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Volume Volume III, III, Number Number 33

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Walton Ranch — Jackson, Wyoming

Sited along the legendary Snake River, the 1,848-acre working ranch is surrounded by the grandeur of Yellowstone

IN corporate leaders. A rare opportunity to own wideopen spaces in one of the most sought-after locations in THIS the world.

ISSUE $100,000,000. Ron Morris at 970-535-0881 or Billy Long at 970-927-3850. and Grand Teton National Parks yet is minutes to world-class ski resorts and Jackson - home to some of America’s top

Featured Articles Pasture Land Values: A “GREEN ACRES” EFFECT? Dawn Doves A First Look at a Country HOme

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PASTURE LAND VALUES: A "GREEN ACRES" EFFECT? Damona Doye and B. Wade Brorsen JEL Classification: Q13 Keywords: Pasture, Land Values, Rental Rates, Rent-to-Value

PASTURE LAND VALUES: A “GREEN ACRES” EFFECT?

While cropland prices have received considerable attention in the popular press, pasture land prices have also increased significantly in recent years. The predominant forages on pasture land differ across the United States but regardless of the forage type, pasture land is primarily used for beef production. The factors contributing to agricultural returns to pasture are very different than for cropland and not just because cowboys are different than farmers. As in the old TV show “Green Acres”, many urban dwellers have an affinity for country living. Pasture is also valued for recreational uses such as hunting.

The 2007 National Resources Inventory (NRI) reports 409 million acres of rangeland and 119 million acres of

byimproved Damona Doye for and B. Wade 48 Brorsen pastureland the contiguous states, which is 21% and 6%, respectively, of the 1.9 billion acres of land and water. In comparison, cropland accounts for 18% of the total with 2% in the Conservation Reserve Program.

Rangeland is covered primarily by native grasses and plants while improved pastureland has introduced plants. The distribution of these two types of pasture is different from east to west in the United States. With the exception of Oklahoma and Florida, the land in pasture is more than 80% rangeland in states in the western half of the United States and 80% or more improved pastureland in the eastern half. Oklahoma’s pasture is 63% rangeland and Florida’s pasture is 58% improved pasture.

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hile cropland prices have received considerable attention in the popular press, pasture land prices have also increased significantly in recent years. The predominant forages on pasture land differ across the United States but regardless of the forage type, pasture land is primarily used for beef production. The factors contributing to agricultural returns to pasture are very different than for cropland and not just because cowboys are different than farmers. As in the old TV show “Green Acres”, many urban dwellers have an affinity for country living.

Pasture is also valued for recreational uses such as hunting.

The 2007 National Resources Inventory (NRI) reports 409 million acres of rangeland and 119 million acres of improved pastureland for the contiguous 48 states, which is 21% and 6%, respectively, of the 1.9 billion acres of land and water. In comparison, cropland accounts for 18% of the total with 2% in the Conservation Reserve Program. Rangeland is covered primarily by native grasses and plants while improved pastureland has introduced plants. The distribution of these two types of pasture is different from east to west in the United States. With the exception of Oklahoma and Florida, the land in pasture is more than 80% rangeland in states in the western half of the United States and 80% or more improved pastureland in the eastern half. Oklahoma’s pasture is 63% rangeland and Florida’s pasture is 58% improved pasture.

Like cropland, pasture land values which includes both improved pasture and rangeland have risen dramatically in recent years. While the average value has leveled off, U.S. pasture values have approximately doubled in the last ten years. Though USDA Agricultural Resource Management Survey data showed farm operator household farm income for beef cattle operations declined from 2005 through 2009, land values continued to go up. Over the last ten years, pasture rental

rates have increased much less and when beef profitability slowed, rental rates adjusted more quickly.

Pasture rent-to-value ratios have been mostly decreasing since 1998 with a larger decrease from 2005 to 2007, now stabilized at about 1%. U.S. average pasture rent-to-value ratios, historically lower than those of cropland, averaged 1.28 for 2000 to 2010 compared to 3.87 for cropland. Part of the explanation for pasture land owners’ historical acceptance of relatively low returns is that the livestock enterprises on pasture, particularly beef and horses, often include a lifestyle component for which people are willing to earn less. Pasture suffers less erosion and so it is losing little of its long term value while some cropland is losing value due to erosion and that may partly explain the higher rent-to-value ratios for cropland. But, clearly if the agricultural rental value were the only return from owning pasture, it would be a rather poor investment.

The variability across states in average pasture values. A comparison with a population density map shows similarities in that East Coast states are densely populated and have high pasture land values, with values above the national average for both continuing west to the Missouri river. To the west, California has

both high population density and high pasture land values.

Since 2005, pasture land values and rents in the central United States have grown faster than the national average. Factors contributing to the increase include factors that have impacted cropland values, but also others.

With the exception of Texas, pasture rent-tovalue ratios in the plains states have been above the national average.

In contrast to corn and soybean states, Oklahoma sales transaction data show pasture land average values exceed those of cropland (agecon.okstate.edu/oklandvalues).

NRI data show that since 1987 Oklahoma cropland acreage has been decreasing while pasture land has been increasing, suggesting a conversion in use over time. While cropland has historically been worth more than pasture, pasture land began commanding a premium in eastern Oklahoma in the early 1990s.

In western Oklahoma where agricultural land is predominantly cropland, cropland still commands a premium, but the gap is narrowing over time.

USDA survey data show that 2010 average pasture land values exceed average nonirrigated cropland values in many

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southeastern states—Arkansas, Louisiana, Mississippi, Georgia, North and South Carolina, Tennessee—and in New Jersey. In all of these states, the percentage of farms with sales less than $50,000 is above the national average.

Other factors contributing to the phenomena are likely varied. In each of the southeastern states, 2007 Census data indicates production of more than 36,000,000 broilers and having land available for application of poultry litter is important. Census data also indicates the number of horse farms exceeds the national average in Arkansas, Georgia, North Carolina, and Tennessee as well as Oklahoma.

Factors Driving Changes in Pasture Values Economic theory suggests that the value of land is derived from the net present value of future returns, including agricultural uses, recreational uses, exurban low density residential uses, and the option to convert to urban uses. Agricultural characteristics such as soil productivity, land improvements, tract size, and rainfall are common factors used to explain differences in both pasture and cropland values across time and space. Government payments are relatively unimportant factors in explaining pasture values as farm programs are largely associated with crop production. For pasture land, agricultural returns are typically derived from livestock production, primarily cattle.

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land whereas if it were converted to a housing subdivision it then is classified as urban.

Agricultural Influences The beef enterprises that dominate pasture acreage in the Plains States include both cow/ calf production and grazing of weaned calves prior to placement in feedlots. Returns to the cow/calf enterprise have historically been cyclical as cow numbers and calf prices vary over time. Recurring droughts also impact cow numbers and pasture returns. In recent years, the cow herd has shrunk to historical lows.

Higher costs of cattle feed ingredients, including corn and soybean meal, have increased the incentive to grow cattle for a relatively longer period on grass. High fertilizer prices lower returns on both cropland and improved pasture. In the Plains States, most pasture is rangeland which does not require fertilizer so returns to native pasture are less impacted by highly variable fertilizer prices. Thus, the factors leading to high prices for crops and cropland also indirectly affect the demand for pasture and the returns to pasture land and pasture values.

• Pasture land also lends itself more readily to beginning, small, and part-time farms, which are common in the Southern Plains. While a quarter section of land is uneconomical for crop farming because of economies of size, a similar amount of pasture land can support a few cows and/or goats. Census of Agriculture data show that more than half of the farms with beef cattle have fewer than 20 cows. The number of farms with fewer than 10 head of cattle increased from 2002 to 2007. While small farms account for only 7% of the cow herd, small and part-time farmers have relatively more off-farm income and are willing and able to pay higher prices for pasture land than established producers, particularly for small parcels. Smaller parcels, especially those near urban areas, command higher per acre prices.

Recreational Value Factors such as hunting lease rates, deer density, recreational income from agricultural uses, and acres of elk habitat have been used to explain differences in agricultural land values.

U.S. Census of Agriculture data on recreational income showed an average growth of 180% from 2002 to 2007. In Oklahoma, deer hunting is the leading recreational use of agricultural land. Pasture offers year-round forage for deer and also often includes the woody cover required by deer. Oklahoma State University (OSU) rental rate survey data indicate that agricultural producers can earn approximately $4 per acre through deer hunting leases. The 2006 National Survey of Fishing, Hunting and Wildlife-Associated Recreation shows that U.S. hunting participation rates range from 2% in the Pacific region to 12% in the central United States. Almost all (96%) big game hunters, including deer hunters, hunt within

Pasture land has attributes that differentiate it from cropland for both recreational income and residential uses. Recreational income is primarily derived from leasing for hunting.

Pasture land more often includes trees and shrubs which add value for wildlife habitat (especially deer) and recreational purposes.

Trees together with the open space that pasture provides may also increase land’s attractiveness for rural housing. A tract of land with a single house is still classified as agricultural &217,18(6 3

Dawn Doves Written by Joe Doggett

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he South Zone of dove season peaks during the golden days of early fall _ reason enough for the hunter to spend an afternoon or two in the field. Following recent troubled times, the hushed sunset over a ripe furrows and green brush is a reaffirmation of all that is right outdoors.

Abundant doves represent rich natural bounty. Opportunities abound for the 12-bird South Zone daily limit, and both mourners and whitewings are a challenge over the shotgun and a treat on the table. The dove by either feather is one of the outstanding game birds available to the Texas hunter.

It also is one of the easiest to lose.

The small size and drab coloration often combine with fast action and substantial ground cover to swallow falls even within close range. The dove folds cleanly amid a puff a feathers and slants to the ground _ and vanishes.

This common occurrence can be a cause of great frustration; not only is the recovery in question, but additional opportunities often are forfeited as the exasperated hunter pokes and prods and sweats and mutters.

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“Over you! Over you!” is the recurring chant that any hunter with an MIA dove can relate. At best, valuable minutes under a hot flight are sacrificed; at worst, a worthy resource is lost _ and no conscientious sportsman is comfortable with the “wanton waste” of failing to recover downed game.

to pick up the empty hull or gloat to your companions after the dove is plumped into your belt bag. Follow this drill promptly and very few birds within accurate marking range will be lost. It’s that simple _ and that hard.

A trained dog is a strong ally in recovering game. This is a no-brainer.

But a good dog is not always available. Even a semi-good nose may not muster for a casual afternoon trip. Also worth note, a dog cannot be everywhere at once _ especially during the heat of an early-season South Zone hunt.

And don’t be duped by seemingly open ground. For example, a plowed field can swallow a 30-yard dove within plain sight of a distracted shooter. This especially is true if the dove falls breast-down with wings folded. It becomes just another dirt clump or corn husk amid the furrows.

The wagging tail and chuffing snout might be on the far end of the levee or regrouping with a bowl of water when your smooth swing connects.

Dog or no dog, the serious dove hunter learns to be self-sufficient in the business of retrieving birds. This requires discipline and concentration but once the focus is achieved few birds will be wasted.

The first step in minimizing lost falls is to select a shooting station that puts close birds over open ground. This may not always be possible, but at least you can reduce the angles of thick cover. If no reasonably open area is available then relocate to a more favorable position for recoveries _ even if it means forfeiting shots under a defined but brushclogged flight line.

Standing under a hot flight and knocking one dove down after another serves little purpose if most of the falls slant across a water-filled levee or into an impenetrable wall of brush. These are game birds, not clay targets; shooting averages mean nothing if unacceptable numbers of doves are lost.

