The joke about starting a ranch goes something like this: The three most common ways to get into ranching are through a womb, tomb or altar. That’s because you’re either born into the industry, inherit it or marry into it.
“All joking aside,” John Heyneman said, “it’s very rare for anyone to start a ranch, at least a traditional cattle ranch.”
Why? Cost, mostly. But also because running a ranch takes a wide range of skills, including stewardship, business acumen and grit.
Heyneman comes from a long line of ranching. His grandparents, Homer and Mildred Scott, started the Padlock Ranch in 1943, and now the cattle operation covers 400,000 acres. In the 1950s, his father started a ranch in southeast Montana, and his two brothers still manage it today. While still serving on the Padlock’s board of directors, Heyneman also runs the Plank Stewardship Initiative, which focuses on long-term sustainability of high plains ecosystems.
Buying the land needed to ranch on a cost-effective scale tends to be too much for the average American.
For example, in Sheridan County, 750 acres in the foothills of the Bighorn Mountains listed for $5.5 million with a local real estate company. Another property outside of Big Horn with 720 acres listed for $4.8 million. Smaller properties, like 35 acres located north of Sheridan, cost closer to $150,000, but those properties are meant primarily as home sites, and the neighborhood includes Home Owners Association regulations.
Even as you move farther from the Bighorns to more eastern portions of Sheridan County, land prices tend to be out of reach for many.
What frustrates most farmers and ranchers in the West, though, comes down to why the land fetches such high dollars.
“There’s no connection between the value of a piece of land and its productivity today,” Heyneman said.
Instead, a land’s value in the West comes down to geography — the closer you get to recreation amenities like live water, green grass and beautiful views, the more valuable the land. This differs from other areas of the country; in the Midwest, for example, loans and land values are still based on productivity, such as how much one acre will produce.
The West has a long history of drawing settlers from the East seeking opportunities for recreation and supporting their livelihoods.
Meriwether Lewis and William Clark were tasked with exploring lands west of the Mississippi River by President Thomas Jefferson; they returned with tales of Indians, wild game and plenty.
Buffalo Bill Cody hunted in the area and entertained crowds with stories of the untamed prairies and mountains.
Even President Theodore Roosevelt sang the praises of the region, saying “I owe more than I can ever express to the West.”
The lure of independence, open spaces and adventure brought quite a bit money to the region, too.
When the HF Bar Ranch was incorporated in 1913, its founders — Warren C. Gorrell and Frank Ogilvie Horton, whose wives were sisters — moved to the area from the Midwest after Gorrell made his fortune as an investment banker in Chicago.
Howard Eaton — who arguably with his brothers founded the dude ranch industry — was raised in a wealthy Pennsylvania family, moved to North Dakota in 1879 to start a ranch, then moved the ranch to its current location in Wolf in 1903. The ranch’s clientele long included wealthy Easterners.
Even today, wealthy Americans buy up beautiful acreage in the West.
Leasing offers a more reasonable chance of gaining access to swaths of land large enough to raise animals. Leasing from private landowners is possible, but those on public land — owned by government agencies like the Bureau of Land Management or U.S. Forest Service — are more desirable because they tend to be less expensive, Heyneman said.
“Those lands aren’t as productive, though, usually, which is why they are in the public sphere,” he added.
In addition, John P. Hewlett, a farm and ranch management specialist and extension educator for the University of Wyoming’s College of Agriculture and Natural Resources, noted that “those arrangements are often struck between individuals who have a track record in the area, difficult for someone just getting started.”
Tight margins, big risks
With the need for large capital expenses, few choose to make the leap into ranching these days because the investment could not be paid off with profits from the products sold.
Margins in agriculture usually hover around 2-3%, Heyneman noted.
Hewlett also listed land access as the primary challenge, but pointed out other obstacles as well — including access to capital in the form of credit and weathering the ups and downs of prices in a sometimes volatile market.
“Owning land is often listed as the goal by managers of start-ups,” Hewlett said. “However, getting access to the credit needed to purchase land, buildings and machinery is often beyond the reach of individuals just starting out.”
Even if grazing land is made available by another family member, he said, purchasing the animals represents a substantial credit risk when the borrower does not have experience managing a commercial livestock enterprise.
There are ways to mitigate those risks. Some ranchers seek formal education in the field, earning degrees in subjects like agricultural business, farm and ranch management and other areas.
Others learn the trade through family, working alongside parents and siblings to learn the strategies and methods behind effective management and operations.
“Even with a good strategy in hand, however, the manager must also be actively involved in day-to-day management, tracking how closely the strategy is being followed and adjusting where necessary to keep the enterprise on track,” Hewlett said. “That clearly involves keeping diligent records, evaluating resource and enterprise performance throughout the year, as well as seeking out markets with the best prospects for positive net returns.”
Rate of disappearance, resilience
While degrees and boots-on-the-ground experience go a long way in providing real-world knowledge of how to run a farm or ranch operation, time and the resilience built within it likely prove the best education.
The University of Wyoming Extension offers a series of resources to aid those in the farming and ranching community.
While birth, death and marriage — in other words, family connections — still exist as options to enter into the ranching or farming industry, for those without those avenues, entering the field will require more than know-how.
Even families who have long worked the land and raised livestock on it face challenges. As families grow, and grow apart — physically moving away from family ranches — the issues involved in management become more and more complex. Subsequent generations may want less to do with the family business and may have more disagreements on management priorities than ancestors who started the business side-by-side.
As those ranches sell or cease operations, unlike other family-owned businesses like flower shops or bakeries, fewer pop up to take their place, creating uncertainty around the future of family ranches. α