Whether you are an avid hunter, weekend rancher, or commercial farmer, one thing rings true to your heart, the rising cost of land. We have been discussing this in my office for a while now. It is getting tougher and tougher for the small time rancher, farmer or even hunter to afford the rising cost of land.
Take for instance your average price per acre right now in the brush country of south Texas being $2,000 per arce or more. Then take just a small ranch or farm lets say 200 acres, and try and make a living or even some spare time money on this land. You can't if you have to finance, and most people starting out have to finance.
Where does this lead us? It leads us to more and more buyers paying cash to run their ranch or farm. And who are these buyers with the cash? Not your local young couple wanting to follow the family business of farming or ranching and getting started on their own. It is the corporate business man looking for a place to escape or the retired baby boomer with their nest egg in cash, looking to relax on their little piece of heaven.
More and more big ranches are being divided up into smaller ranchettes, much like a subdivision of ranches. This is the business of tomorrow for the farming and ranching community. Splitting up the family ranch to reap the benefits of the escalating land prices. What happens when these ranches and farms are sold like this, they usually end up being turned into hunting property. This I feel is not good for the future generations. This can only mean less land for beef and crop production. Which in turn means a higher price for food at your local market.
This is not something that is going to occur overnight or even in the next 10 years but, I do feel at this rate it will have an impact on my children's future. It will mean that recreational hunting will have become a higher priority than raising beef or farming crops for Americas dinner tables. Wow.
In closing I must say that I would encourage those families who have Texas' most valued commodity to hold on to it and continue the time honored traditions of raising cattle and farming crops. Or if you are a corporate man who recently purchased land, think about leasing back the grazing or farming rights to the local rancher or farmer and keep the land in business.
Ryan Smith
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Hello Ryan, Yes, I have seen this happen for the past 10 years in our market place in SW WI. The larger tracts being purchased by flippers to subdivide into smaller recreational tracts of land. Larger tracts could be purchased for less and sold at higher prices without any investment other than a survey, which drove up our local acreage prices. It is now impossible to find larger tracts for farming or grazing cattle and this all of 2007 smaller tracts became harder to resell.