What is acceptable loss? The idealist, of course, would say zero, but a perfect score on recoveries can be hard to meet in the real world. Based on more than 40 years of dove hunting, I believe a score of one or two losses per each 12-bird limit is acceptable for the hunter working alone.

Anything more than that on clean falls within 40 or 50 yards means too much ground cover or too little concentration _ or both.

The oft-preached key is to lock eyes on the hit, follow the bird down, and walk directly to the mark. We all know that _ but tunnel vision can be difficult to master. You turn to acknowledge a buddy, or you look up to see another crossing dove, or you bend to reload or recover the spent shell. Regardless of reason, the moment of distraction can unravel the precision necessary to pace straight to the mark.

Return the shotgun to safety and take a straight line to the fall, deviating only if you get tangled up in the coils of a rattlesnake. You can return

Only if the bird falls with a bold fluff of feathers onto a bare putting green are you excused from the single-minded task of locking eyes and walking straight.

But perhaps your prompt mark was not as “tack” as it should have been.

Honest mistakes occur. If you pace to the presumed spot and no dove is there, the first assumption should be that the line is reasonably accurate but the estimated mark is short or long of the actual fall.

Drop an empty shell at the spot, and another perhaps five yards along your straight path of approach. The two shell markers at least establish your original line. Look close then far along that line; if the dove remains missing, then start crisscrossing or circling the general area. Unless you were shamefully off on the original estimate, the dove should surface.

Long shadows can confuse tangled ground cover and you might gain a different perspective by removing your tinted shooting glasses while peering down. It’s worth a try.

If thick brush or tall grass is an issue, look for loose feathers knocked free as the dove tumbled to the ground. When a whipping wind is blowing, remember that the fluff most likely will be strewn several yards downwind of the actual fall _ Chapter Six in your Woody Woodchuck Outdoor Guidebook.

If tall bushes or trees rim the area and a positive ground mark fails to face the dove, look up. The dead bird might be hanging in a fork or trapped amid foliage, snagged as it plummeted. This is a fairly common occurrence, and one in which a ground-snuffing Lab is useless.

The disciplined hunter who follows these steps should recover almost all clean falls. If the mark is reasonably accurate, give the search at least 10 minutes _ a sincere and honest effort _ before resuming the hunt.

But here’s a final suggestion: Following the session, when the pressure is off and the lighting is different, give it one last sweep.

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n the current economy, ranch prices have dropped and mortgage interest rates have been lingering in record-low territory since midway through the second quarter. These conditions have presented opportunities for many who have been hesitant to purchase a vacation ranch or investment property in the past, when costs were much higher. For those who are able to pay the additional mortgage, taxes, insurance, repairs and maintenance on an additional property over the long term, there are many benefits to be gained, financial and otherwise.

residence for two of the last five consecutive years. This exclusion applies to one sale every two years.

Also, while ranch prices have dropped, rental costs have remained relatively stable in many areas. While those who purchased property in 2005 or 2006 may have trouble using rental income to cover the ongoing expenses of owning a second ranch, recent buyers may find the extra money from renting their vacation ranch when they’re not using it can pay for a larger proportion of their costs. However, this takes planning, patience and effort to make it work.

In addition to the profits obtained from selling the ranch in the future, vacation ranchs are a lure for family and friends. Hosting family gatherings at your beachfront property or a ski trip with friends at your mountain retreat will create memories for you and your loved ones that will never depreciate in value.

In fact, before making a purchase decision on a vacation ranch or investment property, there are many considerations you should be aware of. It’s imperative you fully understand the ranchownership costs that come with owning a second ranch.

A large number of buyers also purchase a vacation ranch with the intent to use it as their personal residence in the future. The appeal of retiring to a beloved vacation spot is obvious.

However, it can also save on taxes when the house is sold. To qualify for the exclusion of up to $500,000 of gain on the sale of a principal residence, the ranch must be used as a primary

How Much Ranch Can You Afford?

If you don’t have enough to pay off your second ranch with cash, you’ll need a mortgage. Your Loan Officer can help you determine the type of financing for which you qualify. You can usually prequalify by visiting your Loan Officer’s website, giving you a good idea of what you can afford.

It’s not necessarily the best idea to go with the most expensive property you can manage, and it’s important to factor in additional costs, such as maintenance, utilities, taxes, furniture and other expenses. Your ranchowner’s insurance may cost more than you’re used to, depending on the area in which the property is located.

You should also make sure you have cash reserves set aside for extra expenses, many of them unexpected, especially if you plan on renting out your ranch. When you’re a landlord, you don’t have the luxury of making repairs “whenever you get around to it.”

Be prepared to cover your mortgage payments for periods in which your property is not rented.

Many vacation spots have off seasons, and renting out a vacation ranch is a lot of work.

Even if you’re able to cover the ranch loan costs with your rent income, you should be prepared to pay the full mortgage if the property is vacant.

Before You Buy Be aware that requirements for mortgages on a second ranch are higher than those for your first mortgage. Depending on the loan programs for which you qualify, banks may require anywhere between 10 and 50 percent of the total ranch cost for a down payment.

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ranch, and income are reported on Schedule E. Losses are subject to the passive loss rules and may be limited.

It is best to consult with a tax professional to learn exactly what deductions can be claimed before you purchase your second ranch.

Interest rates also tend to be higher on a second mortgage.

Your debt-to-income ratio (DTI) will also be taken into account. Your DTI is determined by adding all debts, including your projected future monthly payment for your second ranch, and comparing it to your monthly pre-tax income. As a general rule, lenders are looking for a DTI of 36 percent or less. However, your lender can help you determine what DTI works best for you, and if you are planning on renting out your second ranch, the possible income from that may be taken into account.

Your lender may also require a higher credit score than they did for your principal residence.

A score below 660 could make it difficult to obtain a loan for a second ranch.

Vacation Ranch vs. Investment Property There may not seem to be much difference between a vacation ranch and an investment property, but the IRS has rules as to the income and deductions that are available for both. If you own a vacation ranch and it is leased out for less than 14 days a year, you may deduct the mortgage interest expense (subject to mortgage indebtedness limits) and taxes as an itemized deduction. Any rental income does not need to be reported.

If your vacation ranch is used by you for more than 14 days as well as rented out, the income from rental is reported on Schedule E and the portion of interest and taxes allocable to the rental use is deducted on Schedule E against the income. The personal use portion is deducted as an itemized deduction. Direct and other rental expenses can be deducted against income, but these expenses cannot create a net loss.

If you use the ranch for personal use for less than 14 days a year and receive rental income, the ranch is considered a rental property and all expenses, including depreciation of the

Renting Out Your Second Ranch While renting out your second ranch as a means to have your vacation property pay for itself is difficult, you can at least offset the costs with the income. It is best to rent it out as often as possible, as vacation rentals can take a high weekly rent, especially if located in a prime area. Consider a vacation ranch in a popular vacation area with low ranch prices to increase your potential for profit, even if it’s not your ranch state.

Once you’ve bought your ranch, the next step is to find renters. Paid websites such as www.Rentalo.com, www.VacationRentals.com, www.VRBO.com (Vacation Rental By Owner) and www.CyberRentals.com are vacation booking companies that are searchable by a number of features and are a good way to advertise to prospective renters. www.RanchAway.com is an owner community that lists paid listings on several websites, including some of those above. Ranchowners pay $329 a year to list on www.RanchAway.com, while www.VRBO.com costs $279 a year.

To be competitive in the rental market, distinctive features are necessary. When purchasing your ranch, aim for an area with amenities available in the community, such as neighborhood pools, public beaches, ski resorts and golf courses.

Make the property attractive to families by adding features like pool tables, board games and TVs. Keep the house stocked with toys so that children will be occupied.

Some rental owners spring for the VIP treatment, offering weekly maid service, limousine transport and private chefs. If it’s in your budget, your ranch could be that much more attractive to renters with elegant tastes.

Don’t be afraid to accept less for a last-minute deal. Offering a stay-for-four-nights, get-thefifth-free special would lure previously hesitant renters, and you’ll still be getting more than you would have if the ranch had been empty for a full week. It is also a good way to occupy the ranch during the off season.

Comply with Rules, Regulations and Laws Before you start renting out your property, make sure you research the many rules for renting out properties. Fines for noncompliance can be steep. These rules vary by region, and a good place to start is the U.S. Department of Housing and Urban Development’s website, www.hud.gov.

You might also consult with an attorney to be sure you are fully aware of the local laws and have all the proper forms required.

You will also want to have a rental agreement signed by both you and the tenant, identifying both parties, the property, the terms of the rental and the amount to be paid. You may also consider hiring a property management company to handle the care of the day-today operations and tenant needs. You may make less profit, but you will have less handson responsibility.

Your Ranch Away From Home Regardless of whether you choose to use the ranch as an investment property or solely as a vacation ranch, the benefits of having a retreat for you and your family are many. And if you can use rental income to pay for all or some of the costs related to purchase, the rewards become financial in addition to sentimental.

Experts say there is a short window of opportunity for people to purchase the best property possible before ranch prices and mortgage rates increase. The economy will recover, and as it does, your chance to make the most out of less will slowly disappear.

This article was submitted by Cornerstone Mortgage Company, a full-service mortgage banker operating more than 75 offices in Texas, Georgia, Minnesota, Oklahoma, Louisiana, Arizona, Colorado, California, Mississippi, Nevada, North Carolina, Utah and Washington.

Corporate Office/Houston, 713.621.4663, 1177 West Loop South, Suite 200, Houston, Texas 77027.

Bass Time Written by Joe Doggett

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he rod tip bounced and the line came tight, angling to the left along the reed-rimmed shoreline. Liz Coulter lowered the rod, reeling to keep pace, and struck hard to the open side of the johnboat.

A two-pound largemouth bass promptly jumped, showing an open mouth, flared gills and the flapping plastic worm pinned in the corner of the jaw. The hooked bass fell back, pulled hard, then jumped again.

Rickey Morris nudged the stern-mounted electric trolling motor, maneuvering to deeper water. “Good job,” he said. “You did that exactly right.”

“It’s about time,” Liz laughed. “I didn’t do so well on the first two strikes.

Or ‘taps,’ or whatever you call them.”

We were fishing a small lake near Morris’ home south of Houston.

The bass plodded close and I reached with thumb and curled index for the classic “lip grab.” I held the chunky green and gold fish aloft.

“Congratulations; your first bass.”

We snapped several photos then released the fish. It flashed away, diving into the clear green.

Coulter is an avid saltwater angler, but that recent foray was her first for largemouth bass. She was wielding a 6 1/2-foot two-handed rod and a free-spool casting reel, and handled the casting tackle with growing confidence as Morris eased the 12-foot aluminum boat along the shoreline.

The lure of choice was a crawfish-type soft plastic rigged snagless “Texas style” on a 4/0 worm hook below a 1/4-ounce bullet-type slip sinker. The same setup, with various modifications, has been used a jillion times in the lakes and ponds of southeast Texas _ and it remains a killer for summer bass.

It also is an excellent choice for the newcomer. First, with the hook point turned back into the soft plastic lure body, the offering is virtually snagless amid “hard” cover such as logs, stickups. and reeds.

The weighted “worm” is relatively easy to cast; the compact lead bullet sinker provides a positive payload for tentative lobs. Conversely, other effective bass lures demand a higher skill level for smooth deliveries. Airresistant payloads such as tandem-bladed spinnerbaits and balsa thinminnow floating/diving plugs are among the worst.

For example, during the same session, I attempted to wham a thinminnow plug into the gusting southeast wind and _ well, the backlash easily was among the top 10 in my 50-year fishing career. Maybe the top five. The spool was absolutely buried amid exploded monofilament. One look and I started snipping with line clippers. It was brutal, especially with semi-pro credentials riding on the effort.

