Ranch families face modern dilemma to stay or sell
Source: CasperStarTribune.Net, by Brodie Farquhar
October 06, 2007
John Jenkins realized something had to give. The family ranch outside of Buffalo wasn’t paying the bills and faced huge capital needs before it could be efficiently irrigated and operated.
Beginning in 2003, his family sat down and began considering and researching their options. Cashing out and walking away didn’t look good for several reasons, Jenkins explained. It would covert the ranch into solid rural sprawl, ending open space for wildlife and neighbors and ending a ranching tradition for the land itself.
Ranch and farm families face a wide range of pressures to sell out, in part or in whole, but with the right kind of planning tools, agricultural land can keep functioning, guest speakers noted at a Casper College lecture.
Jim Magagna, executive vice president of the Wyoming Stock Growers Association, took the optimistic view during his Thursday speech that ranch and farm families have “unparalleled opportunities” to do something other than agriculture.
Magagna said markets have been strong for Wyoming ranchers and farmers, although good prices in the market have been tempered by an ongoing drought. The agricultural community is aging, with the average rancher/farmer nearing 60 years of age and few young people entering the field.
Ag families have diversified, he said, incorporating outfitting, turning their operations into bed-and-breakfasts and cash-driven conservation easements into their operations. So important have conservation easements become, he said, that the Stock Growers have established their own land trust to hold onto easements, which are agreements that future residential or commercial development won't occur on the land.
Ag families can use the cash from conservation easements to put the operation and family on firmer financial footing. “We don’t promote conservation easements,” said Magagna. “We view them as a tool.”
Ag families can and do sell off a few parcels to housing developers, he said. “That solves the immediate financial problem, but may create a long-term problem, because there’s no control on who’s going to live there,” said Magagna.
Many elderly ag families don’t have a child who’s willing to take on the ranch or farm, so the operation is often sold to an outsider, he said, someone with deep pockets who wants the land for taxes, recreation or even as working ag land.
Finally, some ag families that need to sell out, sell to a developer who breaks the land up into 40-acre parcels, so as to avoid subdivision regulations.
“We see many examples of this,” said Magagna, referring to the B.B. Brooks development north of Casper.
Local governments often learn to their regret, that 40-acre subdivisions are no bargain. New tax revenues are more than offset by such expenses as roads, law enforcement and fire protection, Magagna noted.
Every dollar in ranch tax revenues requires about 43 cents in local government services, said Magagna, while new housing requires $1.54 in services for every dollar in taxes.
The challenge facing the Wyoming Legislature, said Magagna, is protecting private property rights while also protecting your neighbors from what you want to do.
He’s not impressed with a bill proposal that would increase the threshold between lands that need subdivision regulations and no regulations, from 35 to 100 acres. “That just expands the problem (of sprawl),” he said.
The stockgrowers' policy is to protect private property rights, he said. “That’s easy to say, and harder in application,” he said.
A better approach is to make developers bear more of the costs with impact fees, Magagna said.
He’d like to see incentives to help ag families stay on the land and to encourage developers to cluster development that preserves open space.
That's occurring now on the Jenkins' ranch outside of Buffalo.
After three years of work, the Sand Creek Ranch Preservation Company has a plan that places the 500-acre heart of the ranch under a conservation easement and creates a ranch conservation community that will allow homes to be built on slopes that provide great views, but won’t interfere with raising alfalfa and provide unimpeded views of the Big Horn Mountains.
As of September 7, the company has sold enough early shares to pay for infrastructure construction that will dramatically increase irrigation efficiency, put in roads, power, cable and a water system for the homeowners who will be share-owners in the ranch on one-acre plots.
“Our end game was to make the ranch better than it ever was before,” explained Jenkins. His family could have walked away with $8 million, but “we didn’t want to contribute to the prairie fire of sprawl” Jenkins saw overtaking the Big Horn foothills.
“I think there are a good many ranches that fit our profile,” said Jenkins. His ranch was on the edge of rural sprawl and was highly appreciated in land value, but the family didn’t have a high net income.
Jenkins figures that there are 200-400 ranches in Wyoming with similar profiles to his own, or 300,000 acres of ranches, farms and open space than can accommodate both agriculture and housing development.
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