A Compilation of Articles for Land Investor Magazine Volumes 4-6 by Fay Ranches

LAND INVESTOR

A C ompilation of A rticles for L and I nvestor M agazine V olume 4-6

Volume 4 Different Roles Found on a Ranch Big Game Hunting in Oregon Chihuahuan High Desert Ecosystem Letter from the Editor Good Fences Make Good Neighbors Investing in Ranches Legendary Guns from a Legendary Outfitter Mineral Resources & Mineral Rights in the Southeast Pricing Land Montana Landscapes The Law of Prior Appropriations Two World-Class Montana Ranches Become One Sportsman’s Corner: Transitioning from Ranch Broker to Ranch Buyer

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Volume 5 Plantations in the American South Preparing Your Farm or Ranch for Marketing and Sale Revival of Idaho’s Wine Country Sportsman’s Corner Supporting Healthy Habitat and Spring Range Assessments Ranching Lifestyle and Sustainability in Today’s Beef Industry What is a Ranch? The New Ranch Water Tax Benefits of Wyoming The Importance of Road Infrastructure White-tailed Deer Management Thoughts and Opinions

Volume 6 Forestlands: The Ultimate ESG Investment The Dream of Owning Land for First Time Buyers Pioneering Washington’s Wine Region Purchasing a Ranch in New Mexico Raising Kids and Cattle Strategies to Owning a Ranch from Afar Will 2020 Foreshadow a Boon in Rural Land Sales? Wyoming’s Split Estate Seven Simple Mistakes to Avoid When Planting a Food Plot Sportsman’s Corner: Teaching Our Daughters to Hunt

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A C ompilation of A rticles for L and I nvestor M agazine V olume 4

DIFFERENT ROLES FOUND ON A RANCH

By Dan Leahy, DL Resource Management, LLC

here are many different potential roles on a property. Your exact needs will be determined by the type of property you own and its features and uses. The successful operation of a property, whether it’s a farm or a ranch, starts with making sure you have the right people for your property’s particular requirements. The ranch hand typically has a collection of duties such as checking herds, fence building, some equipment operation, hand irrigation, mucking out stalls and landscaping. This is a task level worker who can cover many of the basics. A herdsman has specific skills that are acquired with years of learning and doing. Purebred stock operations benefit most from a dedicated herdsman. Some smaller or commercial cattle operations will not require a dedicated herdsman. This is a very specialized position, which means the person may not be qualified or available for more general management duties. Ranches require electricians, equipment maintenance and repair, plumbers, welder-fabricators, and even ‘chemists’ who are responsible for the use of herbicides (which are regulated). A busy and productive operation will require all these trade skills. If subcontractors are not readily available (or are too costly), a ranch mechanic must be employed. It is possible to find one person with basic or better skills in each area, but the true ‘jackof-all-trades’ is not common these days. Mechanics are task level employees that may not be able to work as a general ranch hand or with livestock. A good mechanic is best with his hands and tools, and general management may not be his strong suit. Let’s not confuse farming with ranching. They often go together, but they are distinctly different activities. Can a ranch hand drive a swather? Of course. But will he also know what crops to plant and when? Or when to harvest or market them? A farmer may have a very specific set of skills and knowledge that many ranch hands will not have and vice versa. Of course, it is ideal to find someone with a multitude of skills if your property is being managed for multiple uses. There are endless possible needs for these types of workers, and what you may need is dictated by the way a property is put together, what it includes, and how it is organized to operate. Consider that managing for wildlife and environmental stewardship requires additional knowledge and experience to reach goals set by the owner or by regulatory agencies with interest in your land and operation.

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A foreman excels at one thing: getting things done. He is an effective supervisor of all the types of workers discussed above. Workers need leadership and direction and a good foreman can provide this. The most effective foreman works right alongside his ranch team and will do anything you need. A smaller or less complex property simply might not warrant a true ranch manager. If you prefer to refer to your foreman as ‘ranch manager,’ that’s fine. Just don’t let title lead you to make a mistake in hiring someone who is underqualified or overqualified for a job when someone with a different skill set is better suited to it. A true ranch manager has the unique ability to comprehend the needs of the land in their care and implement the vision of the owner. A good manager assesses, plans and designs, then executes. This is possible because of the reputation and experience he or she brings. A measure of their success is not the absence of challenges on a property, but rather how the manager overcomes those challenges. Hoping that an individual will ‘rise to the challenge’ without the clear evidence that they have done it before is not a good bet in any profession. If you have a large and/or complex property, you likely need a ranch manager (especially if you don’t spend much time there). It is important to identify what roles you should have on your property, and find the right people with the right skill sets to fill those roles. Don’t hire a foreman when a manager is needed, and on the flip side, don’t hire a manager when all that is required is a decent foreman. Your property will run much more smoothly if you have the right people working there. Dan Leahy has managed lands from Texas to Alaska. He specializes in ranch assessments and manager placements. He can be reached at ranchresource@gmail.com.

To find out more, visit www.gordyandsons.com or call us at (713) 333-3474.

To learn more about farm and ranch properties for sale throughout Montana and the West, please contact a Fay Ranches broker today.

LAND INVESTOR VOLUME 5

PU B L S

NCHE

A C ompilation of A rticles for L and I nvestor M agazine V olume 5 16

P L A N TAT I O N S I N T H E

AMERICAN SOUTH BY WILLIAM COOPER BROKER ASSOCIATE | FAY RANCHES

Lowcountry plantations like Tombee Plantation—a stunning example of a Lowcountry cotton plantation that was passed through many generations and has been both well-preserved and modernized—are important pieces of the history of the American South. 20 | WWW.REPUBLICRANCHES.COM | 888-726-2481

lantations evoke an intense sense of place. In the Lowcountry, it’s about the salty perfume in the air and the ebb and flow of the tide. The marsh grass swaying in the breeze, and oysters living in the mud, making racks to break the current, creating an everchanging environment. The fine sea breeze swirling through the junglelike woods anchored by Live Oaks with massive branches stretching 60 feet. The palmettos crackling in the breeze. The wildlife that calls the sea-crusted place home. The people living off the land and sea since the beginning of time; every season bringing a different crop to harvest, species of fish to catch, or game to hunt. It is the most culturally-mixed and diverse place in the United States and a place full of rich history, both good and bad. In their heyday, the typical plantations were self-sustained communities, economic and political institution governed by the planter. Plantation architecture was designed to mitigate the hot subtropical climate and provide natural cooling. The houses, some grand and some more modest, were the centerpieces of the plantations. Plantation crops were determined by the soil and climate, with tobacco, cotton, rice, indigo (only second to rice as an export and used in the European market for dye) and sugarcane each predominating in a particular zone of the southeast. Livestock and timber also played an important role. During the 18th century, over 40,000 acres of rice were planted along the South Carolina coast. The original rice seed arrived in Charleston Port from Madagascar in 1680. Along with seeds, the rice cultivation technique came from West Africa, and slaves were brought over to grow the rice. The descendants of those slaves—the Gullah—still inhabit the Sea Islands of South Carolina, and their culture and traditions are alive and well today.

In the Lowcountry of South Carolina, tidal flooding was used in rice cultivation. Ocean tides pushed the rivers upstream, then diverted water into the field through flood gates known as rice trunks. On a flood tide, the planter would flood the field, and on an ebbing tide, the field would be drained. The year’s yield depended not only on the slave labor but also knowledge of the condition of the crop and the proper timing to flow or draw water. By the time of the American Revolution, the Lowcountry was the largest exporter of rice in the world. There is also a long history of cattle ranching on the sea islands. The cattleraising techniques used in Europe were not practical in the brush country of the islands. In Africa, open grazing with no fences was common. * Cotton Gin and Eli Whitney” 10/10/19

This method was better suited for the islands, and cattle ranching provided significant income for the plantations. Open grazing then moved west and combined with the haciendas and Spanish horseback traditions to create the western cattle industry. American Sea Island cotton—a productive strain with unusually long, silky fibers found only in the Lowcountry—became a profitable crop for 18th-century sea island plantation owners. It originated in the Andes thousands of years earlier before being brought to the Caribbean and eventually the Lowcountry in 1786, where it was well-suited to the warm climate. To this day, Sea Island cotton is considered one of the finest strains of cotton, and in the late 18th century and up to the Civil War, made Beaufort and other Lowcountry towns some of the wealthiest in the country. Many southern plantations in the mid-to-late-18th century focused their efforts on growing tobacco, but over-planting depleted the soil of nutrients and production and profits dropped. Plantation owners began to turn more and more to cotton production but faced a new challenge as it could take slaves up to 10 hours to pick the seeds from a pound of cotton. That all changed when northerner Eli Whitney, an inventor who moved to a plantation near Savannah in the late 1700s after graduating from Yale, learned from the plantation owner of the challenges involved with harvesting cotton. He subsequently invented the cotton gin and received a patent for it in 1794 and began marketing his new product soon after. The cotton gin enabled one slave to remove seeds from 50 pounds of cotton in a day, and it inexorably transformed the American economy. On southern plantations, faster production meant that cotton could be produced much more cheaply, which created a broader market for it at home and abroad. As demand and profits grew, plantation owners acquired more slaves to expand their operations, and slavery grew dramatically, as did the wealth of many plantation owners.* The plantations that survive in the American South today are beautiful, with grand and graceful houses and sprawling gardens providing idyllic living in a historical and picturesque setting. Their cultural and historical importance and agricultural production helped shape many southern cities and towns. While only some are still used for agricultural production today, many modern plantations have led the way when it comes to wildlife management and land and forest conservation, providing outstanding recreational opportunities for hunting and fishing, while preserving the history and tranquility of these cultural landmarks.

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PREPARING YOUR

FARM OR RANCH

FOR MARKETING AND SALE BY: JEFF BOSWELL PARTNER/ BROKER ASSOCIATE REPUBLIC RANCHES

Photo By: Chris Douglas Photography 16 | WWW.REPUBLICRANCHES.COM | 888-726-2481

GREG FAY FOUNDER/ BROKER FAY RANCHES

hile most people know that a lot of work will go into preparing your house for sale in the residential real estate world, it is an often neglected aspect of preparing a ranch for sale. Homeowners will paint kitchens a different color, change countertops, and even refinish floors in anticipation of getting the best offer they can. A similar strategy should be used to prepare a farm or ranch for sale. You must consider any homes or lodges that are on the property. As with an urban residence, appearances are of the utmost importance, so you need to have the ranch home in the best possible shape and condition. Ensuring the exterior and the yard are clean and spending time on landscaping are all essential elements, as most ranch tours begin at the ranch house. You don’t get do-overs with first impressions (this goes for the ranch entrance as well). Being sure the home is clean, and any obvious trouble spots are taken care of before putting it on the market is critical. Finding a mouse in the toilet (or even a dropping on a bed), a raccoon in the closet (it has happened), or an overall dusty home will not bode well for the tone of the remainder of the tour. We recommend that our clients ensure that any secondary buildings are also clean and organized. This includes everything from barns for equipment to deer blinds. The cost and effort of cleaning up these places are minimal, and it will make an impression on a client viewing the ranch. If secondary buildings appear as well-maintained, a client will assume the rest of the ranch has been well taken care of. One often hears the term curb appeal in the urban real estate environment. In the farm and ranch environment, we like to use the term “pasture appeal,” and this is an equally important concept. While most of the ranches we sell consist of native rangeland utilized by wildlife and livestock, a good many are operating farms or have hay meadows, food plots, quail strips, etc. These are areas that are mechanically altered to improve the productivity of the property, and these parcels should also be tended to so they appear well-maintained. All roads should be mowed and graded, and any trash, fallen trees, overgrown vegetation in the roadways, and other eyesores removed. Clients will spend most of their time on the roads when viewing a ranch, and maintenance will go a long way towards showing the client that the property is cared for and worth the asking price. If feeders are used, they should have corn or protein in them. If not, it will appear that the seller has not been attentive to the property, which will lower the value in a buyer’s mind. Lakes and ponds that can be filled with water should be filled up. Any feed pens should be maintained so they are in presentable shape. If possible, grazing practices should be adjusted before marketing to maintain as much quality forage as possible on the range for showing purposes. As part of this, any internal gates that can be left open for tours should be left open. A buyer would rather stop at a scenic viewing location than to open a gate. Trash dumps should be adequately maintained (surrounding areas should be policed for blown trash and varmint trash trails) and emptied or burned after removing. Hazardous items and any old appliances, vehicles, etc. should be disposed of properly. If the property has any current or historical sites related to agricultural or industrial type activity that may have items to be addressed, they should be dealt with appropriately. Any existing oil and gas drilling or production areas should be properly maintained and clean. Preparation should go beyond the “groundwork” and should also include some “background” work. An often overlooked aspect of preparing a ranch for sale is cleaning up any title issues. If you did not have a first-rate broker representing you when you purchased the property, there is a chance that exceptions to title insurance coverage that can be cleaned up are still on there. While these can often be fixed during the due diligence stage of a contract, there is a risk that extensive exceptions on a title commitment will cause a buyer to have unnecessary concerns about the property. Farms and ranches that have been in the same ownership for generations may have title issues that the current generation is not even aware of, ranging from old easements, long lost cousins still on the title, lack of insurable access,