Also an advantage, the pace is slow with a bottom-bumping weighted plastic. You don’t wear yourself out with chunk-and-wind. And, on the sluggish days of summer, allowing the bait to dawdle in a “fishy” spot gives lurking bass plenty of opportunity to seize the moment.

Finally, bass absolutely love soft-plastic baits. The strikes usually are confident and fish tend to hang onto (even attempt to swallow) the lure.

The hit typically transmits as a “tap” or “bump” then the line comes tight

as the fish moves off with the chewy plastic in its mouth. This deliberate tempo gives the angler time to react.

The single drawback at the beginner level for fishing bottom-bumping Texas-rigged plastics is the violent hook-set required to set the barb.

Remember, the hook point is pressed back into the soft body of the lure to keep it from snagging as it bounces and flutters over the bottom contours. Also, the line in deeper water encounters more water resistance as the angler raises the rod on the strike.

Liz missed the first two fish simply by not hitting back hard enough. The bass were there but she failed to reach them with a soft reaction. No question _ bass are more difficult to hook on Texas-rigged worms than on fast-moving plugs with exposed trebles. On the latter, the solid contact is automatic.

But the tuned angler willing to pay attention can make the adjustments.

During our two-hour late-afternoon session, Coulter caught six bass to three pounds . Her skill level increased markedly as she understood the drill.

I caught four bass. Of course, I was in the center seat and forfeiting most of the “ice cream” water. Well, that sounds good. Rickey caught two but he was driving the boat and, way back in the stern, fishing seriously used water. Needless to say, in a desperate game of catch-up, I was giving him few uncontested shoreline shots.

Come to think of it, even with solid contact on the hook-set, I jumped off a “solid 5.” So did _ well, never mind about her.

But, regardless of experience and on large water or small, the angler using a snagless soft plastic has taken a major step forward in catching summer bass.

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GRANADA SPRINGS – 230 ACRES Kerr County, Texas

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Bandera

Ranch

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orse/small cattle and hunting ranch with a 5,400± square foot barn that many equestrian lovers are looking for. The custom home inside the barn offers three bedrooms and one full bath. The updated kitchen with granite counter tops and cherry cabinetry is open to the living area. The master bedroom is split for privacy and the bathroom has also been updated with the same cabinetry and granite. This barn/ home offers easy access to the animal stalls, protection from the elements, covered storage for trailers, implements and a drive through garage. Located between Bandera and Medina, Texas, with easy access to Kerrville, San Antonio, Boerne, Bandera and Medina. This ranch is the perfect combination of what everyone is looking for in the Texas Hill Country: peace and quiet, beautiful long distance front porch views, cool southern breezes, excellent deep top soil for field cultivation, selectively cleared forests for horseback or motorcycle riding, low fenced for free range exotic and native wildlife migration and a stock tank.

Teich Properties, LLC Broker, Babo Teich, Agent 830-460-4166 • 210-218-9769 • www.teichproperties.com Heart Of the Texas Hill Country

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Deitra Robertson Real Estate, Inc. 38351 FM 1736 • Hempstead, TX 77445 979-921-9470 office • 832-642-6789 cell www.IKnowRanches.com Deitra@IKnowRanches.com

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Windy Hill Ranch Madisonville, Texas Have you thought about owning a ranch that was an easy drive from your Houston home…A place where you could go with your family and enjoy the “quiet” and actually see the stars at night…Have those cattle you’ve always wanted, count the new calves as they are born, help with the spring branding…A place you can ride your horses for hours over beautiful pastures, through creeks and old stands of trees, OR, train in a covered arena facility that is so nice you can have horse events there if you choose?

Then there is the hunting and fishing to enjoy on these almost 3,000 acres. Fish in the many stocked ponds and lakes and enjoy your own white tail deer population during hunting season.

Windy Hill Ranch offers you all of this. An easy drive from Houston to Madisonville, the access to Windy Hill is all paved highway and farm to market roads. If you love horses and love to ride, there will be no finer place than here. The covered arena facility has a 275' x 125' arena, office space, apartments, 16 stalls, holding pens for cattle―it is the finest facility in this part of Texas. There is a separate 10-stall center aisle barn with runs, numerous turn-out areas, lighted cutting pen, walker and much more.

The cattle facilities are the top-of-the-line with hydraulic trim tilt squeeze chute and 10,000# Tru-Test scales. The improved pastures allow you to run a cow/calf or stocker operation. There are four large hay storage barns to house the hay that is grown on the ranch.

At the end of the day, when that good kind of “tiredness” starts to take over, kick back on the porch or by the pool of the comfortable brick home that sits on the hilltop and appreciate the lifestyle!

Deitra Robertson Real Estate, Inc. 38351 FM 1736 • Hempstead, TX 77445 979-921-9470 office • 832-642-6789 cell www.IKnowRanches.com Deitra@IKnowRanches.com

Panther Creek Ranch Texas Hill Country Paradise Texas Hill Country Paradise

This wonderful compound in the heart of the Texas hill country has been used as a retreat by the same family for generations. Located in Kerr County near the town of Hunt, it is comprised of 362¹ acres with a mile of frontage on the Guadalupe River. Panther Creek originates at the property’s springhead on its northwest pasture and flows into the Guadalupe. The main house allows for generous and comfortable family living, and provides ample room for guests as well. Multiple structures and outbuildings on the property are suitable for use in a variety of ways, either to accommodate employees, caretakers, extended family or guests. There are endless outdoor entertaining and recreational opportunities afforded by expansive lawns with mature trees, a large patio, a fenced swimming pool with diving board and slide, a tennis court and river activities on the Guadalupe.

The area is well-known for its varied wildlife and is prime for whitetailed deer during hunting season. Price upon request. Please call for additional information on this exceptional property.

Al Philip 210-822-8602 www.KuperRealty.com

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16 La Buena Vida

The Sculpture Ranch JOHNSON CITY, TEXAS

This magnificent ranch is a jewel of the Texas Hill Country, owned at one time by President Lyndon Johnson. In 1999, it was purchased by the Italian artist Benini, who turned these special 142 ± acres into a showcase for international sculpture and - in the natural valley - a 11000 ± sq.ft. studio building and galleries. At the top of the highest (1800’) hill sits the main cedar and stone 2200 ± sq.ft. home, with 360 degree views. Secluded in the woods is the 1100 ± sq.ft. guest house. MLS#926154 $2,647,000 Joe Salinas 830.456.2233

Central San Antonio 800-584-5400 • North San Antonio 800-337-0333 • Hill Country 800-419-5682 • Stone Oak 800-982-1447 • www.KuperRealty.com

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Texas Hill Country Guadalupe River Ranch COMFORT, TEXAS

The incredible Guadalupe River borders approximately one mile of this amazing multi-use ranch located only 50 miles Northwest of San Antonio. The sprawling estate includes a luxurious main home with 7 bedrooms/7.5 bathrooms, a 3 bedroom/3 bathroom renovated farmhouse, 4 cottages, equestrian center, conference center, art studio, private office and a full service restaurant. 1700 grapevines and 50 olive trees adorn the estate. Whether your dreams are of owning a working ranch, family gathering retreat, or special events resort, the magic of this estate will work for its success. Rick Kuper 210.240.8282

Central San Antonio 800-584-5400 • North San Antonio 800-337-0333 • Hill Country 800-419-5682 • www.KuperRealty.com

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19,680± Acre Madera Canyon Ranch Jeff Davis County, Balmorhea, Texas Legends of Texas evolve from historic ranches like this, extending from picturesque canyons to the Davis Mountains, habitat for trophy class mule deer, Aoudad sheep, elk, quail, dove, turkey, black bear, antelope, javelina, mountain lion and others. Circa 1904, the Kingston Homestead limestone lodge is enhanced by a historic bunkhouse, cabin, tack room, walk-in cooler, game cleaning rack, barns, pipe cattle pens and metal feeders. The ranch is watered by Kingston Springs and other springs, six wells and six tanks. Located over the Barnett Shale and Woodford Shale formations, it will convey a portion of fee minerals plus 3,000+ acres state classified minerals. Al Philip or Robert Dullnig 210-415-8602

4,648± Acre Historic Stone Ranch Maverick County, El Indio, Texas Owned by the same family since 1960, this historic ranch has bold terrain ranging from level bottomland to gently rolling bluffs overlooking miles of the blue-green water of the wild and scenic Rio Grande River. A highlight is the 1940’s hacienda-style residence with charming courtyard linked to a second home and barn. Fabulous year-round water includes 7± miles of the river, irrigation canal with pumping rights, 35± acre lake and 5 stocked tanks. Wildlife is phenomenal, with trophy whitetail deer, turkey, javelina, hogs, quail, dove plus great duck hunting and fishing. Minerals are negotiable. Robert Dullnig, 210-213-9700

Kuper Ranch Sales • 210-804-1515 • Toll Free 866-904-1515 • www.KuperRanchSales.com

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1,664± Acre Rancher’s Dream Showplace!

Falls county, Satin, Texas 20± miles southeast of Waco, 1.5± hours from Austin or Dallas, there sits a property offering exquisite living on a working ranch. The custom estate home, featured in several magazines, was built in 2006 and offers 7,300± square feet of uniqueness. The home overlooks a 15± acre lake and waterfall pool bordered by an entertainment cantina and separate cooking cabana, all surrounded by majestic oaks, beautiful views and superb sunsets. The highly improved pastures have been home for many years to a legendary registered cattle operation with top-notch handling facilities; inclusive of show, sale, horse and hay storage barns, 3 sets of working pens, water wells, overhead grain bins, molasses storage tanks and staff housing. Excellent rainfall and live water is abundant throughout the property including a large creek. Turkey and hogs are plentiful, and there are even a few whitetail deer. Partially owned minerals will convey to new owner. Howard Ham 210-382-5003

Kuper Ranch Sales • 210-804-1515 • Toll Free 866-904-1515 • www.KuperRanchSales.com

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19,680± Acres, Madera Canyon Ranch Jeff Davis County, Balmorrhea, TeXas A historic ranch extends from picturesque canyons to the dramatic Davis Mountains, habitat for Trophy Class mule deer, Aoudad, elk, quail, dove, turkey, black bear, antelope, javelina, mountain lion and others. The 1904 Kingston Homestead lodge is enhanced by a garage, historic bunkhouse and cabin, tack room, walk-in cooler, game cleaning rack, 3 sets of pipe cattle pens and metal feeders. The ranch is watered by Kingston Springs, other live springs plus 6 wells and 6 tanks. Located over the Barnett Shale and Woodford Shale formations, the ranch conveys partial minerals. Owner will divide into 10,253± acres and 9,424± acres. Al Philip 210-415-8602

Kuper Ranch Sales • 210-804-1515 • Toll Free 866-904-1515 • www.KuperRanchSales.com

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Open Country International

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2,903± Acres, Eagle Ridge Ranch Mason County, Mason, TeXas Fabulous, extensive live water includes 1.7± miles each of Llano River frontage and James River frontage, 2.1± miles of Mill Creek, plus 6 water wells, 2 tanks and a pivot irrigation in a 500± acre game trap. Home to many exotics (zebra, blackbuck, water bok, gazelle, axis, etc.) as well as native wildlife. A stunning 5,366± square foot, seven bedroom, five and one half bath lodge features porches overlooking the James River. Substantial infrastructure includes a garage, game processing facilities, foreman’s home, cabins, barn/sheds, stables and cattle pens. Minerals are negotiable.

