchers, developers among real estate investors.

Affluent absentee owners are converting more of the ranches and farms in the West into personal hunting and fishing resort areas. Amenity ranchers usually are not a brand new phenomenon, but their growing hunger for all these escapes is. Even as home costs slump in cities and suburbs, the market flourishes for getaways with hundreds or thousands of acres of prairie, forest or mountain. In some cases, new owners leave ranch operations intact. In many more, they restore wetlands, dig trout ponds, assemble mansion-size houses and return cropland to grass for horses. Cows are removed by some so elk and deer have to graze.

Now’s ranchers wrestle together with the reality that hay and their cows are worth less in relation to the water that runs through the land and the land itself. Maintaining livestock herds in ferocious winters and fending off multi million-dollar offers for land become more challenging every year. What some ranchers did to help maintain open spaces would be to set aside land in conservation easements. Others have chosen to increase the recreational potential of their ranches before selling, thus creating more value and higher prices to the next generation of buyers. While there’s no uniform consensus on what’s the best move to make, one thing is for certain; once the rancher leaves, along with the property is carved up with roads and homes across the meadows, river valleys and tree lines, the homesteader’s spirit of the American West will undoubtedly be lost forever.

For more information about ranches, contact Koehler Real Estate. They also have a huge variety of Texas Ranches for sale.