boundary line agreements (or need for), right of first refusal agreements, and more. Having the title run and ordering a survey can go a long way towards getting these type of issues dealt with, or at least understood, so that marketing is accurate and, once under contract, the deal has a higher likelihood of closing. Knowing how much of the mineral estate a seller owns before selling the ranch is another step that we believe can be critical, especially in or near areas with mineral activity. If this aspect has not been confirmed, it may be worth having a certified landman or attorney run the mineral ownership, so you know what you have for mineral/royalty ownership, executive rights, etc. so you can market the property and negotiate with some certainty. A vital element of the mineral estate is the amount of surface control a buyer will have. If the property is held by production under a current lease and the seller receives royalties and plans to convey some of that, the recent history of those royalty payments should be understood. Without getting into an extended legal discussion requiring an attorney, a mineral developer/producer typically has certain rights regarding the reasonable use of the surface to develop the minerals, so understanding any existing surface-related protections by deed, current lease provisions, and ownership of executive rights to convey are of paramount importance to most buyers and will impact value. Properties that operate under permits for wildlife management, permitted water pumping, etc. should make sure that all permits and reporting requirements are in order and up to date. Similarly, if a property is operating under special or agricultural valuation for ad valorem tax purposes, it is crucial to make sure any outstanding issues related to that valuation are addressed. It is also helpful to make sure any potential impacts from planned infrastructure projects such as pipelines, transmission lines, highways, or even planned activities by neighbors (like solar or wind development) are understood before marketing so these can be properly managed. Working with visible neighbors to keep their properties tidy is also helpful, and if they have any blinds on fence lines, it is always a good idea to see if they will move them back further on to their own property (which they should be doing anyway). Another major issue that can blow up a sale is determining what is going to stay on the ranch after the sale. At the very least, a good list of what will not stay with the ranch should be known to your broker so that he or she can point it out. If there is fine furniture or artwork that is not going to stay, it may be wise to have it removed prior to a showing, or you may hit an unforeseen stumbling block that can stop a sale. Even decisions about smaller things like blinds and feeders need to happen up front. I often tell my agents that if they haven’t had to buy a new blind, they have not been in the business very long. Preparing a farm, ranch, or other rural property for sale is a key element in presenting the property to the market and ultimately achieving an appropriate value for the property. This preparation involves both on the ground work to improve buildings and “pasture appeal,” and background work to make sure the property is accurately presented to prospective buyers. All of these efforts are critical and can go a long way towards selling your property at the best possible price. 20

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REVIVAL OF IDAHO’S

WINE COUNTRY BY DAVE HALGERSON BROKER | FAY RANCHES

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lthough Idaho’s wine production roots have been forgotten by most, they run historically deep. The Snake River Valley has been recently recognized as an ideal area to grow wine grapes, but that is not new. The climate and elevation are conducive to creating a variety of captivating red, white, and rose wines pleasing to selective consumers. During the 1860s, the city of Lewiston was home to some of the Pacific Northwest’s first wine grapes. As in other areas in America, Prohibition curbed Idaho’s wine industry, and it took more than 100 years for Idaho’s wineries to begin their rebirth. Idaho has two central wine-growing regions with three designated Agricultural Viticulture Areas (AVA), each offering unique geographical attributes. The southwestern region includes both the Treasure Valley and the Boise urban areas. Inside this region, the Snake River Valley AVA, west of Boise, is the largest in acreage and number of wineries it contains. It is also Idaho’s first AVA, approved in 2007. The Eagle Foothills AVA is a subAVA located within the Snake River Valley and approved in 2015. Wine grapes thrive in the four-season climate in southwestern Idaho’s Treasure Valley. The main production benefits of Idaho winters are the conservation of essential carbohydrates for upcoming growing seasons, riddance of bugs, and discouraging disease in the vines. In oppositional balance, the summer days’ sunshine nurtures sugars, while the cold nights maintain the grape’s acids. The sugar and acids cannot be found in a better ratio. The Treasure Valley’s dry climate allows the grower to control water through irrigation, inhibiting mold and rot. Millions of years ago, Ancient Lake Idaho mixed volcanic ash with sandy loam and granite pebbles to deposit nutrients that benefit today’s grape crops. Boise is the epicenter of the urban area, offering wineries and tasting room experiences. The northern region of Idaho provides low elevations to ripen a wide variety of wine grapes. The Lewis-Clark Valley AVA is Idaho’s newest AVA, approved in 2016 and is located in this region, nestled inside the valleys shadowed by the Bitterroot Mountains. Its temperate climate creates a longer growing season for wine grapes, while the steep v-shaped valleys create ideal air drainage. The soil is fertile silt with nutrients that produce abundant yields. Idaho’s landscape has several characteristics identified in Gladstone’s 1992 worldwide study as providing growing conditions for wine grapes. These include slopes with excellent air drainage that are situated above fog level in a thermal zone with direct sunlight during some part of the day, and close to substantial rivers or lakes. Additionally, Idaho’s latitude is identical to productive wine grape growing areas in other parts of the world. Idaho’s ideal growing attributes combined with the recent influx in population and profitability have contributed to making wine grapes Idaho’s fastest-growing agricultural industry. The established culture promises a continued intimacy between grower and consumer. There are currently 52 wineries in Idaho, with 1,300 acres contributing to growing wine grapes and producing 372,601 gallons of wine. The revival of Idaho’s wine industry promises a prosperous future built upon a solid foundation laid many years ago.

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SPORTSMAN’S CORNER BY BRANIF SCOTT BROKER ASSOCIATE | FAY RANCHES

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land a fish or shoot a bird, and it brings me right back to my youth. Henry recently attended fly fishing camp and learned to tie flies, which has given him an even deeper appreciation of all that goes into fly fishing. All of our family trips revolve around fishing, whether in saltwater, lakes, rivers, or streams. Every trip, I take each of my kids out for some one-on-one time with me, creating special memories that are always the highlights of our vacations and remind me of the many great times spent outdoors with my dad. Through hunting and fishing, my kids have learned the importance of focus and patience: from the challenge of rowing a drift boat, reading the water for riffles and runs, learning how to select flies, or the sometimes hours of early-morning waiting that hunting requires. Watching my 10-year-old daughter and 12-year-old son study together and quiz each other for their Hunter’s Education Course test was a proud moment only eclipsed by both of them promptly passing the written and field training tests to earn their hunting certificates.

ome of my fondest childhood memories from growing up in Cedar Rapids, Iowa are centered around being outdoors, primarily camping, fishing, and hunting. My friends and I spent hours down by the creek near my house, digging for worms and catching carp and bass. My dad took me camping on the shores of local lakes and the Mississippi River, and we would rise early and fish all day and into the evening. I can still hear the crackling campfire as the smell of fried fish wafted into the cool night air. At night we crawled into our sleeping bags, exhausted and smelling of fish and campfire smoke. As the crisp autumn air replaced the warmth of summer, we changed gears, and my dad and I hunted for pheasant and waterfowl; a tradition I grew to cherish despite a challenging start. On my first pheasant hunt when I was in seventh grade, I broke my ankle when a brace of pheasants flew up unexpectedly and scared me. I grew to love pheasant hunting to the point that I could never sleep the night before a hunt, images of our dogs flushing the brightly-colored birds playing over in my head. Good and bad, I wouldn’t trade those moments with my dad for anything.

Through all of their time spent outdoors, they have learned critical lessons about the value of the natural world and conservation of it: everything from handling fish properly and respecting animals to the importance of water and habitat quality and the need for public lands. These are all lessons that can come from a book but are much more powerful when experienced in real life. I asked my kids what they love about living in Montana. Henry reflected on the incredible wildlife, fishing, hunting with our dog Millie, and skiing. Charli said she enjoys being a girl hunter and angler and spending time with me all by herself. Having access to some of the most stunning vistas in the world is something I am grateful for each day. I am thankful I can give my children the outdoor experiences and opportunities that they will carry with them for a lifetime, and hopefully pass down to their children one day, continuing the tradition for generations to come.

I realized later in life that these experiences in the outdoors not only create memories that last a lifetime but also play a formative role in building character. In college, I discovered my love of the mountains and also met Nikki, my future bride, who shared my love of being out in nature. We went on many adventures together and once we were married, decided to move to the recreational paradise that is Bozeman, Montana so we could raise a family. Henry came first, followed by our daughter, Charli. Each season in Montana has provided our family with different opportunities for adventure and has deepened our love and respect for nature. Every activity is great fun for our family and provides educational experiences for the kids. Their most cherished memories—like the many I have from my childhood—all revolve around the outdoors. I started teaching my kids to fish and hunt at a young age. There is nothing more gratifying than watching their excitement when they 800-238-8616 | WWW.FAYRANCHES.COM | 7

SUPPORTING HEALTHY HABITAT AND SPRING

RANGE ASSESSMENTS BY ROB GRAINGER SALES AGENT | REPUBLIC RANCHES, LLC

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pring is ordinarily the breath of fresh air that we yearn for once the hunting rigs are parked for the season, and we store our gear. After the last covey rises in late February, my mind switches gears to budding trees, strutting toms, quail pairing off, and bucks dropping their antlers. This is the time I begin another range assessment as “green-up” transforms the landscape into the postcards you see in most Texas truck stops. In the eco-region I monitor, we ordinarily see the first woody species budding out between February 25th and March 10th depending upon our rainfall amounts and the soil temperatures. Fast forward three weeks, and we are in a frenzy of vegetation growth. The forbs are beginning to blossom, warm-season grasses are putting on fresh, palatable blades, and the woody shrubs are adding nutritious leaves to their branches. At this point, it is easy to believe that you are all set for a banner year. But, we must look beyond the luscious landscape and compare what is in front of us versus what we know should be present. We should monitor range health often throughout the year, but I want to focus on how a spring assessment can help you make management decisions for the rest of the year. Whether you are involved in livestock production, wildlife management, or a combination of the two, effectively monitoring the health of your rangelands will allow you to make management decisions that will benefit your property year round. When assessing the health of the habitat on a property, we need to establish what it looked like at precisely the same time in prior years. This will help us identify what is happening to the landscape in response to the management practices we put in place and the climate’s impact over the past year. One of the common practices we often use is photo monitoring points. These are locations designated as sampling sites in which you take a photo from each of these locations on the same date each year. If you are recording rainfall and your stocking densities for the four-legged critters inhabiting your property, you will be able to understand whether you are properly stocked, overstocked, or if you could raise the stocking densities of the game and livestock. There are a plethora of items to look for in these photo points, but key ones are the presence of species diversity, problematic species encroachment, and the changes in browse and forage supply from year to year. Species diversity on our rangelands is critical. We want to have a diverse forage or multi species environment as opposed to a monoculture of one species, whether it is good or bad. For example, guayacan is a top tier woody shrub in parts of South Texas, but it would not support a healthy whitetail population by itself because of their dietary needs. The same goes for quail and turkeys when we speak of the grasses and woody species that make up their habitat. These birds require roosting, nesting, and loafing cover to exist. No one species of grass will provide everything that a population needs to thrive. You need a good mix of the right grasses and brush species. Whatever game species you consider important to your property, you will need to manage for diversity. During the spring, review your photo points from years past to see if more mixed brush and grass species are establishing. The encroachment of problematic species in Texas has become a constant battle. From the moment the first cedar, huisache, and mesquite made root in our landscape, the fight was on. Annually, ranches in Texas lay down millions of gallons of chemical mixtures to combat these harmful plants. The oil and gas industry is certainly not hurt by the amount of diesel put in bulldozers mechanically treating areas to remove unwanted vegetation. Of course, it is also essential to know what the unwanted species are, but the point is, these species