Robert Dullnig, Broker Associate 210-213-9700

Kuper Ranch Sales • 210-804-1515 • Toll Free 866-904-1515 • www.KuperRanchSales.com

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American luxury estates

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

COLLEGE STATION, TEXAS – 4000 ACRES Just minutes from Bryan-College Station, this Grimes County Ranch is truly a one-of-a-kind property.

Spectacular five-bedroom, six-bath lodge with a swimming pool and set on the banks of a private 110± acre lake. In addition to the large private lake, there are many other water features, including over two miles of Navasota River frontage, Stewart Lake and 14 other duck impoundments.

CLEBURNE, TEXAS – 3730 ACRES Gorgeous 10,000 SF log home nestled in the heart of Texas.

This incredible home was custom designed with mesquite floors, cabinets, and doors, has rock floors, log beams, and makes you feel like you are on a retreat in Colorado. The home is a five bedroom, seven bath architectural feat. There are many other improvements including a foreman's home, maids quarters, pool and pool house, equipment barns, quail release pen, dog kennels and much more.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

RICHARDS, TEXAS – 1159 ACRES Easy 45 minute commute from The Woodlands - 4 bedroom, 5 ½ bathroom home, with wraparound porch, surrounded by giant pine trees. Improved Bermuda grass and Alicia grass and winter rye grass pastures, 26 ponds, two well-built cattle working facilities, 3 barns, and 3 water wells. Lake Creek flows through the southern portion of the ranch. Property can be purchased as a whole or subdivided into two tracts.

GLEN ROSE, TEXAS – 3524 ACRES Working livestock and wildlife ranch, just south of the Brazos River, rolling fields with lush native grasses slope to high hill tops, flowing Creek with waterfalls (under normal rainfall conditions), 18 Acre Lake, 5200± SF with spectacular views. 675 Acre high fenced pasture with trophy white-tailed deer. This is a turn-key ranch ready to go with all equipment negotiable; seller will convey 25% of the minerals.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

SNOOK, TEXAS – 1026 ACRES 20 miles SE of College Station, native woodland habitat and improved Coastal Bermuda fields, two creeks flow through the ranch, 6,500± SF rock home, rock dog kennels, rock horse barn with of 8 horse stalls, lighted roping arena, 550 acre pasture is deer proof fenced and has had genetically superior White-tailed Deer.

BOERNE, TEXAS – 1396 ACRES The Historic Broken O Ranch located in Boerne, Texas, is one of Texas’ finest Ranches, and offers breathtaking views, miles of well-established roads, and the beauty that only the Texas Hill Country has to offer. Within a few miles of eclectic shops and dining of quaint Boerne, and within 35 miles of the San Antonio airport, industry, and shopping, the Broken O Ranch is an impeccable choice for investment living.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com HUNT, TEXAS – 556 ACRES This ranch has over a mile of the headwaters of the Guadalupe River along with Flat Rock Creek.

The ranch has some of the first set of springs that start the Guadalupe River on its way to the ocean. Gorgeous water! The incredible improvements total over 16,000 SF. The historic rock lodge sprawls out on the countryside and overlooks the river. There is a 32 stall vintage horse barn, another 12 stall barn, arena, cabins and much more. This peaceful setting is located near the famous camps of Hunt such as Waldemar, Camp Stewart, Camp Honey Creek and MO Ranch.

MEDINA, TEXAS – 1100 ACRES Two sides lined by water! There is approximately 11,000 feet of the Medina River and over 7500 feet of Wallace Creek. The 9200± SF main home was originally built in the 1940’s. It’s timeless appeal with updated amenities combine into an extraordinary estate. Other improvements include the 2400±SF horse barn, implement shed and barn, round pen, arena, 980± SF cabin, office, party lodge with expansive game room.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

LLANO, TEXAS – 575 ACRES WITHOUT A DOUBT THE BEST RANCH IN TEXAS! The finest highly improved ranch in Texas currently on the market today! This masterpiece is better than any Five-Star Resort! The lodging and the entertainment facilities are absolutely the best you will find in Texas! ONE OF THE BEST HUNTING RANCHES IN TEXAS WITH WORLD CLASS WHITETAIL AND AXIS DEER!

MEDINA, TEXAS – 500 ACRES Located in the picturesque Texas Hill Country, this spectacular 500 acres offers both live water and beautiful views. A historic looking home, constructed from rock and timber and a newly constructed road system help to complete the property. Large rock bluffs and wonderful high country complete the landscape. This property is special with live water and awesome views.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

JUNCTION, TEXAS – 357 ACRES 4,000± feet of both sides of live spring fed Sycamore Creek with 3 dams, fantastic views, 80% cedar cleared, custom built hill country stone home, , 40’ x 50’ metal barn with 12 foot overhangs with electricity and water with adjoining working pens and loading shoot for cattle, three nice cabins, this is a highly desirable turnkey package.

KERRVILLE, TEXAS – 236 ACRES Superior horse facilities, 20,000-square-foot barn has 30 stalls, large indoor arena, indoor and out-door round pens, indoor and outdoor walkers, outdoor pens and stalls, 13-acre lake, game-fenced, three homes for housing guests or workers. Just minutes out of Kerrville.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com FREDERICKSBURG, TEXAS – 234 ACRES The ranch features approximately 2700 ft. of Bear Creek with several dams that create crystal clear lakes. A custom-built waterfall is directly in front of the back porch of the native stone 2 Bed 2 Bath home. Main house was built in 2006 and overlooks a lake with great landscaping. The Property also includes a 2 Story limestone rock house built in the late 1800’s that would make an incredible restoration project. The ranch also included barns and animal shelters with feed rooms. Part of the ranch has game-proof fencing and is cross-fenced.

KERRVILLE, TEXAS – 230 ACRES A unique Hill Country home plus entertainment lodge, 2 barns & rustic cabin are positioned high on a lime stone bluff overlooking an AMAZING spring fed waterway with terrific views. 4500± ft. BOTH sides of the spring fed Turtle Creek plus the Granada Spring which is a tremendous source of water even in this extreme drought! The setting for the three bedroom two and a half bath rock and stucco home, plus Lodge is a sunset watchers dream.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

HUNT, TEXAS – 170 ACRES Low maintenance, 4000± sq. ft. main home, great views, 2800± sq. ft. barn has two separate living quarters with full kitchen, walk-in cooler, fireplace and an art studio, high-fenced and is a hunter's paradise. The property has abundant recreational opportunities with access to a nice swimming area on the Guadalupe River.

FREDERICKSBURG, TEXAS – 208 ACRES First class amenities are included in the main house with over 8,000 square feet of highceiling, open concept, ranch-style architecture. This dream home has expansive patios for views and entertaining. Guest house and ranch office of 8500± square feet with outside activity area for basketball, softball, volley ball, horseshoes and BBQ functions.

2 stall horse barn with second floor cottage. 2000′ paved strip with hanger, plus a regulation trap & skeet range with lounge.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

FREDERICKSBURG, TEXAS – 40 ACRES THE ENCHANTED ROCK ESTATE – Set amid the wild granite landscape between Llano and Fredericksburg Texas is a small private magical village. Meander around in fascination as you take in the architectural wonderments that create a fantasy like environment amid the beauty of the unique landscape. The architectural flavors of Italy, Spain, Mexico, and Texas blend on this property creating a once in a lifetime work of art.

BANDERA, TEXAS – 144 ACRES Set back among the large oaks is a 3b/2b stone home overlooking over 800 ft. including both sides of Bear Springs Creek. Time and attention to detail has been put into this property as you can see from the park like detail up front and native landscape along property lines to create the perfect barrier. Springs of Bear Springs Creek emerge on this property and never stopped during the drought last year. You can literally see the water coming out of the ferns along the banks. Fantastic deep swimming holes are captured by a nice dam that captures water on this property. This property boasts a clean 30-acre pasture perfect for equestrian, grazing, or orchard farm.

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1845 Water Street • Kerrville TX 78028

830-257-8881 www.TexasLandMen.com

FREDERICKSBURG, TEXAS – 20 ACRES This is truly one of the finest homes to be built in the Fredericksburg area. The main residence consists of 6800± SF with additional large covered patios. A beautiful pool located in the back yard sits next to a wonderfully designed outdoor cooking area. Brazilian cherry hard wood floors and tumbled travertine flow through the home. This home is designed for entertaining! There are too many other details to list!

KERRVILLE, TEXAS – TUSCAN ESTATE This Comanche Trace estate sits on 1.49 acres of incredible Hill Country views! The 6400SF, five bedroom, 6+bath home, is absolutely gorgeous. There is a stunning gourmet kitchen; travertine floors throughout; three fireplaces; the walls all have custom finishes; coffered or barrel ceilings; central vac system; outdoor cabana at pool; game room/ guest suite; four car garage; beautifully landscaped grounds and much more. This is a gorgeous home in a great location that you need to see!

Featuring one-of-a-kind properties. ->

The best ranches in Texas can all be found in one spot...

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830-257-8881

Live water ranches with thousands of acres for sale.

Now is the time to sell your property with Texas Landmen.

Why? Because we have aggressively expanded our marketing platform and our brokers are seasoned professionals and the best in the business. We have consistently sold more property each year while other firms have stagnated.

Luxury estates with exquisite homes!

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In the last 3 months we have closed 12 properties, 20,554 acres and $100,994,442 in total sales!

www.TexasLandMen.com Visit our website today to view our properties or contact us regarding the sale of yours.

830-257-8881 • 1845 WATER STREET • KERRVILLE, TEXAS 78028

COLORADO Your Your Gateway Gateway to to Exceptional Exceptional Country Country Farm Farm Ranch Ranch Properties Properties Around Around the the World World

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Walton Ranch Jackson, Wyoming Sited along the legendary Snake River, the 1,848-acre working ranch is surrounded by the grandeur of Yellowstone and Grand Teton National Parks yet is minutes to world-class ski resorts and Jackson - home to some of America’s top corporate leaders. A rare opportunity to own wideopen spaces in one of the most sought-after locations in the world. $100,000,000. Ron Morris at 970-535-0881 or Billy Long at 970-927-3850.

Big Creek Ranch Steamboat Springs, Colorado Private yet only fifteen minutes from Steamboat Springs, the 5,034-acre ranch is nestled in its own valley surrounded by national forest. A modern, western-style, 11,000 square foot lodge, five additional houses, four utility buildings, a historic 100-year-old barn and five miles of Big Creek complete this fabulous ranch which also has development potential. $59,900,000. Ron Morris at 970-535-0881 or Billy Long at 970-927-3850.

Five Star Ranch Westcliffe, Colorado Bordering large private ranchland with unobstructed, panoramic views of the Wet Mountain Valley and snow-capped Sangre de Cristo Mountains, Five Star Ranch offers gracious mountain living in one of the most exquisite homes on the market today - named “Home of the Year”

by Timber Home Living. 561 total acres located five minutes north of Westcliffe offering privacy and masterpiece improvements in a beautiful mountain setting. $4,900,000. Ron Morris at 970-535-0881.

A Performance Equestrian Estate at Cottonwood Springs Ranch Durango, Colorado A masterpiece estate with exquisite state-of-the-art equestrian breeding and training facilities, the impeccably planned 540-acre ranch features a 5,700 square foot New Mexico-style residence blending old and new design elements. Other improvements include a guesthouse, foreman’s house, 1890’s cabin, 20,000 square foot barn and office, show arena, round pen, equine medical facilities, over fifty stalls and eight pastures.

Borders BLM land and offers ideal wildlife habitat. $10,795,000. Ron Morris at 970-535-0881 or Billy Long at 970-927-3850.

