For generations the West has held a certain captivation over the hearts and minds of the public. From its depiction on the silver screen to the often gritty day-to-day operations, the ranching lifestyle seems to beckon adventurers to try their luck – and their determination – against the land. From early dude ranches to the resurgence of sustainable agriculture, ranching has found a perennial place in American culture.
But what does it truly take to build and sustain a ranching operation in the Mountain West? Unlike any other type of property, purchasing a ranch requires special planning and consideration, whether it be a commercial business or a legacy estate. Like any enterprise, and perhaps more so than most, ranching requires careful foresight, vision and the right resources to succeed.
Matching Ambition with Foresight
There’s an old joke about a young rancher who wins the lottery. Asked what he is plans to do with his newfound wealth, he replies, “Well, I guess I’ll just keep ranching until it runs out.”
While humorous, the adage reflects the realities facing most commercial livestock operations. Ranching is a labor- and capital-intensive venture, with often tight margins. Returns are subject to market forces, which can cause prices to fluctuate wildly from year to year. Compounded by equal variability among inputs, like feed and growing conditions, and mounting competition from foreign suppliers and government regulations, the appeal of ranching can quickly lose its luster without the proper groundwork at the outset.
As any profitable rancher will say, preparation is key to long-term success. That requires determining clear management roles and responsibilities, staffing and operational plans. Small ranches often are family owned and operated, but even then, it often takes additional labor to facilitate day-to-day operations.
For cattle ranches, it’s important to establish the type of operation—whether it will support yearlings, which are typically raised from calves until market ready, or cow-calf herds, in which the calves are raised to market but heifers are kept year-round. The latter generally requires more infrastructure, pasture and labor, since livestock is maintained continually.
Both methods require a certain carrying capacity, or the land and resources needed to support the herd. Those considerations are subject to environmental factors, like climate and access to water. Areas with harsh winters, for example, demand seasonal feed programs, which require special attention to ensure livestock is properly nourished.
Beyond operations, ranching requires business foresight to navigate the ups and downs of the market. Rancher regularly rank livestock prices as one of the hardest aspects of the business. It’s not unusual for rates to swing from year to year depending on a number of factors, including market saturation, feed costs and even federal and state policies. Boom years can be followed by years of depressed prices, which have been the downfall of many ranches unable to weather the trough.
Finally, ranch buyers should consider succession planning. Estate taxes are frequently identified as one of the largest barriers to a ranch’s long-term operation, and rightfully so. Many family operations have been subdivided or sold entirely simply to cover transfer costs. But less obvious challenges, like divergent visions or disinterest among future generations, have turned many ranches into untenable obligations.
‘Whiskey’s for Drinking, Water’s for Fighting’
There’s an old saying among ranchers that “whiskey’s for drinking, water’s for fighting.” It underscores the importance of access to water, which in many places can determine the productivity of the land. But that’s just one important piece of the equation.
The Mountain West boasts some of the most diverse ecology in the country. But the region’s rugged beauty can often belie the fertility of the land. Most established ranches support hay or grain crops, which in turn provide feed for livestock. But sustaining the productivity of the land takes careful management.
Recently, many ranches have returned to practices of regenerative agriculture, first developed by early pioneers, which include rotational grazing and “range composting.” These systems help maintain nutrient levels and foster new growth, together which can prevent erosion and help mitigate droughts.
Determining the quality of the land has been aided in recent years by new technologies and better productivity reports, which can identify soil conditions, yield loads and even deterioration risks. Ranch buyers are wise to fully vet the quality and potential of a property to ensure it meets their needs.
Value Is in the Buy
Unlike any other type of property, purchasing a ranch requires a keen understanding of the industry and the many factors that determine the value of a deal—both agricultural and economic. The countless considerations – location, productivity and tax liabilities, to name only a few – can be overwhelming for the unfamiliar buyer. In that regard, the right broker can make all the difference.
As a profile of Western Ranch’s Live Jackson Hole team in the Wall Street Journal notes: “Routinely spending years with clients before they buy, ranch brokers must be equal parts tour guide, park ranger, financial adviser and agriculture expert, adept at representing both lifelong cattle ranchers and urban billionaires, and discussing heli-skiing in the same breath as complex water and mineral rights.”
The dedicated team of professionals at Western Ranches represents the most ranch and farm properties in the Mountain West, with more listing volume in Wyoming, Montana and Idaho than our nearest competitors combined. Our success owes to the commitment of our agents. They know the industry, its challenges and its opportunities because they live in it, with experience and backgrounds as diverse as the region itself.
“A good ranch broker does everything necessary to learn about a client’s needs and has the understanding to match those to the exactly right property,” explains Steve Duerr, who has facilitated numerous high-profile sales. “It can be complicated, especially without the right knowledge. We are in the business of empowering both buyers and sellers to ensure their success.”
“There is no other life like ranching,” says Deidre Griffin. “It’s a passion—and one that we are fortunate to share.”
To learn more about what makes ranching in the Mountain West so extraordinary, contact our team.