will encroach and dominate our rangelands if allowed. But why do we consider them problematic species? A problematic species can be any plant species that can cause harm to an environment by dominating a landscape. In the case of range health, these species are typically less nutritious and take up space where other higher quality species could reside. During the spring green-up, these plants will be coming up as seedlings or putting on new growth, giving you the opportunity to identify them. It is beneficial from an economic standpoint to take action early. I once spoke with a man who has been treating undesirable encroaching species chemically for several decades here in the brush country. He explained that a one-year-old huisache or mesquite might cost you $.10 to spray and kill. If that plant reaches three years of age, it could cost you nearly $1.00 to have the same effect. Not to mention, a young woody plant will absorb the chemical and die much more easily than a more mature plant. Earlier spring detection of non-desirable encroaching species will also give you time to make a game plan for that season. We begin spraying deciduous brush species with foliar treatments when the soil temperature reaches 75 degrees, and the leaves are dark green. This typically occurs in April in South Texas. Make it a point to identify your non-desirable species when the leaves come on so that you can put a plan together to control the undesirable population. As the browse species and grasses put on new growth, we can begin to make a judgment call on our carrying capacity. The general rule of thumb in cattle grazing regimes is “take half, leave half.” If you were grazing during the winter, you should be able to recognize what impact your livestock had on the range. You may have had good winter precipitation, giving you a leg up on the spring season. Adversely, starting with too little vegetation could have a great impact on the fawning and quail nesting cover that you will want later in the spring and summer. Fawning and nesting cover is a critical attribute the habitats must have for the proliferation and success of the fawns and the nests to hatch the chicks. It also protects from predators and thermal cover during the hot periods. Try to use the early spring as a time to make decisions on your grazing plan for the benefit of your livestock herds and for the game species that call it home as well. When we speak of browse and forage supply in rangeland systems, we are referring to the total weight of the vegetation coming from a specific sampling point, which is ordinarily measured in pounds/acre. The amount and type of vegetation that is on a specific site will help us determine the carrying capacity. Life would be quite simple if we could predict rainfall. Odds are I wouldn’t be writing this article if I could. Regardless, there are two key indicators of our browse and forage supply from year to year: rainfall and stocking densities. We cannot predict rainfall, but we most certainly can manipulate the stocking rate on a property. Rainfall should be the common denominator in our densities. If it is not raining, we are not producing vegetation. If we are not producing vegetation, then our carrying capacities are naturally lowered. The spring is not the only time to assess your stocking rate for game or livestock, but it is a good time to make a judgment call about whether you should increase or lower your numbers. With every year that passes, I assess properties for range health and give advice on what I interpret is the current state of the land. I pride myself on working with landowners that want to be the best stewards of the land that they can be, and Texans seem to raise the bar. Whether you have been assessing your range conditions for years or you are beginning now, I challenge you to use this spring as a starting point. It does not matter if you have 80 acres or 80,000, make it a point to understand what you have, and take steps to improve your rangelands.

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RANCHING LIFESTYLE AND SUSTAINIBILITY IN TODAY’S

BEEF INDUSTRY

BY KEBI SMITH BROKER ASSOCIATE | FAY RANCHES

n the last couple of decades, cattle operators started looking beyond the norm of selling calves at weaning in the fall and began searching for opportunities for value-added profit in retained ownership of calves. Retained ownership can increase flexibility in marketing and add value not only to the calf but to feed base, labor, capital, and lead to improved genetics and increased diversification.

For finishing out cattle, we partnered with a commercial feed yard, Winner Circle, which gave us access to a bigger buyer pool, efficient gains, consulting nutritionists, and market specialists. The feed yard offered risk mitigation programs such as shared ownership in the cattle and feed, a financing program for feed, and profit-sharing. Three different pricing methods are available when the feeders were ready to market: live, by carcass, or dressed weight. In most In the 1990s, our family ranch was struggling with shortages in our instances, our cattle were sold live to the packing plants, and a price cash flow. We ran a cow/calf operation, traditionally selling our calves was negotiated by feed yard management for the best possible return. in the fall and farming approximately 1,000 acres of winter wheat. Having two different groups of cattle coming out of the finishing lot With the profitability of raising wheat in eastern Montana diminished at different intervals gave us more marketing options and allowed by marginal yields, poor commodity prices, and rising freight costs, we us to adapt to changing market conditions. Carcass data is collected OTHER TRAVEL MAY TRY TO subsequently planted our wheat acreage into hay ground, increasing COMPANIES from the packers and provided to usSELL with gridYOU results such as yield the feed base for our cow herd. We decided to retain ownership of our grade (“cutability,” usually measured by ribeye fat thickness on 12th NEW FANCY DOG BEDS, A BONUS-WEEK ONpercentage A calves through the fall and winter by feeding them RODS, in a background lot rib) quality gradeOR (marbling and external fat), dressing at home. The retained ownership addressedCRUISE a feed base overage andAT a YELLOW (percent of carcass weight vs. live weight) other possible discounts. SHIP. DOG, WE FOCUS ONandONE THING need to add value to our operation. By feeding the calves ourselves, we We study the carcass data and use the information for improving our AND THING CREATING AND DELIVERING GREAT added an additional 1,000 pounds to our calves andONE eliminated several ONLY: genetics when selecting herd bulls. Ultimately, our goal is providing commission fees. the highest quality beef possible for the consumer.

FISHING ADVENTURES FOR OUR CUSTOMERS...

Our decision to background our calves at a feedlot at home was based on our access to labor (family), excess feed base, and increasing our gross revenue in the end. We found weaning our calves at home vs. in a commercial feedlot gave the calves a quicker start and reduced the amount of sickness and death loss due to decreased stress on the calves. The calves are weaned in three separate groups at different times and are carefully monitored the first two weeks following weaning to minimize any health risks. Our feed is sent off for testing and then to a nutritionist for rations for optimal daily weight gain and health. Our calves are held in our background feedlot for six months, after which the heavy calves are sorted and sent to a finishing commercial feed yard, and the lighter calves are pastured until fall, then sent off to the finishing feedlot.

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When contemplating retained ownership, it is crucial to evaluate the tax implications and cash flow—making the switch from marketing calves in the fall to retained ownership changes input costs and cash outflow. Commercial feed yards do offer financing at the time the cattle are placed in the feed yards to aid with cash flow problems. While retained ownership in cattle doesn’t fit all beef cattle operations, it can offer the cattle producer opportunities for diversification and marketing flexibility. The transition to retained ownership was a good fit for our family ranch and helped us utilize our excess feed base, add value to our calf crop, and increase cash flow. You may find that retained ownership will help you maximize the profit in your own cattle operation.

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WHAT IS A RANCH? BY KEN BENTZ BROKER ASSOCIATE | FAY RANCHES

he term “ranch” has evolved over the years in the West as a whole, but it also has different meanings regionally. A ranch in Colorado is often a much different property than one in Eastern Oregon. The definition also changes the closer one gets to an urban area. The transformation of this word, as is often the case, has happened through the years as it has been used to market different properties, which can range from subdivisions to large tracts of vacant land. The actual questions that a buyer must answer are: What do I want this property for? Do I want a large homesite? Recreation? Privacy? Agricultural production? The intended use will determine the type of ranch that is right for the buyer. Given the current market, there are a limited number of areas in the West where the traditional family ranch continues to exist. In much of the West, land valuation long ago moved past defining economic viability in terms of agricultural use alone. Some of these lands continue in production, but their value for other uses far exceeds what can be attained in an agriculture-related endeavor. Property valuation in the Montana, Idaho, and Colorado market has moved from a focus on industry to a focus on lifestyle. This value is, in many ways, subjective and explicitly related to the properties’ intrinsic attributes and not to any economic measure attained through production. When the reason for ownership revolves around recreation or purely lifestyle, the term “family ranch” has an entirely different meaning. In this use, the ranch is used for a family home, a summer home, or gathering spot for the family, and may be vacant part of the year. The traditional ranch has a family or families that live on and operate it as an economic unit. The value of the property is measured in terms of what the land can produce year in and year out. The family can still enjoy the benefits of the ranch lifestyle, but that comes as a by-product of operating the business full-time. The value of a cattle ranch is measured using the number and class of livestock that the ranch has the capacity to run. It is relatively simple to the work back from an estimated rate of return to allow the buyer to calculate that amount of debt service they could handle, and from there figure the amount that should be paid for any given operation. The value calculation for a lifestyle property is arrived at by the simple adage that it is worth what someone will pay. Comparing similar

properties’ attributes and sale prices helps provide insight into the market and enables one to calculate what a specific property should be worth in today’s market. This number needs to be reasonably close to similarly priced properties so that as time goes on, the property will appreciate somewhat, allowing the owner to receive some return on the wealth stored in the land. There would be no or minimal consideration as to what the property could return from operations. There may be some economic activity that could help offset management and caretaking or provide horse and cattle related recreational activities, but the property is essentially a beautiful home with a huge yard. While much of the West has ranch properties with values that far outdistance their production capabilities, there remain areas where old school ranching continues. The value of these properties is driven by what a cow or bale of hay is worth. The numbers are different than in years past, but the possibility of paying for a property through work and determination remains. East Oregon and Northern Nevada can, with a reliance on public grazing, offer ranches that make some economic sense. These properties can, in some cases, be purchased for $7,000 to $8,000 an animal unit. While the return remains meager, especially if one takes into account the risk from weather, regulation, and the market, many are committed enough to undertake the venture. (Some may say this is evidence that they should be committed.) These properties may range in size from a few thousand acres running 200 cows to more significant properties with 100,000 acres plus running a thousand cows or more. These ranches will consist of a deeded land base tied to a BLM or USFS grazing permit. The permit belongs to the ranch, and the grazing fees are minimal. No one else can use the permit for grazing, and the rancher knows how many animals, and how long they will be out on the permit each year. Most of these properties are very rural but connected to the rest of the world by excellent roads. Access to cell service and the internet has made all of the West much closer than it once was. With the term “ranch” so broadly defined, it is important as you start the ranch buying process that you determine what it is you are looking for in a property in terms of location, cost, size, and features. Knowing what you want will help an agent narrow down which properties to show you, and will ensure you end up with the ranch of your dreams.