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JC Mesa Ranch Telluride, Colorado Commanding majestic 360-degree views of Telluride and surrounding peaks, the 2,379-acre ranch is one of the only remaining undeveloped and unencumbered ranches in the Telluride area. Eighty percent of the ranch is flat to gently rolling terrain with meadows, open parks, evergreens and towering aspen groves. JC Mesa Ranch affords a rare opportunity to own a large, private ranch in one of the most spectacular and captivating places on earth. $29,000,000. Ron Morris at 970-535-0881 or Billy Long at 970-927-3850.

Moonshadow Ranch Steamboat Springs, Colorado One of the most architecturally impressive mountain/custom equestrian properties in the south valley of Steamboat Springs near Lake Catamount, the 38-acre Moonshadow Ranch offers beautiful views in every direction and fifteen minutes from Steamboat Springs and ski area.

The gated entry property consists of an exquisite, 7,746 square foot main residence, a caretaker’s home, six-stall horse barn, riding arena and fenced pastures. $7,500,000. Ron Morris at 970-535-0881.

North Platte River Ranch Casper, Wyoming Situated along twelve incredible miles of the North Platte River, this large production ranch of 69,556 total acres typically runs 2,800 sheep, 550 yearling ewes and rams, 430 cow/calf pair and 80 head of replacement heifers and bull battery. The ranch is well watered, has three homes, bunkhouse, shop, barn, scales and two sets of corrals. This sportsman’s paradise offers premier fishing, wildlife and outstanding livestock production. $28,000,000. Ron Morris at 970-535-0881 or Matt Johnston at 307-655-2273.

Saguache Creek Ranch Moffat, Colorado This quality commercial cow/calf operation on Saguache Creek at the northern end of the San Luis Valley has combined leased and fee land totaling over 350,000 acres. Working corrals with modern hydraulic equipment allow for sorting and working over 1,000 head at a time.

Improvements include a modern owner’s home, foreman’s home, caretaker’s house, heated shop, equipment storage buildings, barns and adequate calving facilities. $4,000,000. Ron Morris at 970-535-0881 or Jason Legler at 970-978-1559.

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Open Country International

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McLain Flats Luxury

Stunning Views from Red Mountain

Aspen, Colorado Breathtaking luxury estate on over 6 acres with inspiring views of all four ski areas! The inviting floor plan features five en suite bedrooms, two half baths, 10,460 square feet, reclaimed wood floors and timbers, granite counters, dry stacked stone, gorgeous main floor master suite, large media room, study, exercise room, cozy family room adjacent to the gourmet kitchen, large windows, gas fireplaces, state of the art safety systems, 3-car garage, hot tub, over 2,200 square feet of inviting patios for outdoor entertaining, mature landscaping with streams, and two ponds.

The irrigated meadows are perfect for horses, a barn or a caretaker’s house. www.McLainFlatsEstate.com $18,750,000 Partially Furnished

Aspen, Colorado The stunning views of all four ski areas and beyond are showcased from the floor to ceiling windows in this mountain contemporary home on prestigious Red Mountain! Perfect for intimate family gatherings as well as large scale entertaining, the spacious floor plan includes 4,844 square feet, five bedrooms, five full and one half bath, vaulted ceilings, hardwood floors, dramatic stone fireplace in the sunken great room, gourmet kitchen with center island, granite counters, and stainless appliances, spiral staircase, elevator, air conditioning, over 1800 square feet of deck space, hot tub and a 535 square foot 2-car garage. $6,395,000 Furnished

Sophisticated Downtown Aspen Condo

Pure Colorado Style

Aspen, Colorado Remodeled with a mountain zen décor, this sophisticated ski-in/ski-out corner condominium offers views overlooking downtown Aspen and features three bedrooms, two baths, 1,242 square feet, floor-to-ceiling windows with abundant natural light, high quality finishes and stainless appliances, nice kitchen with bar eating area, inviting living spaces, wood-burning fireplace, and attractive amenities of a complex pool and hot tub, on-site management and ski storage. Within easy walking distance to restaurants, shopping and clubs! Complete with classic contemporary furnishings. $1,595,000 Furnished

Aspen, Colorado Enjoy views and privacy from this classic Colorado style home located within walking distance to the downtown core. Features include five bedrooms, six full and one half bath, 5,892 square feet, log and stone accents throughout, upper level great room and dining room, open kitchen with large island, expansive windows, large family room with fireplace, gorgeous office/study, private patio and hot tub off the entry level master bedroom, second master on the top floor for easy living on one level, abundant closets and storage space, two car garage, inviting wrap around deck, mature landscaping, and Aspen Mountain and Independence Pass views from the quiet east side of Aspen. $6,995,000 Furnished

Craig Morris • 415 East Hyman Avenue • Aspen, Colorado 81611 • 970-379-9795 cell • 970-925-6060 office Morris@sopris.net • www.CraigMorris.com • www.AspenSnowmassSIR.com

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Open Country International

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Ski-In/Ski-Out Downtown Aspen Condo

“The Charmer” in the West End

Aspen, Colorado This stunning condo gets a “wow” with a truly “ringside” location on Aspen Mountain, ski-in/ski-out access just steps from the door, and views to die for! The gracious floor plan is perfect for entertaining, and features 3 bedrooms, 3.5 baths, 1,762 square feet, gas fireplace, top of the line materials, steam shower in the master bath, air conditioning in the master bedroom, great built-ins for storage, designer furnishings, and assigned parking in the common garage. The complex amenities include a swimming pool, hot tub, exercise room, shuttle and more. The perfect property for the sophisticated buyer that only wants the best! $4,395,000 Furnished

Aspen, Colorado Gorgeous example of sophistication, class, details, charming design, and execution! This exquisite home is located on a large, private lot in the West End on a tranquil, park-like setting with panoramic views of Aspen Mountain, Highlands, and Tiehack. Features include five bedrooms, five full and one half bath, 6,098 square feet, open floor plan, upper level master suite with office, library and rooftop terrace, four fireplaces, central air conditioning, radiant heat, delightful outdoor spaces for dining and enjoying the Aspen quality of life, 2-car garage and lots of sun. Within walking distance to the Music Tent and The Aspen Institute. $7,995,000

Downtown Mountain Contemporary Home

Five Trees Sanctuary

Aspen, Colorado Even the most discriminating will appreciate the quality of this gorgeous mountain contemporary home situated in an irreplaceable downtown location with 6,792 square feet of space that is difficult to duplicate.

Features include six en suite bedrooms (including an attached caretaker apartment with private entrance), three half baths, three family rooms, sweeping stairway in the vaulted entryway, entertaining areas on three levels, media room, exercise room, fantastic bar and climate controlled wine room, elevator, radiant heat in the master bath and guest master bath, air conditioning, floor-to-ceiling windows with views of Aspen Mountain, mature landscaping and a 2-car garage with abundant storage. $8,750,000 Furnished

Aspen, Colorado Exquisite and timeless finishes are found throughout this ski-in/ski-out home on a cul-de-sac in Five Trees! The floor plan is perfect to entertain a party of 50, yet warm and inviting for intimate gatherings. Features include five bedrooms, four full and one half bath, 5,628 square feet, chef’s kitchen with granite countertops, huge stone fireplace, deluxe master suite with spacious closets and marble bath, recreation room, exercise room, media room, library, reclaimed beams, hardwood floors, 3-car garage and unobstructed mountain views of Willow Creek and the Maroon Creek Valley. The exterior is maintenancefree, and the beautiful landscaping includes perennial flowers. Walk to schools and the Aspen Recreation Center! $6,450,000

Craig Morris • 415 East Hyman Avenue • Aspen, Colorado 81611 • 970-379-9795 cell • 970-925-6060 office Morris@sopris.net • www.CraigMorris.com • www.AspenSnowmassSIR.com

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Open Country International

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Weiswood at Castle Creek

Classic Chateau on Red Mountain

Aspen, Colorado Just four miles from Aspen! With 12 acres of manicured grounds and flower beds surrounded by forests of aspen trees and fields of native grasses, Weiswood beckons you to one of the most romantic settings in the Roaring Fork Valley. Every detail speaks of thoughtful design and exquisite craftsmanship. You may never want to leave the warm and inviting 5,064 square foot home, which features 4 bedrooms suites, heart of pine floors, rich wood paneling, gourmet kitchen, gracious dining room, private master suite with sitting area, media and exercise rooms, and huge windows that frame glorious views of the Castle Creek Valley.

It’s almost heaven! $8,500,000 Furnished

Aspen, Colorado Classic chateau-style home located front and center on Red Mountain, overlooking downtown Aspen and offering breathtaking views. Warm and inviting, the exquisite finishes and features include 6 bedroom suites, 8,846 square feet, natural stone, reclaimed hardwood floors, chef’s kitchen with granite island and stainless appliances, large master suite with sitting area, master bath with steam shower and tub, exercise room, library, wine room, beautiful theater with large screen and stadium seating, coffered ceilings, great room with expansive windows and bar area, fabulous deck, terraced back yard with private sitting area, and wonderfully landscaped grounds. $14,950,000 Furnished

East Aspen Estate

Irreplaceable and Rare

Aspen, Colorado Setting the standard for elegant mountain living, this private gated estate on an extraordinary 12.78 acre setting in East Aspen is a timeless and distinct mountain home boasting unrivaled craftsmanship, attention to detail, and quality of the highest caliber. Floor to ceiling glass captures the majestic views with Aspen Mountain perfectly framed in the foreground. The residence is distinguished with 10,390 square feet and features 6 bedroom suites, caretaker quarters, hardwood floors, vaulted ceilings with wood beam accents, gourmet kitchen, expansive patios and decks, cozy outdoor spaces, and warm southern exposure with all day sun. Just 5 minutes to the gondola. $12,950,000 Furnished

Snowmass Village, Colorado Nestled into the hillside at the end of the private Pioneer Springs Ranch, you’ll enjoy incredible views from Snowmass to Aspen Mountain from this mountain contemporary estate situated on over 40 pristine and private acres. The unique 13,000 square foot home boasts large open living spaces with expansive master suite, a gracious and inviting guest master suite with private deck, two media/family rooms, a billiards and game room, private office/loft with deck, covered patio with pizza oven, fireplace, and built in grill, large hot tub and fire pit, state of the art mechanical systems, 3 car garage, caretaker unit, and a gourmet kitchen that any chef would appreciate. $17,950,000 Furnished

Craig Morris • 415 East Hyman Avenue • Aspen, Colorado 81611 • 970-379-9795 cell • 970-925-6060 office Morris@sopris.net • www.CraigMorris.com • www.AspenSnowmassSIR.com

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French-Inspired Mountain Home

Barragan & Legorreta Inspired Retreat

Aspen, Colorado Comfort, elegance, master craftsmanship, all day sun and an uncompromising attention to detail combine to make this home one of the finest on the quiet east side of Aspen, across from Aspen Mountain and just four minutes to the central core. Features include 6 bedroom suites, stunning views, carved wood beams, gourmet kitchen open to the living and dining areas for ease of entertaining, master suite with exquisite master bathroom with Blue Bahia stone, richly appointed guest suites with expansive views, wine cellar, three gas fireplaces, wire-brushed white oak hardwood floors, super quiet roller shades, snowmelted driveway and decks, and two hot tubs. Pure magic! $10,875,000

Aspen, Colorado For those who appreciate the beauty of design and demand excellence in their architecture, there is a home in Aspen like no other. Designed in the style of renowned Mexican architects Luis Barragan and Ricardo Legorreta, this home is located just a few minutes from the town’s core.

Intelligently positioned on 5.73 acres with just over 9,000 square feet, the numerous amenities include two large master suites plus 3 additional bedrooms, 5.5 baths, spacious floor plan, media room, professional kitchen, central gallery for world-class art, fitness room, interior courtyard with fountains, and caretaker unit with separate entrance. Unobstructed views of all four ski mountains complete the package! $12,950,000

Storybook Charm in Starwood

Premier Downtown Location

Aspen, Colorado Located on 3 private acres with meandering garden paths and a meadow filled with wildflowers, this European inspired home was designed and constructed with care. Features include 3 bedrooms, 3 baths, 3,548 square feet, office/4th bedroom/2nd family room, antique heart pine flooring and cabinetry, reclaimed Douglas Fir beams, vaulted ceilings, custom iron hand railings, French doors in the living room, woodburning fireplace, 672 square foot two car garage with built-in shelving and huge storage loft above, authentic cobblestone auto court, patio, sauna, hot tub. Within the exclusive gated subdivision of Starwood, this is a true retreat! $2,975,000

Aspen, Colorado Nestled on the east side of downtown Aspen, this mountain contemporary home offers fantastic Aspen Mountain views, in town convenience, quality and style. The upper level master, large kitchen and main living areas welcome abundant natural light and an open floor plan for relaxed living. Down the sweeping staircase to the lower level is a large family room/billiards room/media center adjacent to a fabulous bar and wine room designed for entertaining. The five bedroom suites utilizing all three levels, classic finishes of dry stack stone, barrel vaulted ceilings, hardwood floors, and rooftop deck with hot tub make this an attractive alternative for those appreciating the urban experience. $9,950,000 Furnished

Craig Morris • 415 East Hyman Avenue • Aspen, Colorado 81611 • 970-379-9795 cell • 970-925-6060 office Morris@sopris.net • www.CraigMorris.com • www.AspenSnowmassSIR.com

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1210 Westhaven Vail, colorado Privately situated in a gated community and on the rushing waters of Gore Creek, this authentic log home hosts four bedrooms, an office or nursery, and a fully-equipped, one-bedroom attached caretaker’s apartment. An open great room for entertaining makes this true Colorado home a joy to visit. Great use of space and the location of this home are truly irreplaceable.

This home is ski in and out from the Cascade lift and just steps to the Cascade Club and Spa. $5,950,000

967 Vail Valley Drive Vail, colorado Stunning design is apparent in this five-bedroom remarkable home just steps to Vail Village and the Ford Amphitheater. Contemporary detail throughout exudes a tranquil and inviting atmosphere in which the out of doors is brought inside and enjoyed from each room. Plush gardens, Gore Creek and a private water feature complement the grounds and can be enjoyed from multiple outdoor living spaces. $7,200,000

Carroll Tyler and Dana Gumber 970-479-5762 ctyler@slifer.net • dgumber@slifer.net www.CarrollTylerinVail.com

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• Four Seasons Resort and Residences Vail Vail, colorado Be one of the fortunate few to live atop Four Seasons Resort and Residences Vail. Only 16 private residences available, each unique and custom-finished. This legacy property marries the finest in world renowned hospitality with the greatest ski mountain in the United States.

Bringing a whole new level to luxury living, each private residence owner enjoys all the amenities and features of this brand new resort. Prices range from $2,700,000 to $14,500,000. One to five bedrooms available.

424 Forest Road Vail, colorado Appropriately named “Woodhaven,” this is one of the few true ski-in/ski-out properties in Vail Village. A European-inspired ski retreat, Woodhaven cannot be duplicated. No expense was spared on the intricate details found throughout this masterpiece. Imported Koa wood from Hawaii warms the great room walls and ceilings, French lithograph wallpaper lines the halls and rich fabrics are featured in the bedrooms. This retreat features an indoor swimming pool, a separate guest house and a quaint dining gazebo tucked just off of Born Free ski run. The most unique and talked about property in Vail, this home has a history unlike any other. $15,900,000

Carroll Tyler and Dana Gumber 970-479-5762 ctyler@slifer.net • dgumber@slifer.net www.CarrollTylerinVail.com

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Autumn Hill Equestrian Farm Boulder County, Colorado Nestled in the foothills just outside of Boulder Colorado, Autumn Hill is blanketed by 95 luxuriant acres of rolling meadows and pastures. Interspersed amongst the foliage and fields lie three ponds and a ¾ acre enclosed biodynamic garden. Spend hours competing within one of the property’s superior riding arenas, meandering through the miles of trails, or gallivanting through the neighboring Heil Ranch Open Space. Autumn Hill stands as one of America’s premier dressage riding schools with one of the largest children’s programs in the country. The property comes fully equipped with a barn, tack rooms, two public restrooms and a shower, laundry room, office, wash stall, indoor riding arena, 2 outdoor arenas, large grass flat jumping field, expansive double fenced pastures and sand turnout paddocks.

In addition to the historically landmarked farmhouse and cottage that are currently built, there exists a development right for the construction of a principle residence and other related structures. Also included is a 6,648 square foot executive home located within the adjacent community of Lake of the Pines. Farm offered at $9,850,000. Executive home offered at $2,300,000.

Scott Franklund 303-440-4999 •1500 28th Street, Boulder, Colorado 80303 www.LegendaryProperty.com Scott.Franklund@SothebysRealty.com

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Caribou Springs Ranch Boulder County, Colorado Caribou Springs Ranch is a legacy working ranch that has been carefully developed into an exclusive Western-lifestyle community that captures the spirit of a ranch lifestyle while raising the standard of luxury living in the Rocky Mountain region. Its 590 acres comprise pastoral paradise buffered by miles of meadows set against a dramatic mountain backdrop of Boulder’s legendary Flatirons. The sale includes more than 590 acres, two luxury estates, three deeded buildable home sites, two caretaker’s homes, professional-grade equestrian barns and extensive and valuable water rights. The property features 24-hour security at its two handsomely gated entry points. Wide paved roads wind through the ranch’s natural landscape and lead to a community retreat complete with large outdoor pool, spa, barbecue pavilion and an open fire pit all nestled amidst towering mature cottonwood trees.

In addition, the serenity and authenticity that make Caribou Springs Ranch so irreplaceable is forever preserved thanks to the ranch’s status as a Boulder County conservation easement. Though worlds away from traffic and city congestion, Caribou Springs Ranch is conveniently sited within 90 minutes of Denver International Airport, world-class Colorado ski resorts and the business hubs of Denver and Fort Collins. $12,800,000

Scott Franklund 303-440-4999 •1500 28th Street, Boulder, Colorado 80303 www.LegendaryProperty.com Scott.Franklund@SothebysRealty.com

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For Auction: Incredible Properties in a Heavenly Location Shadow Creek Ranch, Silverthorne, Colorado Overlooking expansive views of the towering Eagle Nest Wilderness Area, vast valleys and wooded hillsides, two magnificent properties at Shadow Creek Ranch optimize luxury, privacy and beauty. 72-Acre Estate: Unrivaled 7,400 square foot, five-bedroom-suite home beautifully designed with custom finishes including wide-plank walnut floors, slab granite throughout, top of the line appliances and custom log and masonry work. Property value exceeds $5 million, Opening Bid $2,999,000! Buildable Lot: 70-acre home-site located amongst an aspen grove. Property value exceeds $2 million, Opening Bid $1 million! Both properties are located within Shadow Creek Ranch, a master-planned ranch community offering all the excitement and amenities without the labor and responsibilities. As an owner, you enjoy access to 6,000-acres providing trails for horseback riding, hiking, snowmobile and 4-wheeler use, world-class fly-fishing on more than 22 ponds as well as the Blue River, 5 fully-equipped guest cabins and a luxurious main lodge.

Legendary Home Auction 303-440-4999 www.LegendaryHomeAuction.com info@LegendaryHomeAuction.com

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Must Be Sold “Crown Jewel of Storm Mountain Ranch” Storm Mountain Ranch, Steamboat Springs, Colorado Don’t miss your chance to own one of the finest estates in Colorado. The developer of Storm Mountain Ranch chose this 70 acre home site for his very own. A 1,063 acre working cattle ranch, Storm Mountain Ranch with true “close in privacy” is just 5 miles from the world class Steamboat ski resort.

Fish for trophy trout on 2.5 miles of freestone Walton Creek, and 2 miles of spring creeks connecting 8 acres of ponds—all private. The ranch also offers miles of trails for hiking and mountain biking, gorgeous community lodge, horses and horse barn, and 5 owner’s cabins. The main home is 8,475 square feet, and the guest house is another 2,000 square feet. Designed by a world-famous architect and a world-famous interior designer, this home invites the outdoors in. This home has everything—outdoor shower, 4-sided infinity-edge pool, gourmet kitchen, 2 jetted hot tubs, Meridian Digital Home Theater System, 5 trout-fishing ponds that cascade from one to the next, is adjacent to the national forest, and much more. This breathtaking collection of land, amenities, home, guest home and proximity to Steamboat is a once-in-a-lifetime opportunity. Replacement cost-$18,500,000.

Offers considered over $11,900,000. Make offer! 3% courtesy to Procuring Broker.

Legendary Home Auction 303-440-4999 www.LegendaryHomeAuction.com info@LegendaryHomeAuction.com

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Sunbeam Overlook Breckenridge, Colorado The latest creation from celebrated double diamond homes. 4 sumptuous master suites, Chef’s dream entertaining kitchen with commanding ski area views. Soaring 3-sided stone fireplace. Heated courtyard serving 3-car garage. Extraordinary outdoorliving area with roaring fireplace, sunken hot tub and full grilling center. 4 berth bunk area with private dvds. Adjoins Carter Park with sledding hill, public tennis courts, bike trails. Offered at $3,269,000. MLS# S372811. www.sunbeamoverlook.com. Rob Neyland 970-390-1137 neyland@realtor.com

Gold Flake Breckenridge, Colorado This spectacular residence is perched on a prominent knoll overlooking the historic town of Breckenridge, the entire Breckenridge Ski resort and mountain ranges beyond. THE VIEWS are truly mesmerizing! And, the house is nearly a spa in itself! An in-ground resistance pool and hot tub, steam room and stairs, and plenty of space for your equipment allow you to train at 10,000 ft. above sea level. You’ll be super-fit for ANY sporting event! A gourmet’s kitchen has recently been upgraded with granite tops and stainless steel appliances and nicely accommodates informal gatherings. For more serious groups try the formal dining room with fireplace and stunning views. Six bedrooms, an office, and an upper level family room/theatre and giant three car garage complete the most fun-seeking house there is! $1,875,000. www.breckenridgedreamhome.com. Ron Shelton 970-5477728 ron@skicountryhomes.com

800-774-7970 • www.breckenridgeassociates.com

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Breckenridge Dream Home Breckenridge, Colorado Classic Colorado timber frame home combines centuries old construction techniques with modern day luxury. A comfortable, practical floor plan has a main level master suite and office just off the open living / dining/ kitchen.

This “great room” with two-sided fireplace and walls of south and west facing windows reap allday sun and mountain range views. Three more bedrooms and a nice big family room on the lower level may be ideal for family and friends.

Situated just minutes from downtown historic Breckenridge, shopping, dining and dozens of chairlifts! Now being offered. $1,395,000.

Ron Shelton • Broker, Partner Breckenridge Associates Real Estate 800-870-7392 • 970-547-7728 ron@skicountryhomes.com • www.skicountryhomes.com

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Colorado Classic Breckenridge, Colorado Magnificent panoramic views fill the windows of every room. This home is a timeless masterpiece and embodies every element of Colorado high country comfort. The log theme brings all the essential elements of nature inside! Native moss rock exteriors and finishes, sandstone and wood floors. Patina copper finishes accent the kitchen, fireplaces and stair. The floor plan flows comfortably from the open central great room to the more intimate spaces for TV, office, exercise. Perched across the valley from the ski area on 2.8 acres with never-ending views of the ski area and surrounding mountain ranges. Four complete suites allow for big parties, in addition to the stunning master suite on the main level where the his and her arrangements pamper and delight. $3,990,000.