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THE NEW RANCH WATER BY BRYAN PICKENS BROKER ASSOCIATE | REPUBLIC RANCHES

n Texas, unless you’re lucky enough to have a water well that artesian flows to the surface without any pumping or lifting, there’s a good chance you are using a windmill or electrical submersible pump system. If you haven’t made the switch yet, it may be time to consider solar power as an alternative source of energy for your water wells. Of course, water wells provide water to service your household or ranch home, livestock, wildlife, and irrigation needs where city or community service cannot. Because they don’t require expensive electrical lines, solar powered wells allow you to irrigate, water your livestock, or keep your ponds full in the more remote areas of your ranch. For others, they can provide what is needed to utilize your own water source to live truly off the grid. There are many benefits to using solar panels to power your water wells: • More efficient and cost less to run than typical electrical pumps • Equipment is more powerful than before • Less expensive to install without needing to install overhead powerlines to service the pump • They provide water in remote areas • Longer lasting parts, many last 20 years and are warrantied • Systems can be upgraded without replacements • Some systems can be shipped to your door for do-it-yourself installation – if you already have the well • An AC/DC inverter can be installed with a generator for cloudy days

Several factors have to be considered when selecting which solar power pump system to use, such as water requirements and pumping volume

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needs, daily water use, and storage tank size. Each water well is different, with different depths and capacities, so each situation is different. Many ranchers should work with experts and water well drillers in their area to determine these needs in order to design the ideal system and solution properly. And the USDA and NRCS have a cost-share program to help with the costs of installing a solar pumping system for livestock, so they can also be a great resource when designing the system. As far as the legality of accessing and drilling for water in Texas, landowners should consult with us, their local water board, the Texas Commission on Environmental Quality, or a water well driller. The water is either surface water belonging to the state, or it is groundwater, which belongs to the surface landowner under the rule of capture. But just because it may belong to the landowner doesn’t mean that one can drill a well without a permit. Much of the state is regulated by roughly 100 different Groundwater Conservation Districts, so landowners need to make sure they know if they are within one of these areas before they drill. There is also a perceived value-add for having solar-powered water wells on your ranch. One of the items we discuss with landowners before going to market is the condition of water sources and wells and related pumps. Seeing solar panels on a ranch is a good thing. They are relatively newer equipment and their presence often indicates that the landowner is operating with the cutting edge of new ranch water well technology. It also signals that the wells have been serviced in “recent” years versus the unknown age and condition of those older sucker rods laying around. So if you’re in need of windmill or pump repairs on your water well, here’s just another reason to consider going solar at this time.

TAX BENEFITS OF WYOMING BY NEIL BANGS BROKER ASSOCIATE | FAY RANCHES

hether you are in the land market for a working ranch, recreational ranch, second home, or personal residence, you must consider certain criteria. Everyone has heard the old saying location, location, location when it comes to purchasing real estate. Location holds many different meanings depending on the type of property you are purchasing. Sometimes, this is on a smaller scale, like a buyer of a personal residence finding a home located near a school or shopping more appealing than a home located next to a race track. A ranch buyer may find a ranch more appealing being located closer to a stockyard than not. It is also worth considering why some states are better than others when you’re looking for land. Wyoming is at the top of the pile for several reasons. Wyoming is currently ranked the second most tax-friendly state in the United States just behind Alaska. Below is a long list of the reasons why. Wyoming has no income tax. Wyoming is one of seven states that does not collect state individual income tax. Many people believe that states that don’t directly dip into their residents’ pay are better at creating jobs and keeping a core of young, educated workers. Wyoming has no estate tax or inheritance tax. Wyoming’s Estate Tax is not imposed on the estates of people who died in 2005 and after. There is a Federal Estate Tax that may apply if the estate is large enough. Wyoming does not levy an Inheritance or Gift tax, but again, one must be diligent and investigate the Federal Tax as the Federal Gift Tax may apply to gifts over $15,000. Wyoming has no tax on out-of-state retirement income. Retirement income earned from another state is safe from taxation in

Wyoming, including Social Security benefits, 401K withdrawals, and pensions. Wyoming has no excise tax. Another benefit to business and manufacturing in the state of Wyoming is the lack of an excise tax. Wyoming does have a state levy sales tax of 4% (which municipalities can add up to 2% to that) but rest assured, you are not paying duty on those goods at the time of manufacture. Wyoming has a low property tax. Wyoming enjoys one of the nation’s lowest property tax rates. Industrial property rate is 11.5% and 9.5% for commercial, residential, and all other property. For a definition and further information regarding Agriculture Land please visit: www.wyo-prop-div.wyo.gov/agricultural Wyoming has no tax on mineral ownership. Minerals are exempt from property tax, but incur an ad valorem tax and a severance tax once produced. These taxes contribute approximately $2.2 billion dollars to state and local economies of Wyoming. Wyoming motor fuel taxes are $0.24 per gallon. As you take stock of this and all of the other tax savings Wyoming offers compared to other states, you will realize there is hidden value in the state of Wyoming. If you are looking at two comparable ranches, one in Wyoming and one elsewhere, the tax benefits in Wyoming will far outweigh almost any other state. One could even justify a higher budget in Wyoming because of the annual tax savings, or you could maintain your budget and enjoy a better bottom line at the end of the year. If you are actively searching for a ranch or recreational property, I urge you to explore Wyoming.

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THE IMPORTANCE OF ROAD INFRASTRUCTURE BY ROSS STUDER SALES AGENT | REPUBLIC RANCHES

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have always been captivated by ranches and the characteristics that set a particular property apart from others. There are many important facets of ranch development and management such as improving habitat/rangeland quality, developing water, laying out residential improvements, and developing a wildlife management plan. All of these and more are important considerations for the enterprise to ultimately be productive, efficient, value-adding, and meet the owner’s objectives.

•Usability: Working ranches and recreational ranches alike benefit from high-quality road infrastructure. Working ranches gain an edge when efficient. The faster hands can get from one pasture, project, drinker, or feeder to another, the more efficient daily ranch operations will be. From a recreational standpoint, the more easily traversed the roads are and the better coverage the road system provides of a ranch’s features, the more enjoyment the owners and guests will ultimately get from the land and recreational attributes.

One particular aspect that is of utmost importance is a ranch’s road system. I like to think of a ranch’s road infrastructure as the nervous system of the ranch. Veins lead to different places throughout the body just as roads lead to different places on a ranch. The “healthier” the road system, the more efficient the “body” of the ranch becomes.

As ranch brokers, we drive a lot of ranches, and it is common for a prospective buyer to either comment directly on the road system or often, indirectly, on aspects of the road system that positively or negatively impact the experience of the tour of the ranch. For instance, making a particular road wind its way through towering trees, near scenic water features and elevated viewpoints versus a checkerboard grid of road systems makes a vast difference and can also make a ranch feel much larger.

From 30,000 feet, several positive outcomes of a “healthy” road infrastructure come to mind: •Pasture Appeal: Well-thought-out road systems can enhance a ranch’s “pasture appeal.” Roads that follow along creeks or rivers, travel to the higher elevations, cross other water features, or make grand loops rather than dead ends add to what we like to call a nice “pasture appeal.” •Value: A well planned and maintained road system adds value to the ranch, from both current enjoyment and a future sales perspective. A road system is used almost every time folks set out into the pasture, so it is important that the road is properly placed and is in the best condition possible. If future plans potentially include a sale, thoughtfully investing in the ranch’s road infrastructure is a good way to enhance its market value. A well-thought-out and maintained road system will provide a positive showing experience and directly improve marketability. We find that marketability is an extremely valuable contributor when trying to capture the top end of the value range for a ranch. Initial impressions are indeed important, whether to guests or prospective buyers; that first “vuelta” through the pasture needs to leave a positive impression.

In addition to the favorable aesthetics of a thoughtful road plan, ranch hands find it useful to have quality roads to get them from one location to another. Darren Carr, the Ranch Manager at Indianhead Ranch on the Devils River in Val Verde County, Texas, says, “Having quality roads is vitally important to our day to day ranch operations. The wear and tear on our work trucks caused by rough roads can lead to unproductive man-hours in the equipment shop fixing these work trucks. It really sets us back.” Of course, one must always be mindful of over-improving a ranch. Road infrastructure, similar to residential improvements or even brush management projects, can move from the value-adding side to the burden side of the balance sheet if overdone or simply not well-thought-out. There are many aspects aspects of ranch development and management that warrant thoughtful planning and implementation; from my point of view, ranch road infrastructure is one of the fundamental building blocks to having an efficient, enjoyable, and marketable property with value-adding pasture appeal.

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WHITE-TAILED DEER

MANAGEMENT

THOUGHTS AND OPINIONS BY MARK MATTHEWS PARTNER/BROKER ASSOCIATE | REPUBLIC RANCHES

I 33

f white-tailed deer are important to you as a landowner, read on as I share a few thoughts and opinions from my nearly forty years of deer management experience. Thirty-nine years ago, while on a hunt with my now best friend and a business partner, I became interested in white-tailed deer management. He and his family had implemented a management program on their newly purchased South Texas ranch. The program consisted of an annual deer survey, harvesting does, shooting spikes, planting Illinois bundleflower, and weighing and aging harvested deer. A relatively new concept was to keep the herd at carrying capacity utilizing doe permits and limiting the harvest of bucks, except spikes and “culls.” The rule of the day was one deer to 25 acres, and two does per buck.

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This hands-on introduction to the management side of white-tailed deer sparked an intense interest in learning more, and I enrolled in a graduate program in wildlife management at Texas A&M University in 1986. About this time some of us in the whitetail world had started to question the accepted management practices and had become interested in trying to understand how genetics, population dynamics, supplemental feeding and other factors impact things. My business partner received what was then called a scientific breeder permit from the Texas Parks and Wildlife Department, and we began raising deer and doing private research to see where it led. Talk about on the job training! It was a new frontier, and we had no idea what we were doing, with limited resources for help.

White-tailed deer management has evolved a lot. The continuum of management has impacted both extensive and intensive deer management programs alike. Techniques and information including lots of research, high fencing, supplemental feeding, census counts, trail camera usage, selective harvest and removal, genetic introductions and stockings, brush management and other tools have developed to enhance whitetail populations on a given property to better meet the objectives of the owner. Today’s white-tailed deer manager has many strategies to help the landowner achieve his or her goals. Which tools are utilized depends on one’s goals, property, habitat, budget, and ethics; however, the single most important aspect is to establish and define realistic goals. The number one reason landowners fail at white-tailed deer management is because they do not establish clear and realistic goals, resulting in management programs failing to meet objectives.

a healthy deer population, limits the density and composition of a white-tailed deer herd. Habitat and water management can be improved to increase deer densities in most extensively managed situations.

Start with the basics. It is as simple as saying: “I want to harvest “x” number of mature bucks of “y” quality annually within “z” number of years.” That’s it! Write it down before you ever start. Landowners must be certain their goals are specific and realistic for the property they own and for the hunting they desire to do.

For example, one thousand acres in an area that has a carrying capacity of one deer per 20 acres will have a target population of 50 white-tailed deer. Having a goal of two does per buck and a reproductive rate of 35% will result in a population of 13 bucks, 26 does, and nine fawns (more on what this means below). Neighbors and their hunting practices will affect your deer herd as well. In a low fenced environment, neighbors that do not hunt may cause you to harvest more deer. Neighbors that harvest more deer and/or younger bucks will limit your ability to harvest mature bucks. Get to know your neighbors. Attempt to establish a cooperative management strategy.

1.) Evaluate your property and determine if you can accomplish your goals with what you own or are looking at buying. Habitat, ecoregion, size, water, soil, and neighbors, are all limiting factors to white-tailed deer management. Do you have the money and time to accomplish your goals? It’s going to cost more and take more time and effort than you think! Be realistic and enjoy getting there.

The two management styles discussed above are on the opposite ends of the spectrum. Landowners who wish to utilize more aggressive and intensive management practices while attempting to maintain a natural hunt have many options as well. Supplemental feed, water enhancement, game fences, and genetic manipulation are among the more commonly utilized to whatever degree a landowner is comfortable with.

2.) How do you like to deer hunt? The style of hunting you want to establish is another important factor. Some want to hunt a low fence property with a recurve bow. Some don’t want to spend more than one hour in a blind and expect to harvest a 200” buck every year. Some attempt to harvest multiple trophies each year while having a natural feel to the hunt. Hunting style has a big influence on which management practices you follow and what type of property you purchase.

As I ponder this broad spectrum and evolution of deer management and deer hunting styles, I often ask myself what were some of the drivers aside from simple human nature? Years ago, a relatively small portion of whitetailed deer country produced the trophy bucks. Further (in private land areas), it was mostly limited to larger holdings of land with limited access. As a result the deer management community began to explore the possibility of managing for trophy white-tailed deer on smaller tracts.