Ron Shelton • Broker, Partner Breckenridge Associates Real Estate 800-870-7392 • 970-797-1978 ron@skicountryhomes.com • www.skicountryhomes.com

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V – 3 Ranch Breckenridge, Colorado This spectacular log home is situated on over 20 acres, just 5 minutes from World Class skiing and historic downtown Breckenridge. This kind of convenience and privacy is nearly a thing of the past in a resort community the caliber of Breckenridge! The Western Red Cedar logs with flared ends came from Canada and have been reassembled on this extremely rare lot near downtown Breckenridge with meticulous care and attention to every detail. The elements of the structure brought together are nearly more art than architecture. A gourmet kitchen with stainless steel appliances, solid granite counters and cherry cabinets, and the vaulted living area are brought together in this home and warmed by the moss rock fireplace creating the ideal Colorado atmosphere for regaling tales of the perfect powder run, the hike in the pristine forest or the climb to the top of the nearest 14,000 foot peak.

The vaulted, main-level master suite has a private balcony, a fireplace and generous five-piece bath. A resistance pool makes ready for a “no impact” efficient workout, a loft/office an ideal area for high-level conference calls and the state-of-the-art home theatre is a great place to end the busy day. Four bedrooms and a 3-car garage are just the beginning of what can be done here. The lot can easily accommodate additional living quarters, added garage space, a studio, a barn, you name it. Horses are allowed, and encouraged. What a fantastic way to see the Rocky Mountains! $2,990,000.

Ron Shelton • Broker, Partner Breckenridge Associates Real Estate 800-870-7392 • 970-797-1978 ron@skicountryhomes.com • www.skicountryhomes.com

Visit us online at w w w. Op e n C o u n t r y I n t e r n at i o n a l . c o m

Your Your Gateway Gateway to to Exceptional Exceptional Country Country Farm Farm Ranch Ranch Properties Properties Around Around the the World World

The Business of an Agricultural “Way of Life”

by Steven C. Blank

I

n an earlier Choices article, Blank (2002) argued that a majority of America’s farms and ranches are “hobby farms” that represent a lifestyle choice more than a commercial business. In answering the question “Is agriculture a ‘way of life’ or a business?”, Blank concluded that: Agriculture is both a way of life and a business. It is a way of life to, possibly, all participants, but it is a business to only some. Large-scale “commercial farms” clearly act like businesses.

Many of those farm operators may also view their business as a desirable way of life. On the other hand, “rural residence farms” are hobbies that operators must subsidize with earnings from off-farm sources.

This article takes the analysis a step further by posing a second explanation for why farmers are willing to subsidize their family farm. It abandons the naive view, often expressed by farm advocates, that rural residents are only in it for the lifestyle. That gross underestimate of farm owner-operators’ business savvy is replaced with a modern view of the big picture.

The Never-Ending Debates In agricultural policy debates, farm advocates have often used the “way of life” argument to support their claim that production agriculture in general and family farms in particular

need to be protected in various ways—such as subsidization through direct and indirect government payments. However, many things in agriculture are not what they seem. The net farm income totals reported by the United States Department of Agriculture (USDA) overstate the profitability of agricultural production while they understate the profitability of being a farm owneroperator.

The overstatement comes in the form of direct government transfers to agriculture that in some recent years have been nearly half the total net farm income reported by the USDA (2005). The understatement comes from the income data’s focus on only farm/ ranch production related activities, ignoring other sources of income. Of these two misrepresentations of American agriculture’s big picture, the understatement is far more important. It leads to the perception that an agricultural way of life is one of poverty for most farmers, thus providing a justification for government support.

However, if things down on the farm are so bad, why do farmers stay in agriculture, and why has the number of farms with annual sales of less than $10,000 increased since 1992, while total farm numbers continue to decline? As Blank noted, the reverse migration from cities to small farms observed over the past decade suggests that more Americans want to pursue a rural lifestyle (Deller, Tsai, Marcouiller, & English, 2001). But is that all there is to it?

Table 1. Average rates of return by region, 1960–2002.

ROA from current income

ROA from capital gains

Total ROA

SD of total ROA

Total ROE

SD of total ROE

Northeast

-0.03

2.56

2.54

3.65

2.24

4.38

Lake States

1.82

2.13

3.95

6.22

3.53

8.15

Corn Belt

3.13

1.06

4.18

7.83

3.86

9.57

Northern Plains

3.97

0.83

4.80

6.57

4.57

8.37

Appalachia

2.58

1.45

4.04

4.59

3.86

5.52

Southeast

5.50

1.92

7.42

4.48

7.90

5.50

Delta

4.62

-0.02

4.60

6.58

4.34

8.42

Southern Plains

1.87

0.71

2.58

4.92

2.27

5.88

Mountain

2.67

1.24

3.90

5.51

3.78

6.88

Pacific

5.41

0.97

6.39

4.95

6.84

6.57

AK & HI

2.93

1.92

4.85

5.26

4.92

5.80

US total

3.04

1.26

4.30

5.26

4.12

6.60

Note. ROA—return on assets; ROE—return on equity; SD—standard deviation of the time series.

Wealth is the Key A business has the objective of

specific portion of the market value of assets, referred to as the loan-tovalue ratio. Thus, some portion of

(at least part of ) their ownership costs. As an investment, farming has generated a positive return for Amer-

The debate over why farmers stay dates back many decades and is typified by Brewster’s (1961) hypothesis that farmers willingly accept lower returns than other investors because of the lifestyle benefits derived from farming. This view often leads to a mistaken interpretation of the fact that most farmers are part-timers. The misinterpretation usually made is that farmers seek off-farm income simply to enable them to pursue their lifestyle choice. However, a second possible explanation for why farmers stay is implied by the results of Blank, Erickson, Moss, and Nehring (2004), who found that farmers’ wealth comes from capital gains, not production income. This leads to the proposition that many owner-operators may be real estate investors using off-farm income to help them stay on the farm until they choose to capture their capital gains. This implies that farmers, like all investors, have a desire to build wealth, which is consistent with the view that owner-operators see agriculture as a business.

Wealth is the Key A business has the objective of increasing the wealth of owners. For most small and midsized farms, owners’ wealth is reduced by the production losses they incur most years, on average; thus, they are often labeled as “hobby farms” (Mishra, El-Osta, Morehart, Johnson, & Hopkins, 2002). However, if you understand the full definition of wealth, you know that production income is only one source.

Three types of income (or economic gains) contribute to wealth: profits from farm output, off-farm income, and capital gains on assets.

Total wealth (W) is usually expressed as equity at time t. Changes in wealth during a time period ending at t (ΔWt) equal farm income (FInc) plus off-farm income (OFInc) plus capital gains (ΔK) minus consumption (C), or ΔWt = FInct + OFInct + ΔKt – Ct. Capital gains are simply the change in value of a farmer’s capital from one period to the next: Kt – Kt-1. Capital gains are only realized if the asset is sold. However, lenders will usually loan a farmer up to some specific portion of the market value of assets, referred to as the loan-

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15 ROA, current income ROA, capital gain

10

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

0 1960

Percent returns

5

-5

-10

-15

Figure 1. US agriculture’s returns on assets, 1960–2002.

land values in their location (USDA, equals $6,777 in capital gains earned ues of other agricultural assets, but for unrealized the year by each of the 2,128,739 they have generated an some average return tovalue ratio.

Thus, portion of held by farm2000). households (USDA, 2000).

Finally, it should be clear that farms reported in the Census. The on those assets of 1.26% annually for capital gains can be immediately converted Therefore, the ROA from capital gains farm income must be augmented by actual capital gain rate reported for owners over the 1960–2002 period. into and used acquire other assets. reported in the off-farm secondincome column of Table to cover the cost1ofare 2002 was 3.18% (USDA, 2005), Thecash volatility of the twoto sources of In returns this regard, capital unrealized primarily from farm realmost estate. living for farm Agricultural households. which gives an estimate for average is apparent in Figuregains—even 1. What could all be real- of capital gains of $17,078 farm— areEven is also apparent is that improve returns froma farmer’s gains—immediately ability landperprices theif capital result gains of assessments ized by each both year, combining the longfive times as much as the aver- value gains and have been thanaid nearly to capital borrow, thushigher they in financing a parcel’s agricultural and run annual average of $6,777 in capiage amount of farm income per returns from current production a larger operation, which presumably will nonagricultural markets (Drozd & Johnson, tal gains with the low average earnhousehold. Therefore, capital gains income for most of the past decade. increase growthisinthe wealth.

2004;important Plantinga,ingsLubowski, & Stavins, 2002), from farm activities ($3,473 in are relatively much more What is the not apparent relative many of 2002) those out of gives factors an average are farm housein building farm and owner-operator scale of the contributions to owner only $10,250 per wealth, even though they control look rela- of hold are made by capital gains.

So,wealth howthatare agricultural producers doing in the the income farm ofowner.

Therefore, year—far below the poverty line for a tively minor when reported as in As it turns out, capital gains have generating income to build wealth? The 2002 farmland values vary much more than do family of four. Therefore, off-farm Table 1. In addition, the distribution increased owner-operators’ wealth Census of Agriculture (USDA, 2004) reports values income isagricultural a necessity for assets, most farm-but of capital gains isthe likely to be of other more than have farming profits, on that 53.3% of all farms generated a netmore lossheavily they have average return on ers. Is this an an indicator of poverty? weighted toward smallgenerated average, in many years.

For example, Apparently not. lifestyle farms (that those are more often of 1.26% 2002 the Census of Agriculture forinthe year, although the average household assets annually for Farmers owners are over doing betterThe than volatility the rest of us, closer to cities) to large comfound that thefarming estimated activities market earnings from for that year thanthe 1960–2002 period. of onthe average. The average off-farm earnmercial farms (that are usually farther value of farm real estate was $1.145 were $3,473 (USDA, 2005). Clearly, this amount two sources of returns is apparent in Figure ings of farm households in 2002 was from urban areas). In other words, it trillion dollars. Assuming that the is not sufficient to average supportrate a family—it doesthat notsmall1.farms What is also $62,285, apparent that farms returns from with islifestyle averagis expected are earnlong-run national of exceed household Thus, rates capital gains have been higher than ing much more than that and returns large ingcost. above-average of capital return from capital gainsconsumption of 1.26% farms averaging much less gain, thuswould improvingfrom owner-operator (shownon in Table was earned the relying this 1)source of onincome only current production income for(USDA, most of 2005).

Combining this figure with wealth wealth. faster for the lifestyle real in estate gives reductions a conservativeinestiresult annual household pastfarms decade.

What is not apparent is the the $3,473 average earnings from because of the “urban influence” on mate of $14.4 billion for capital gains relative scale of the contributions to owner farming activities gives a total income in agriculture for 2002. That total

So, why continue to farm? Although income from farming activities is low, on average, if it is still positive, it helps operators cover (at least part of) their ownership costs. As an investment, farming has generated a positive return for American farmers. The first column of Table 1 shows the average return on assets (ROA) received by producers in the different regions of the country, plus the average for the United States, over the 1960–2002 period.

It shows that over the long run, American agriculture has generated a 3.04% average return on assets used in production activities.

That provides some incentive to continue investing in the business.