In today’s world of instant gratification and maxed out schedules, many managers choose to use tools and techniques that provide for a quicker return on investment; however there are important considerations to take into account should one choose to go that route. For the landowner whose goals are to start hunting trophy bucks right away, buying stocker or shooter bucks might be an option.

Following up on my earlier example, in an ecoregion that has a natural carrying capacity of one deer per 20 acres and a region that is know for producing trophies, a minimum of 10,000 acres would be needed to regularly produce a trophy buck. A trophy is defined here as a buck scoring 175” B&C or more. Our observations and historic data have shown us that only an estimated 1.5% of buck fawns will be 175” B&C or greater at maturity in a “non-manipulated” white-tailed deer herd. Other assumptions would be a 50% reproductive rate, density of 1 deer per 20 acres, and a 1:2 buck/doe ratio.

When taking this route one needs to be aware of several issues: • Property sizes tend to be smaller due to the need to harvest animals in shorter time frames. • Special permits are required in most states to purchase and transport the deer. • Death loss of purchased bucks will be a factor. You will need to purchase at least 30% more animals than you intend on harvesting. • “Put and take” hunting ranches are the most controversial of hunting scenarios in both the hunting and non-hunting communities. Making the hunts feel “natural” is a challenge. • Lastly, be aware of drugs used in the delivery process. Some of the drugs used may take time to metabolize from the deer’s carcass and may be harmful to humans if consumed. Should a landowner be willing to spend the time and desires to establish a more primitive, free range and natural hunting ranch then habitat, water, eco-region, soils, neighbors, and size are the most important factors. White-tailed deer are present in many different eco-regions, but not all areas are equal in naturally occurring quality. Ecoregions that white-tailed deer inhabit can have populations that range from one deer per 40 acres (or more) to two deer to the acre. Trophy quality varies from region to region as well. Carrying capacity, the ability of a certain piece of property to sustain

With modern techniques and tools, managers can decrease the necessary acreage needed to produce trophy white-tailed deer while maintaining a more natural feeling hunt. High fencing allows landowners to ensure younger bucks are not harvested and for the stocking of superior quality deer. Supplemental feed allows for higher densities, increased reproductive rates, higher percentages of buck fawns growing into trophy bucks, and decreased death loss due to poor nutrition. Education is another key factor in modern deer management. The ability to age deer on the “hoof” with accuracy results in deer being harvested at desired ages. Game cameras and video cameras are also helpful for managers to make decisions and educate hunters. In the same ecoregion as described before, a manager utilizing modern management techniques would be able to produce a substantially greater number of trophies on the same acreage. Reproductive rates, and densities would be higher. The percentage of buck fawns that grow in to trophies at maturity could be four to five times higher. If white-tailed deer are an important factor when buying a ranch, establish your goals before you start your search. Location, size, habitat, water, and neighbors will all have an effect on where you look. Hire a broker that has expertise in deer management and can help evaluate properties you are interested in. Buying a ranch is expensive. Hoping you have purchased the right property is simply too risky.

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LAND INVESTOR

VOLUME 6

PU B L IC

NCHE

A C ompilation of A rticles for L and I nvestor M agazine V olume 6

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FORESTLANDS

THE ULTIMATE ESG INVESTMENT BY TROY DANA

FAY RANCHES BROKER

SG (environmental, social, and governance) is a general term used in capital markets and by investors to evaluate corporate behavior to determine the future financial performance/benefit of investing in new companies and innovations. ESG is the new standard by which corporations, nonprofits, and start-ups stand out in the crowd, whether competing for capital or market share. A closer look at forestlands as an ESG investment will show that forestlands check all the boxes. Tree farm certification, forest practice rules, and habitat conservation plans are a few of the voluntary and regulatory management protocols designed to improve the landscape aesthetic, forest health, and ecosystem functionality. All of these are ESG centric. Forestlands provide more than economic returns; they provide unforgettable sights, sounds, and sensory experiences that start when one steps among the trees and takes in that first deep breath of the distinctive woodland bouquet. Forestlands do far more than grow trees; they strengthen our connection with nature. An encounter with a 900-pound bull elk bugling on a brisk early autumn morning is enhanced by the pungent, pleasant aromatic of pine sap warming in the reddish-brown ponderosa pine bark ubiquitous on the eastern side of the Cascades. The cathartic sound of bone-chillingly cold water pumping from crystal clear springs into meandering streams or the experience of foraging the forest floor on an early October day for Chanterelles prized by culinary snobs and old-timers leave an imprint on the soul. Forestlands offer unique and tangible experiences no other ESG investment can provide. The experiences alone make the investment worthy of consideration, but set those aside for a moment and consider how much forestlands do for our ecosystem, our economy, and our quality of life.

CARBON SINK – Leading up to Covid-19, C02e, or Greenhouse Gas dominated headlines and was considered humanity’s 37 existential threat by politicians, scientists, and the media alike.

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The images of the polar ice caps melting, unprecedented weather extremes and climate change alarms due to increased levels of Co2e in the atmosphere all confirm climate change is a reality. One positive thing coming from Covid-19 is that it has demonstrated that reduced Co2e emissions do improve air quality and slow the greenhouse effect. Capturing carbon from burning less fossil fuel can also help improve air quality and slow climate change. Forestlands are massive carbon sinks due to their ability to absorb carbon dioxide from the atmosphere. A Douglas Fir tree planted 20 years ago is one of the most efficient carbon sequestration and oxygen emitting life forms on the planet. Sequestered carbon can represent as much 28,000 pounds in a 100-year-old Douglas fir or approximately 50% of the biomass weight. The oxygen produced by photosynthesis can range from 260 – 500 pounds per year, depending on tree size. Carbon sequestration and scrubbing technologies are abundant but not yet costeffective. By contrast, forestlands do this work and so much more. Carbon sequestration in biomass has also created a demand for carbon offsets. Now, these markets are emerging throughout the US as more and more Fortune 500 companies are proactively investing in forestlands for carbon credits. COOL WATER – There is nothing like walking out of the direct sun on a hot summer day into a small wooded area fully shaded by tall trees to a 10-15 degree drop in temperature. Even small forests can provide a cooler microclimate, shade, and habitat beneath the forest canopy. This shade offers benefits beyond a cooler place in the forest for the many animals that roam the forest and the plants that call it home. The shade and cooler air contribute significantly to keeping surface waters cooler as they meander downstream to ever bigger streams and rivers and eventually back to the ocean. Direct sunlight on the surface water creates a warming

effect impacting drainages, tributaries, and even ponds and lakes. Cool water is critical for many coveted cold water fish species such as trout, steelhead, and salmon smolts. BIOMASS PRODUCTION – Forests can be managed in various ways, from passive, hands-off management to intensive management for maximum ROI. Passive management allows for the indigenous species to flourish while competing for the sun. This can result in what is regarded as a mixed stand forest because there was no human-made attempt to purge non-commercial trees and competing vegetation. Mixed stand forests will often have a mixture of conifer and deciduous trees native to the region. There is still commercial value in these mature forests but generally not anywhere close to professionally managed commercial tree farms. For example, in Western WA, these native tree species can include big leaf maple, cottonwood, and Oregon ash. Commercially viable species that are not optimal to farm are western red cedar, western hemlock, and hybrid poplar. Douglas fir has historically and continues to be the preferred commercially desired tree, prized for the speed at which it grows and multiple structural and commercial uses. Mature fir trees can weight between 5000 and 10,000 pounds depending on age, site index, and stem count, which could amount to nearly 1 million pounds per acre of biomass. HABITAT – Perhaps the most instantly recognizable benefit of investing in timberlands is the positive impact of quality habitat for wildlife, flora, water, and the human experience. A habitat conservation plan or HCP is a voluntary agreement with the state and federal agencies to manage a tree farm with key and usually critical habitat objectives in

mind to protect threatened or endangered species such as spotted owls and Oregon spotted frogs. A trip to a well-managed tree farm with an HCP will almost certainly provide the investor experiences not readily available on many commercial tree farms. A tree farm managed for habitat serves two purposes: ROI, and optimal habitat long-term and short-term for the flora or fauna targeted. Quality habitat also improves the quality of the human experience in the forest. RECREATION – Camping, hiking, hunting, fishing, and birdwatching are examples of recreational uses in forestlands. A market has evolved for recreational leases to access these prized tree farms for this type of activity. Users pay an annual fee for a license to use the property, camp, hunt, or otherwise enjoy. An investor in this market can control access or limit access and improve the overall experience both for himself and others visiting the tree farm. FINANCIAL RETURNS - Historically, returns on timberland investment range from 8% - 12% depending on the investment vehicle. TIMOs (Timber Investment Management Organizations) and REITs (Real Estate Investment Trusts) are investment vehicles in which the investor has no participation in managing the asset. Mills and timber companies also invest in tree farms, and these companies are generally privately held. High net worth individuals and middle-class income earners alike often invest in forestlands as they have proven to deliver strong returns year after year. Add the benefits to our ecosystems and quality of life and include attractive and stable returns on investment, and it’s no wonder investors continue to acquire tree farms when they become available. Organizations like RISI provide real-time timberland intelligence and data for fully engaged investors who covet data. When considering all of the factors involved with investing in forestlands, no other ESG investment can do as much for the planet, the bank account, and the soul. 800-238-8616 | WWW.FAYRANCHES.COM | 15

THE DREAM OF OWNING LAND FOR FIRST-TIME BUYERS BY MITCHELL EADS REPUBLIC RANCHES SALES ASSOCIATE

ave you dreamed of owning rural land, a place to conserve, cultivate, and enjoy? Whether a childhood dream, a recent aspiration, or if you are a savvy investor that wants to capitalize on the enjoyment and pride dividend that comes with owning a hard asset like land, the market has found itself in a sweet spot for first-time buyers. The first step we highly encourage is to find a broker that you trust and begin the conversation. The complexities of a farm and ranch transaction can seem overwhelming and create a barrier that keeps many buyers on the sidelines. Working with a broker will ease the stress of the unknown and allow buyers to enjoy the process. Buyer diligence in a farm and ranch transaction can sometimes be a more complex endeavor than a residential home purchase. Numerous data points and property encumbrances are generally less impactful than with rural land. Often it is as simple as knowing what questions to ask. Once you have met or spoken with a broker to discuss your search’s initial parameters and begun to study various properties, the next step is getting out and putting in some windshield time. No amount of data analysis and sorting through maps and pictures can take the place of getting your feet on the land and seeing it firsthand.

Some buyers will search for years for the perfect place, looking at ranch after ranch. Other buyers will step foot on the first or second ranch they view and know it is the one. You can feel the excitement and that intangible connection to the land. Some buyers will experience guilt in falling in love with the first few places they see. The process seems too easy, and there is a feeling of potentially missing out on the next property around the corner. We encourage buyers to make informed and thoughtful decisions while also reminding themselves that the perfect property can present itself 39 at any time.

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As with residential purchases, especially in an active market, seeking pre-approval from a lender is highly encouraged. In addition to a conversation with your broker, we recommended contacting a lender as soon as your search begins. Lenders are a valuable resource that can help walk you through rates and requirements to make the process as smooth as possible. This will also help to refine your search by identifying your buying power and bringing your dream that much closer. BELOW ARE SEVERAL FACTORS TO CONSIDER AND DISCUSS WITH YOUR BROKER: REGION As always, real estate balances atop the three critical factors of Location, Location, Location. Across the country, regions differ drastically in their topography, soils, foliage, wildlife, and watersheds. When many buyers begin their search, one of the parameters is often a search radius from a particular city. This is an essential factor in ensuring that travel does not detract from the enjoyment of a property. However, as buyers refine their search, they will often focus on a particular region, rather than distance. Regions can change drastically within a matter of miles. When viewing a property in one season, it is vital to have a broker knowledgeable about a region’s year-round attributes. PRICING AND FINANCING One of the most crucial roles a broker can fulfill is ensuring that a buyer has as much information as possible to decide what they will pay for a property. Brokers will address numerous pricing factors in the recommendations and help buyers feel comfortable that they are within the market. Current interest rates allow buyers to keep more money in their wallet or in the market to outperform borrowing costs. Even cash

buyers will often ultimately borrow after speaking with a lender and realizing the benefits of capitalizing on these market factors. Some lenders offer profit sharing and other incentives to their customers, possibly adjusting your interest rates even lower.

production rather than the market value. The Ag appraisal’s general purpose is to encourage agricultural production and conservation by implementing management practices that can ultimately improve the land and wildlife.

OIL AND GAS AND THE MINERAL ESTATE Many factors can affect a property. After the shale boom, which put the United States as a global leader in oil and gas production, possibly one of the most recognizable encumbrances is created by the mineral estate. A frequently asked question from buyers looking at land is, “does it come with minerals?” Though a good question, the answer is often no. Properties are frequently bought and sold with the minerals having been reserved years ago, and typically it has no impact on the use of the property. It is essential to discuss the implications of purchasing land with some or all of the mineral estate reserved and what can be done to mitigate the impact on your land. Having a firm grasp of all of the rights affecting a property will help a buyer feel more comfortable.

The primary Ag appraisals that most first-time buyers will qualify for unless buying a commercial operation is the 1-D-1 Agricultural Appraisal or Open Spaces Agricultural Use. It is imperative to have a firm grasp of the property’s taxing status. A property that has lapsed or is not currently under an Ag appraisal will be taxed considerably higher and require five years of adherence before the land can qualify.

RESTRICTIONS Restrictions come in many forms and can be created naturally by factors such as floodways, county regulations, or a seller who has placed restrictive covenants on the land. Not all restrictions detract from a property’s value, as in restrictive covenants, which can serve to protect the land from particular uses and increase value. It is essential to understand any factors that can impact your use and development of the land, both for your purposes and future value consideration. TAXING APPRAISAL One of the most cost incentivizing factors of purchasing rural land is the tax appraisals offered to landowners of agricultural properties. Ag appraisals, often called Ag exemptions, allow landowners to own property with a significantly reduced tax rate by adhering to a list of requirements. This allows land to be appraised based on the estimated

INPUT COST AND OPERATING EXPENSE Rural properties come in all shapes and sizes and every degree of improvement, from raw land to highly improved and everything in between. Some buyers begin their search looking for a blank canvas property with the dream of molding and shaping the land to their desires. Others look for the turn-key property that is move-in ready and primed for immediate enjoyment. An unimproved property will likely have a higher input cost associated with land clearing, fencing, water development, and the possibility of building structures. Turn-key properties will generally have a higher Operating Expense related to maintaining the existing improvements. Whatever your desires, it is crucial to speak with a broker and asses the time and cost input a particular property will require. With locations across the country and with experience and knowledge in nearly every industry affecting rural land, the brokers and agents at both Fay Ranches and Republic Ranches are poised to make your dream a reality and to have some fun along the way. We have made careers out of our passions and find no greater joy than sharing that passion with buyers. We hope that this helps illuminate several vital factors to consider on the path to ownership. 40 800-238-8616 | WWW.FAYRANCHES.COM | 11

PIONEERING

WASHINGTON’S WINE REGION BY MICHELLE BURBIDGE FAY RANCHES BROKER

ashington is quickly becoming a mecca for grape growers and wineries. The same breathtaking landscape that first drew pioneers westward over 200 years ago now attracts a new kind of pioneer, those searching for a rich and diverse grape growing region.

Valley and not included in any other sub-AVAs. The appellation is in central, south-central, and southeastern Washington, with part of the appellation spilling across the border into Oregon. It contains 99% of all the wine grapes grown within Washington. Top varietals are Riesling, Merlot, Chardonnay, and Cabernet Sauvignon.

Just 20 years ago, Washington had only four AVAs (American Viticultural Areas), accounting for 24,000 acres of wine grapes and 70,000 tons of grapes per year. As of August 2020, there were 14 AVAs, equating to nearly 60,000 acres of vineyards and 260,000 tons of grapes, making Washington America’s second-largest wine region. One more AVA (Royal Slope) was established as of publication date, with four more waiting in the wings (Candy Mountain, The burn of Columbia Valley, White Bluffs, and Yakima Valley 2). Each AVAs terroir is unique and influenced by combinations of climate, topography, and soils. These varying attributes create complexities in the flavor and aromas of the wines made from them.

LEWIS CLARK VALLEY - Designated in 2016, the Lewis-Clark Valley AVA’s soil is comprised of decomposing perennial grasses and grass roots with the capacity to hold water. The majority of soils contain loess, or wind-deposited, nutrient-rich silt. The region has good planting areas that are easy to develop and possess air drainage characteristics ideal for wine grapes. It also contains steep sides within shallow, stony surficial coverage for both classic and exotic vineyard sites. Formed by the Snake and Clearwater rivers, the Lewis-Clark Valley AVA consists of canyon side and benchlands and is 306,658 acres in size. About 72% (219,838 acres) of the Lewis-Clark Valley AVA is located in Idaho, with the rest in Washington.

Washington sits along the 46-degree parallel. It shares this commonality with the Burgundy and Rhone regions of France. This angle provides for over 17 hours of sunlight during the day and cool nights during the growing season. The time between the hottest daytime temperature and the coldest nighttime temperature is called the “Diurnal Range.” Washington has one of the most drastic ranges during the growing season, sometimes fluctuating by 47 degrees Fahrenheit. The high temperatures influence sugar content, while the cooler temperatures allow for a balance in acidity and aroma.

PUGET SOUND – Designated in 1995 and located in western Washington, Puget Sound is unique for Washington. It enjoys long, mild, and dry summers, but gets enough rainfall to grow grapes without irrigation. It is Washington’s coolest and wettest growing region and rarely suffers significant freezes in winter. The Puget Sound’s best-grown varieties pair very well with the region’s famous fresh seafood. 92 vineyard acres of vinifera grapes are planted, and approximately 45 wineries live in the Puget Sound region. Top varietals are Madeleine Angevine, Siegerebbe, and Muller-Thurgau, followed by Pinot Gris and Pinot Noir. It is Washington’s coolest and wettest growing region with an average of 15 – 30 inches of precipitation per year.

ABOUT THE APPELLATIONS COLUMBIA VALLEY – Designated in 1984 and encompassing more than a third of the state, the Columbia Valley is by far Washington’s largest growing AVA at nearly 11 million acres. It contains eight sub-AVAs within its borders: Red Mountain, Yakima Valley, Walla Walla Valley, Wahluke Slope, Rattlesnake Hills, Horse Heaven Hills, Snipes Mountain, Lake Chelan, Naches Heights, and 41 Ancient Lakes. 6,070 vineyard acres are planted in the Columbia

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COLUMBIA GORGE – Designated in 2004, the Columbia Gorge AVA gave recognition to a uniquely beautiful area straddling the Columbia River along the Oregon border. The Columbia Gorge is one of Washington’s only growing regions outside of the Columbia Valley appellation. With nearly 400 acres under vine, it is one of the few AVAs where white grape variety plantings outnumber red grape

plantings. This is one of Washington’s four cross-border AVAs with 66,604 acres in Washington and 120,012 acres in Oregon. Traveling west to east within the Columbia Gorge, rainfall diminishes almost an inch per mile. Its western vineyards are a cool, marine-influenced climate (40 inches of rain per year) – perfect for Gewurztraminer, Chardonnay, Pinot Gris, and Riesling. Its eastern vineyards are a continental high desert climate (10 inches of rain per year) but boast plentiful sunshine – perfect for Cabernet Sauvignon, Syrah, and Zinfandel. Vineyard altitudes vary from near sea level to close to 2,000 feet. REASONS TO INVEST IN WASHINGTON - Today, we see the growth and success that Washington grape growers and winemakers have had since the earlier pioneers before them. What started with a few small farms and creative winemakers has evolved into a world-class and well-respected industry on the world stage. It is a $4.4 billion-plus industry in Washington state. Since 1981, there has been consistent, steadfast growth in licensed wineries, with nearly 100 new per year since 1981, resulting in over 1000 wineries in 2020. From 2008 to 2018, Wine Spectator Magazine rated 44% of the Washington wines tasted with scores over 90. The only other region in the world to beat that by 1% was France. Trailing behind by wider margins were California, Italy, and Spain. This statistic speaks to superior fruit quality and meticulous craftsmanship amongst vintners. Wine consumers appreciate quality but also price. Of these five global wine-growing regions, Washington’s average price per bottle is the lowest, at $47. In the traditional grape-growing model, wineries are next to or close to their vineyard sources. Washington, generally, completely breaks this model. Many wineries are dozens and even hundreds of miles from the vineyards they work with. Many contract their grapes rather than establishing their own vineyards. This gives the wineries several advantages. Purchasing grapes minimizes startup time for a winery

and has enabled the industry’s rapid growth. It allows wineries to set up shop wherever they like, be it near metropolitan consumer hubs or in the state’s far reaches. Not being tied to a single vineyard source in a single location means that wineries can experiment with vineyards across Washington. They can make a wine that blends Cabernet Sauvignon from the Horse Heaven Hills with Merlot from Red Mountain and Petit Verdot from the Wahluke Slope, taking the best from each location. Using a diversity of sites also helps keep quality consistent across vintages. Investing in a vineyard or winery isn’t just a business decision. It’s an adventure and a lifestyle sought out by many who have previously walked far different paths. Winemakers and grape growers live and work in small towns where old homes, beautiful barns, and converted mills reflect the American West. They are active in their communities, connected to the land, and eager to share their stories. When stopped in a tasting room, the person you see walking in the vineyard, driving a forklift, or opening bottles behind the counter is often the owner or winemaker. Washington’s wine industry allocates 25% of its budget to support a groundbreaking viticulture and enology research program and the state-of-the-art WSU Wine Science Center. Research priorities are 100% industry-driven, and results are available to every winery and vineyard. Outreach is a major priority to ensure farmers and winemakers have the most updated information to make even better wine and grow even better fruit. Washington state residents revel in the opportunity to taste and tour wine country in their backyard, where people from all over the world come to experience the beauty and complexity of the landscape, and the hospitality and craftsmanship of its wine community. Special thanks to the Washington Wine Commission for their contribution to this article. Learn more about Washington’s wine industry by visiting their website www.washingtonwine.org. 800-238-8616 | WWW.FAYRANCHES.COM | 21

PURCHASING A RANCH IN NEW MEXICO BY RIK THOMPSON REPUBLIC RANCHES BROKER ASSOCIATE

ou’ve worked hard, perhaps built a business, and been diligent about saving and investing your money for years. Maybe you are very fortunate and have benefited from an inheritance or some other type of windfall. However you got there, now you are at the point where you can start working on realizing a dream you have had since childhood: owning and operating a ranch. You probably didn’t grow up on a ranch, but maybe you spent your summers working on one. Deep down, you know that is where you are supposed to be, and now you can act on it. It is hard to explain this yearning many of us have, particularly those from the western United States. Many Americans could trace their family history to a farm or ranch if they looked hard. The population shift to big cities occurred in the last 125 years or so. Given the current state of affairs in cities, many want to go back to that simpler way of life. There are many things to consider as a first-time ranch buyer looking for a property beyond a personal recreational investment. How will a ranch fit with the rest of your investments? Will your family be primarily based there? How about the time and expense required to run a ranch? A ranch is a business. Like any other business, those considering purchasing a ranch should do their due diligence to determine what they’re getting themselves into. A good ranch broker will help you in this process, but first, some fundamental questions need addressing.