What about capital gains? Farmland has historically represented about 75% of assets

wealth that are made by capital gains.

2nd Quarter 2005 • 20(2)

CHOICES

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As it turns out, capital gains have increased owner-operators’ wealth more than have farming profits, on average, in many years.

For example, in 2002 the Census of Agriculture found that the estimated market value of farm real estate was $1.145 trillion dollars. Assuming that the long-run national average rate of return from capital gains of 1.26% (shown in Table 1) was earned on the real estate gives a conservative estimate of $14.4 billion for capital gains in agriculture for 2002. That total equals $6,777 in capital gains earned for the year by each of the 2,128,739 farms reported in the Census. The actual capital gain rate reported for 2002 was 3.18% (USDA, 2005), which gives an estimate for average capital

• gains of $17,078 per farm—nearly five times as much as the average amount of farm income per household. Therefore, capital gains are relatively much more important in building farm owner-operator wealth, even though they look relatively minor when reported as in Table 1. In addition, the distribution of capital gains is likely to be weighted more heavily toward small lifestyle farms (that are more often closer to cities) than to large commercial farms (that are usually farther from urban areas). In other words, it is expected that small farms are earning above-average rates of capital gain, thus improving owner-operator wealth faster for lifestyle farms because of the “urban influence” on land values in their location (USDA, 2000).

Finally, it should be clear that farm income must be augmented by off-farm income to cover the cost of living for most farm households.

Even if capital gains could all be realized each year, combining the longrun annual average of $6,777 in capital gains with the low average earnings from farm activities ($3,473 in 2002) gives an average farm household income of only $10,250 per year—far below the poverty line for a family of four. Therefore, off-farm income is a necessity for most farmers. Is this an indicator of poverty?

Apparently not. Farmers are doing better than the rest of us, on average. The average offfarm earnings of farm households in 2002 was $62,285, with lifestyle farms averaging much more than that and large farms averaging much less (USDA, 2005). Combining this figure with the $3,473 average earnings from farming activities gives a total income of $65,757, which was 13.7% higher than the US average household income of $57,852 for that year.

This means that farm households may be building wealth faster than other Americans, on average.

So, who wants to argue that the agricultural “way of life” needs government subsidies?

A Growing Investment Agriculture is a way of life to rural residents, but it is a business to all its investors, including absentee owners. Large-scale farms clearly act like profit-maximizing businesses. On the other hand, most smaller farms are lifestyles that provide owners with deductions to write off against their taxable earnings from off-farm sources while gaining wealth in the form of capital gains. In other words, all farmers are pursuing both lifestyle and business goals. This

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can be more easily understood if we describe farm and ranch owner-operators as investors and wealth builders like all businesses.

an agricultural way of life. For these firms, the business motivating their rural way of life has little to do with real agriculture.

A business that builds wealth primarily from capital gains is an investment firm. In many cases, a farm is a passive investment that does not interfere with the owner’s ability to work off-farm. The Census shows that 54.8% of all farmers reported working off-farm at some time during 2002, with the share being higher for small farms and lower for large farms, as expected. Even more telling s that 39.1% of farmers reported working off-farm 200 days or more during the year. That is virtually fulltime employment! No wonder farmers earned more money per household off-farm during 2002 than the average American household earned in total. This indicates that farm owners are a talented group and are valued by the labor market, on average, more highly than average Americans are. Therefore, the business savvy of farmers should no longer be underestimated.

“Real” farms and ranches make a real effort to support their household on earnings from agricultural activities. This means making household labor allocations with the primary objective of producing agricultural output, rather than viewing agriculture as the residual market for excess labor in the household. When more household labor is allocated off the farm than is allocated to agricultural activities, the operation is primarily a real estate investment firm, not a farm.

Many farmers are smart investors who have taken “moving to the suburbs” one step further and have found wealth. The direction of causality in the migration from cities to small farms is unclear. Do rising rural real estate values cause the migration, or does migration raise farm real estate values? Or are both explanations working in a circular fashion?

Clearly, the answers vary across the country.

For example, the regional results in Table 1 show that farms in the Northeast and Lake States derive a majority of their longrun returns from capital gains, which have outperformed returns from agricultural production as an investment.

The reverse has been true in the Delta region.

Thus, the relative portions of “farms” in a region that might be called “investment firms” will differ across locations.

What is a “Farm”?

The discussion to this point has raised questions about whether all operations currently defined as “farms” by the American government truly deserve that label and the government support that comes with it. This article offers the proposition that many owner-operators may be real estate investors using off-farm income to help them stay on the farm until they choose to capture their capital gains. If this description fits an operation, it can be argued that the household is more accurately portrayed as an investment firm, even if they are enjoying

However, care must be taken when trying to distinguish between real farms and investment firms. Sometimes farmers act very much like investors in their business decisions, but they have very different motives. For example, it has often been observed that farmers reinvest most farm income into their operations. This raises the question: Do farmers reinvest out of economic necessity, or are they making investments in expanding their farms to increase their long-run wealth derived from increased capital gains? It might appear that any investment made with capital gains in mind indicates that the person is not a real farmer.

However, farm real estate investments play a very important role in the life of real farmers: providing current farmers with a retirement “nest egg.” With no other source of income, most real farmers need to capture their farmland capital gains to be able to retire from the business that has been their life. Ultimately, differences in the nature of investments made in a farm will indicate whether the household is operating like a real farm or an investment firm. A farmer makes investments that raise the value of the operation as a “working farm.” An investment firm makes investments that raise the real estate value of the operation. Some investments can raise both values.

Policy Implications Policies aimed at protecting an agricultural “way of life” are outdated and badly in need of replacement by programs that are based on an understanding of the true business objectives of those living in rural America. The country needs a modern definition of what constitutes a “farm” and an agricultural policy with differential treatment of farms across scale ranges with regard to policy benefits. Also, care must be taken in land-use policies so as not to hurt those people who have served the country as agricultural producers.

• At present, at least 53% of farms lose money each year, on average, and focus much of their attention and household labor off-farm.

This raises the question of whether those operations should be considered “farms” and receive agricultural policy benefits. It does not make good business sense for the country to have taxpayers subsidize these real estate investors. Yet current subsidies include income tax breaks and direct government payments to farm owners totaling billions of dollars each year. The fact that a lot of money goes to large farms and/or absentee owners adds fuel to the argument that much of agricultural policy is no longer accomplishing its original goals of providing an economic “safety net” for those people producing our country’s food supply.

Land-use policy now holds the future of American agriculture. The lifestyle-driven reverse migration from cities to rural areas has several economic impacts on American agriculture.

It creates demand for agricultural parcels that can be developed; thus, it increases the price of farmland in at least two ways (Drozd & Johnson, 2004). First, farmland with potential for development serves two markets (rural and urban) and is valued at its “highest and best use,” which is the urban value. Second, each time land leaves agriculture there is a new delineation of the urban fringe, thus causing an outward ripple in land prices reflecting the new pattern of development potential. This can raise the value of current farmers’ retirement “nest egg” but can also make it more difficult for new farmers to enter the profession. On the other hand, if land-use policy tries to keep land in agriculture through zoning (for example), it can hurt real farmers. Without the freedom to capture the development value of their farmland, many farmers will lose most of their expected retirement funds.

Thus, policy-makers need to understand the composition of real farmers’ wealth and the effects of any proposed legislation before undertaking a much-needed overhaul of agricultural programs. The country would be better served by investments in “real” farms, rather than in “lifestyle” operations housing real estate investment firms in rural locations.

Steven C. Blank is an extension economist in the Agricultural and Resource Economics Department of the University of California, Davis and a member of the Giannini Research Foundation.

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with values above the national average for both continuing west to the Missouri river. To the west, California has both high population density and high pasture land values.

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their resident state. The increase in the value of deer hunting is due directly to increased interest in and opportunities for hunting due to an explosion in deer numbers. A cultural shift to charging hunters and changes in liability laws also increased adoption of hunting as an alternative business enterprise. Also, many hunters are now more than one generation away from the farm and they no longer have access to family land. The increase in the popularity of deer hunting helps explain the increase in the value of pasture relative to cropland in Oklahoma.

Urban Conversion Options A 2003 NRI study noted that between 1997 and 2001, the rate of rangeland conversion to developed uses continued on an upward trend whereas the conversion of cropland had slowed. A 2007 NRI study reported that 40 million acres of land were newly developed between 1982 and 2007, representing a 56% increase, and accounting for more than one-third of all developed land in the lower 48 states. Rangeland with mature trees is often preferred for housing development.

Bottomland cropland often is in a flood zone and thus is less desirable for development.

Changes in population density, population growth, per capita income, and distance to urban areas often help explain changes in agricultural land prices over time. Agricultural land value studies have historically shown that population density increases land values.

Urban pressure increases all agricultural land values, but may be slightly more important for pasture than for cropland.

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if you hypothesize in an Extension meeting that much farmland was paid for with oil and gas royalty income. Royalty income affects both crop and pasture land values but where pasture is valued lower, the impact on pasture values will be larger in percentage terms.

• factors in the run-up of cropland prices does not directly apply to pasture. However, high corn and other feed ingredient prices increase the value of pasture for putting gain on cattle and this can be expected to continue while commodity prices are high. While demand for high end products slowed during the economic downturn, beef demand remained strong. Growing exports have also contributed to what are now record high beef prices. If world income continues to increase and with it, the demand for protein internationally, beef demand could increase, providing support for beef prices and pasture land values from an agricultural income perspective. Anecdotal evidence from agricultural lenders suggests that, during the national economic slowdown, the rate of growth in price increases for land purchased for recreational use slowed. Still, recreational use remains important and U.S. population continues to grow.

Tax policy and the related property tax assessments relative to agricultural land vary from state to state but often distinguish between cropland and noncropland. In Oklahoma, assessed values are a blend of market value and productive value, 25 and 75% respectively. Thus, the per acre taxes for pasture would be relatively lower than for cropland. In local areas, IRS Sec. 1031 like-kind exchanges for tax purposes can be important factors in land markets. For instance, when Wal-Mart’s world headquarters were established in northwest Arkansas, the urbanization of the surrounding area led to producers reinvesting proceeds from those sales in land in northeast Oklahoma.

Damona Doye (damona.doye@okstate.edu) is Sarkeys Distinguished Professor, Regents Professor and Extension Economist and B. Wade Brorsen (wade.brorsen@okstate.edu) is Jean & Patsy Neustadt Chair and Regents Professor. Both are in the Department of Agricultural Economics at Oklahoma State University, Stillwater, Oklahoma.

Doye, D. and R. Sahs. (2010). “OSU Rental Rate Survey.” Unpublished data.

Guiling, P., Doye, D., and Brorsen, B.W. (2009). Why has the price of pasture increased relative to the price of cropland? Journal of American Society of Farm Managers and Rural Appraisers, 73, 99-111.

Looking Ahead Peterson, W.faster (1986).

“Land Since 2005, pasture land values and rents in the central United States have grown than the nationalquality average and (Figure 5). Factors contributing to the increase include factors that have impacted cropland values, but also others.

As the prospects for forage-based biofuel crops prices.”

American Journal of Agricultural With the exception of Texas, pasture rent-to-value ratios in the plains states have been above the national average. appear limited in the near future, one of the key Economics 68(4), 812-819.

Other Factors Bankers note that oil and gas royalty income helps support land prices in the Plains States.

Anecdotal evidence in Oklahoma supports this notion as many heads will nod in agreement 4

In contrast to corn and soybean states, Oklahoma sales transaction data show pasture land average values exceed those of cropland (agecon.okstate.edu/oklandvalues). NRI data show that since 1987 Oklahoma cropland acreage

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