First and foremost, how much money can you afford to spend on a ranch? Will it be a cash transaction, or will you need financing? Are

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you going “all-in” living and working there, or is this just a part of your portfolio? What return on investment do you require? You must first and foremost discuss this with family and advisors and have numbers in mind. Once you know what you can afford, you need to determine how much revenue you need and how to achieve it. Typically you’ve already decided to have a cow ranch, a hunting ranch, or a combination of the two. It boils down to a numbers game with cattle, whether you are running a commercial cow/calf operation, a registered breeding operation, a yearling operation, or some combination. Hunting has a similar calculation: what kind and how many hunts do I need to sell on my ranch to turn my needed profit? Farming is also a big part of many production ranches if they are located in a suitable precipitation area or have irrigation possibilities. Natural resources such as timber or mineral rights (oil and gas usually) are a significant consideration. Wind and solar power generation are prominent in places like New Mexico. To support the desired cow or hunting operation’s size, how much land do you need, and where is the best area to look? Do you want a desert ranch, a mountain ranch, a high plains ranch, a hill country ranch, or a place with a mix of topography and range types? Other things to consider in this decision are how close to a town you want to be for goods and services, off ranch employment, medical care, and so on. Schools might be a consideration, depending on your family situation. If you live full-time or part-time on the ranch, there may be more considerations such as the distance from your other home. Maybe you need a ranch airstrip or a local airport nearby. I have seen several good ranches up for sale because one or

more of the owner’s family members were too far from city conveniences to suit them. Here in New Mexico, many ranches are 150 miles or more from what many people consider essential town services like a large grocery store, a Walmart type of store, or a doctor or dentist. What a shame that is not always thoroughly thought out and discussed before the purchase, which often means the property ends up back on the market. Do you want all deeded land, or should you look for a mix of deeded and lease land? Here in New Mexico, many ranches are a combination of deeded land and lease land. Lease land can be owned by the US Forest Service, the Bureau of Land Management, the State of New Mexico, an Indian Tribe, or a private or commercial entity. Some ranches here consist of a headquarters area with housing, barns, corrals, and so on consisting of a section of deeded land or less, and many thousands of acres of government lease land. I recently brokered a ranch transaction where the headquarters itself is located on government lease land, and a large part of the balance of the ranch is deeded acreage. The cost of a mixed deeded and lease land ranch can be much

lower than an all deeded land ranch, of course, but one must consider that there are annual lease payments. In the case of government land, the lease payments are usually very reasonable and can, in most cases, enable the ranch owner to operate the ranch economically. As with any lease, the ranch operator must abide by the land owner’s rules on using the land. In the case of government leases, the operator must regularly work with government range managers and wildlife managers. Even with lease payments and dealing with outside land and wildlife managers, the price of a mixed deeded and lease land ranch can make it possible for many people to realize their dream of ranch ownership, especially in New Mexico. Ranch ownership and operation takes many forms. Revenue sources such as livestock, hunting, farming, natural resources like oil and gas, wind and solar power generation, recreational vacation ranches, and more likely, a combination of several things are necessary to make a ranch profitable. Add to this the kind of lifestyle you desire for yourself and your family, and you can see a lot of thought needs to go into the ranch purchasing decision. 800-238-8616 | WWW.FAYRANCHES.COM | 23

RAISING

KIDS AND CATTLE BY KIMBERLY LOWRY FAY RANCHES BROKER ASSOCIATE

or my family, raising kids and cattle go hand in hand. My kids were born on a cattle ranch surrounded by livestock and were wheeled out amongst the cows during calving in baby joggers before they could walk by my side to check on the herd. Raising kids and cattle often means 2 am trips to the barn during calving season if the weather is cold, and it is all hands on deck at times to care for newborn calves that would otherwise not survive inclement weather when born in the middle of the night. This lifestyle can be humbling, rewarding, and creates a sense of resolve and an awareness that sometimes another being must be prioritized above our own needs. At times juggling kids and cattle can be a challenge, but truthfully, I would choose no other way of life for my kids. Instead of filling every waking moment with video games and TV, they have learned to wake up early and head to the barn to take care of morning chores and feeding before eating breakfast themselves. While raising cattle, hogs, and lambs, they have also been actively involved in 4H and shown all three species successfully locally and nationally. Despite their many successes, they have also had their share of failures learning valuable lessons of resilience. Things do not always work out as you hope or plan, but the more failures you have, the more you

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will enjoy your successes. It is an important lesson that applies throughout life. While showing a mountain ranch recently with limited cell reception, I got a phone call that some of my cows and calves had broken out of their pasture. My neighbor reported concern that the cows had gotten out but then quickly added that my daughter was out there on a fourwheeler with one of the cow dogs and had successfully gathered the pairs and returned them to the pasture. The clients touring the ranch with me were astounded that my 14-year-old daughter knew just what to do to protect the cattle and ensure their safety. Working with livestock requires you to think fast on your feet sometimes and make critical decisions. Raising kids with cattle and other livestock species results in maturity and a sense of responsibility often absent in their peers who may not share in the same experiences. We work to involve the kids in decision making, and they will offer their input when making breeding decisions. With goals to raise quality, competitive livestock for our kids and other 4Hers, these decisions often go hand in hand with a successful livestock project. It is rewarding for the kids to take an active role in these decisions and see the results, which can apply to many 46 facets of life in the future.

STRATEGIES TO OWNING A RANCH FROM AFAR

Absentee Ownership Should Not Be Overwhelming BY RYAN BRAMLETTE

FAY RANCHES RANCH SALES

any of our clients at Fay Ranches are absentee buyers looking to satisfy a lifelong dream of owning their version of the perfect western property. Before this dream becomes a reality, many have questions around the logistics of owning and maintaining a farm/ranch or recreational property from across the country. Properties out west are big: the average farm/ranch property in Montana is 2125 acres. That can be overwhelming to an absentee owner. To maximize the enjoyment of absentee land ownership, buyers need to know their goals before purchase, understand how their goals align with a particular ranch’s potential, and have an overall plan that can bring it all together. ALIGN YOUR GOALS WITH THE LANDS POTENTIAL Once a land buyer knows what they want, investigating a property’s potential, and identifying if the prospective land can fit the buyer’s needs is the logical next step. Water rights attorneys, wildlife biologists, general contractors, stream reclamation experts, the USDA, BLM, and Forest Service, are all resources that may be needed for boots on the ground investigation. Choosing a strong ranch broker capable of helping you connect all of these dots by leveraging their contacts and their firm’s database of proven resources and relationships will be enormously beneficial. Having the right experts involved in the process will help you find the right property and gain relevant knowledge and enjoy the steps along the way.

CREATE A PLAN As one gains a better understanding of a ranch’s potential, exciting ideas lead to more questions: • How will I manage the general upkeep and maintenance of the structures, fencing, and landscaping? • Who will be overseeing the habitat improvement and wildlife management projects I have in mind, and how will I know these are being implemented correctly if I am not around consistently?

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• What will be the most effective and efficient way to administer any grazing permits or leases? Figuring out the answers to these questions will help develop a plan. Dan Durham, co-owner at Ranch Resources in Sheridan, MT, a natural resource consulting service, agrees. “The plan should be a combination of the objectives and the potential of the ranch.” Logan Miller, co-owner with Durham, adds, “A plan should consist of different enterprises that are organized, prioritized, and implemented over time.” The costs of owning a ranch, recreational objectives, and agricultural objectives are all examples of different ranch enterprises. With each plan uniquely organized through these varying ranch enterprises, one commonality is that most plans will call for some level of resource and relationship management. From simple tasks such as organizing ranch finances to wildlife management, habitat improvement, planting of crops, and ranch staff employment and supervision, a “non-resident” owner will likely require some assistance when it comes to plan implementation. PLAN IMPLEMENTATION The good news is there are several solutions to obtaining the appropriate help required to successfully implement and execute the plan you have laid out for your ranch. The question is, where does one start their quest towards finding these resources? Once again, leveraging your ranch broker’s database is the perfect place to start. A best in class ranch broker will have the knowledge, resources, and relationships to help you identify and engage with the appropriate parties that can prove to be a valuable asset to

you as an absentee landowner. Engage a “local.” Best suited for low maintenance properties and a “lock the door and leave” set up, many of our clients engage a trusted and responsible local to routinely swing by and keep an eye on the place. If something doesn’t look right, they call the owner, and the owner handles it from there. LEVERAGE LESSEES FOR PLAN IMPLEMENTATION Whether in conjunction with a caretaker or a consultant or if the landowner manages the relationship, a lessee can be a great resource for plan implementation. While the income generated from an agricultural operation or hunting lease may or may not be material, at a minimum, it can help offset operating costs. Besides generating income, these agreements can be an excellent way for a landowner to maintain their land productivity, achieve wildlife management objectives, and keep a presence on the property that mitigates trespassing. HIRE A CONSULTANT According to Durham and Miller, a consultant’s involvement can vary from quarterbacking oneoff projects to being a full-time on the ground manager deeply involved in daily operations. Depending on a landowner’s objectives, a good consultant can be a valuable resource that offers professional guidance and delivers solutions via proven in-house and outsourced resources. HIRE A CARETAKER Many absentee landowners have no intention of operating a full-blown farm or ranch operation. However, the need to perform routine maintenance, ensure the

property is being well kept, and have a presence on the property to minimize trespassing are examples of how a full-time caretaker on the property can prove valuable. A RANCH MANAGER has a foundation of expertise, typically built from educational platforms such as the Dan Scott Ranch Management Program at Montana State University that provides valuable on the ground experience around the management of a ranch. The ranch manager is in charge of and held accountable for the successful implementation and execution of the landowner’s plan. He/She answers to the landowner, and all other ranch employees answer to the ranch manager. Once you have determined that a farm, ranch, or recreational property out west is worthy of exploring, vet, and engage the best ranch brokers that specialize exclusively in these types of high-end transactions. Find one that is a fit for you personally and has the resources and relationships to assist you in all aspects of the process. Before purchasing land, know what you want, understand how the potential of a property aligns with your goals, and build a plan that can be implemented over time. Finally, engaging the right resources to execute your plan will maximize the ROI of your land investment (however one chooses to measure their return) while minimizing absentee anxieties. 800-238-8616 | WWW.FAYRANCHES.COM | 13

WILL 2020 FORESHADOW A BOON IN

RURAL LAND SALES? BY GREG FAY FOUNDER/BROKER FAY RANCHES

irus-related lockdowns, economic devastation, prolific government spending, and social unrest have ushered in the new decade. Significant changes are happening at lightning speed, and trying to make sense of how this all ends is difficult and so far a bit counterintuitive. For families across the country, there is more uncertainty than ever. But interestingly, based on the unprecedented market for land over the summer months, it appears we are in the beginning stages of a bull market for farm and ranch sales in the U.S. Under normal circumstances, oil dropping to under $0/barrel and unemployment spiking to over 10% would not favor rural land sales. When the lockdowns began, deal flow initially slowed down, with most people hunkering down and staying at home. As our communities began to reopen, there was a tremendous surge in interest in land investment. Fay Ranches and Republic Ranches agents and our competitors noticed the trend as investors looked at land as both the tangible and stable investment it has been for decades and a great, safe place to escape with their families. Now that we have had time to study this in-depth, we believe that we are seeing two significant impetuses for increasing rural land sales for the second half of 2020. This will likely continue into the coming years as more money shifts into land investment.

The first major shift is a migration from urban centers to more rural settings as families look for safety and social distancing

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BY JEFF BOSWELL PARTNER/BROKER ASSOCIATE REPUBLIC RANCHES

while still enjoying their lives. People are realizing the tremendous value of being able to enjoy the outdoors away from others. More people are taking up hunting, fishing, camping, and other outdoor pursuits to pass the time and realize they really enjoy these hobbies. Nothing is stopping another pandemic from happening in the future, and if we learned anything this time, the best way to stay safe and healthy is to find distance from others while still doing things that make us happy and keep us sane. The second shift is in investment strategy. At the beginning of the lockdown, almost everyone who had a second home on a ranch, at a beach, or just on some acreage moved there to get away from cities. Many are realizing they prefer it. With so little left to do in urban centers, those who did not have access to a home outside of the cities started wishing they did, which is one reason we have seen such an uptick in rural land and ranch sales. Many companies have shifted to a work from home model and quickly realized that their employees could successfully work from home while still being productive. This pandemic reshaped the way we, as a society, look at work structure. Not only do we have the tools and technology to work from home and still stay connected and productive, but potentially the operating costs for companies could be much lower if they continue some version of this in the future. The trend will likely continue on some level, giving employees more flexibility to move where they want, which these

days tends to be towards suburban and rural areas. We foresee this trend and migration continuing for at least the next few years.

lifestyle. It also provides a sense of safety and security in the face of an unprecedented pandemic.

Another factor driving this demographic shift from urban to rural will be homeowners looking to avoid increasingly onerous city taxes as economic growth slows. As people move out of the city centers, it will aggravate city finances, which they will try to plug with even higher local taxes, as some large cities have already done. Cities will become less and less desirable to live in from an economic standpoint in addition to all the other factors at play.

The most significant factor that may be spurring the trend will be financial. The amount of money being printed and spent by our federal, state, and local governments will put tremendous pressure on future taxes, economic activity, and likely inflation. Rural land investment is historically a sanctuary from inflation. Rural land is generally low taxed in most states because of agricultural exemptions, keeping carrying costs to a minimum. In times of turmoil, land is a tangible asset at little to no risk of losing all its value. Also, low-interest rates with expectations of coming inflation will mean making financial sense to go into debt now and pay back the loans with inflated money.

Fear of future shutdowns will also play a role in land investment. Most people never imagined that the government would cut movement and economic activity the way it did. The continuing fear of COVID-19, or the next virus, could also spur people to look for less crowded living opportunities. Being in the country provides the ability to be outside and enjoy a healthier

Many people report that the pandemic has offered them a special opportunity to spend much more time with their families. Rural land investment is a smart decision in these trying times, both from a financial standpoint and to provide you with peace of mind. 800-238-8616 | WWW.FAYRANCHES.COM | 7

WYOMING’S SPLIT ESTATE BY NEIL BANGS

FAY RANCHES BROKER

Rocking Chair Ranch, Wyoming 18 | WWW.REPUBLICRANCHES.COM | 888-726-2481

ne of the most frequently asked questions regarding ranch sales in Wyoming is, who owns the mineral rights? And what rights do they have?

In many states, the owners of the land are not necessarily the owners of the mineral estate. Wyoming is such a state. Separation of the surface rights and subsurface rights occur through either a mineral deed or a mineral reservation. Unfortunately, many sellers do not own the mineral estate beneath the ranch they are selling or are unwilling to sell their mineral interest along with the surface. In many instances, the mineral ownership is unknown, and completing a mineral title search can be very expensive. Minerals were first filed on in the mid to late 1800s, and since then, all or a percentage of the mineral rights have been willed, sold, assigned, and traded, making it a daunting task to track down who owns what. Many of you have undoubtedly heard horror stories regarding stock or domestic wells going dry in direct relationship to energy development, but like all circumstances where two industries overlap, there is another side of the coin. That’s not to say there are not issues, but it is certainly not all bad. Miles of roads have been developed, allowing ranchers easy access to rough and rugged terrain they would likely not have if not for energy development.

landowners’ rights is a Surface Lease Agreement. This document’s language can vary from being specific enough to identify the amount of money the landowner would receive per new and existing well sites, to identifying a yearly lump sum payment covering all activity (or it could have been a one-time payment made 30 years ago with no further damage payments due). This is the document that needs serious attention. This document, along with a current Title Policy, will spell out what the energy company can and cannot do. It will more than likely tell you if they have the right to access their sites and equipment, will they be responsible for the maintenance of the roads, what is the spacing for new wells? Every 80 acres? That is why this document if it exists, is essential to see, so you can weigh the likelihood of the energy activity and the Surface Lease Agreement and decide if the ranch is for you or not. But like all industries, areas that once were booming with activity have gone quiet. In this case, the main question is, are the mineral rights leased? If they are not leased when you purchase a ranch, you become the person an energy company would have to contact to negotiate a new Surface Lease Agreement. This is where you can be specific: the last thing an energy company wants is a phone call from an irate landowner every time one of their employees enters a property.

Electricity has been installed throughout this same rugged country, offering the rancher the ability to have power in places they never imagined. Overflow water, when deemed useable, has been used for stock water and at times for irrigation. When abandoned methane gas or oil wells are earmarked to be closed in, ranchers have applied for and were allowed to re-permit wells and convert them to stock wells in their name.

There are areas of Wyoming that are far more active than others, and there are parts of the state that are not physically affected by energy production at all. Local ranchers deal with this regularly, probably with mixed emotions. If a local rancher is looking at purchasing a Wyoming ranch, the question always arises: are there any yearly surface damage payments? They almost look at it as an income source and an added bonus to a ranch sale. It is certainly up to each individual where they choose to purchase their ranch. There are positive and negative effects of every industry. The fact that Wyoming is one of the most tax-friendly states in America can be directly linked to the energy industry’s amount of tax revenue.

What protects the landowner in the case that another individual owns the subsurface rights? In most cases, the owner of the minerals is not the entity the develops or extracts them. Typically, the minerals’ owner will lease the mineral rights to an energy company that will produce whatever product is below the surface. In Wyoming, that is typically coalbed methane gas, oil, coal, uranium, and bentonite. The one document that spells out the surface

The two industries, for the most part, coexist in harmony. Years of learning from past mistakes on both industries’ behalf have led to new regulations, new technology, more detailed Surface Agreements, and better practices for all involved. As long as one does their due diligence, hires the right broker, and knows what to look for and the questions to ask, they can arm themselves with as much information as possible and make an informed decision.

800-238-8616 | WWW.FAYRANCHES.COM | 19

SEVEN SIMPLE MISTAKES TO AVOID

WHEN PLANTING A FOOD PLOT BY TALLON MARTIN REPUBLIC RANCHES BROKER ASSOCIATE

ood plots are a great way to add diversity to your property and provide food all season long for wildlife. Once you know the basics and how to avoid simple mistakes, they are excellent management tools. If you want good results, you need to slow down and understand your land and prepare it properly. Adding diverse and consistent food sources can be a great value driver. Some of the gamiest ranches I have sold have two things in common: year-round varied food and water throughout the ranch. Let’s dive into some of the more common mistakes made when planting your first food plot.

DIRT IS DIRT, RIGHT? No! That’s a trick question. Soil complexities are different across the state. Enhancing your soil’s composition will be the difference between a bumper crop and a lackluster weed farm. I will refrain from boring you with the science behind those three numbers on a fertilizer bag. That is where Texas A&M’s soil sample lab can help save you a ton of time. You can send in a small sample of your soil; once you get the results back, you can plug the results into their handy calculator to understand the adjustments you will make based on the crop you decided to plant. DON’T PICK IT JUST BECAUSE IT SAYS FALL DEER FOOD PLOT When you are first getting into food plots, it is hard not to resist the colorful, well-marketed bags of food plot mix with your favorite hunting celebrity on the front. But you have to remember, rarely do these national companies sell region-specific mixes. Something that grows well in Kansas may not grow well where you live. I have had very little luck with these types of plots. My suggestion is to call your local feed store and ask if they have any local mixes. Or ask what has been a popular wildlife crop in the area. Sometimes it is great to keep it simple in your first year. Maybe try winter rye for deer or brown top millet for dove. Both are very forgiving crops as you learn. LESS IS MORE Following the suggested seeding rate is critical. Most plants are picky about how much room they have to grow, and they do not want root competition. If you over-apply them, the crowding will stunt the growth of your crop, lowering the yield. It is very tricky not to overspread most wildlife mixes with a PTO driven seeder because the seeds are so small. I have found that having the feed store mix your fertilizer with the seeds makes it much easier to distribute the tiny seeds in a PTO-driven seeder evenly. If you find holes in your plot after plants start sprouting up, you can always go back and overseed in those thin areas in a week or so. EVERYONE NEEDS VITAMIN D Most of the wildlife crops you will be planting need and thrive from sunlight; most of them

need 6-8 hours of direct sunlight. So if you have a bow blind tucked in the woods with several shooting lanes, try to avoid the densely shaded areas. Lack of optimal sunlight will lead to leggy plants stretching to find the sun, which will hurt yields. DON’T OVERWORK IT As mentioned above, most wildlife crop seeds are pretty small. Once you spread the seeds, you want to avoid over dragging the field. A good rule of thumb is that most seeds only like to be covered one to two times their diameter. So something like a millet should be lightly dragged on a well-prepped field or ideally just rained in if you can time it right. Something like a sunflower can handle more heavyhanded covering. They can sprout even after being buried up to two inches. TIMING, TIMING, TIMING (AND A LITTLE LUCK) Dryland farming is hard, especially when we need to get wildlife food plots in the ground. Be patient; it is hard to see one 40% chance of rain day in the middle of a two-week dry spell and not jump the gun. But if you are not patient and wait for a little more consistent weather pattern, your seeds might germinate then burn up if they do not receive another rain reasonably quickly. Once the plants get larger, they can handle longer stretches without water, but they are fragile when they are young. YOU CAN’T PLANT AND FORGET Finally, you cannot plant and forget most crops. No matter how much you spray and prep a field, you will always have weed competition. Having the ability to spray your plots with a post-emergent herbicide can reduce competition and allow your plants the room to grow well. These herbicides are specially formulated to kill unwanted weeds and not hurt the desired crop. If you are not managing a vast field that can be aerially sprayed, they make boom sprayers for the back of your UTV. Several plants are aggressive growers and outcompete most weeds until they head out. Most millets are this way, and depending on your management goals, they may be a great crop to take your first dip into farming. I know all of these mistakes because I have made them myself at one time or another. I hope sharing what I have learned over the years helps bring you more success. Food plots have a pretty steep learning curve. Rarely are you going to knock it out of the park the first year; you need to be observant and learn from your mistakes. Each year you will find you get better and better at it. Once you hit a stride, you will discover they are powerful tools that bring you a lot of enjoyment. It is hard to beat the feeling when you see a successful plot attracting new game to your ranch. 800-238-8616 | WWW.FAYRANCHES.COM | 17

SPORTSMAN’S CORNER

Teaching Our Daughters

to Hunt BY JEFF BOSWELL

REPUBLIC RANCHES PARTNER/BROKER ASSOCIATE

ecently one of my three daughters came to me and told me how lucky I was that I never had a boy, so all of my girls learned to hunt and fish. I do not know if that is true, but they have all been thoroughly introduced to the great outdoors. Since they were old enough to walk, they went with me on weekend trips hunting, fishing, or just looking for arrowheads. As they grew up, they went from spectators to participants. Though they are grown now, her statement made me realize how their learning to be outdoorswomen changed their lives, and mine too. Without question, the skills they learned from outdoor activities gave them confidence that they’ve carried with them ever since. They did everything with ease from their ability to handle a shotgun on skeet shoots with the high school boys, talk duck species with friends’ dads, or skin hook a plastic worm on a Texas rig while fishing with friends. They would often find themselves the center of attention for doing things they thought everybody knew how to do. In Texas, many teenagers and young adults have the opportunity to go on trips with friends to farms and ranches. My girls always found themselves in charge of activities on these trips because they knew what they were doing. These experiences at a young age gave them poise and tenacity. Spending time in the outdoors also taught them other essential life lessons. They learned patience in a time when instant gratification is the way

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of the world. A little patience in life goes a long way. They also became accustomed to dealing with a lack of comfort and modern conveniences, which helps them deal with many situations. Importantly, their outdoor experiences also gave them a sense of perspective, including knowing where food comes from, which I believe will allow them to manage the many challenges life presents successfully. Spending all of that time in the great outdoors with my daughters gave me quality time that I would never have otherwise had. Spending all day on a fishing trip or long hours in a hunting blind provided opportunities to get to know them and hear things that I am even sure their mother was not aware of. I also had a captive audience to convey wisdom without the everyday distractions found in everyone’s homes these days. I hope my thoughts and perspectives shared on these outings will make a positive impact on their lives. Now that they are grown, going to the ranch with their boyfriends and husbands is always a great time and allows me to capture my daughters’ attention on those limited days that bring them back home. Having sacrificed a few things to have a place in the outdoors allowed us to share experiences and make memories that would never have happened otherwise. It is undoubtedly one of the best life investments I have made.