Big Hat, Big Cattle. That is what every rancher is looking for and what every prospective rancher should know when looking to buy a cattle ranch. Like any business, your inputs and labor determine your profit and like any industry, there is a wide range of profitability. There are things you should look for when buying a cattle ranch. I’m going to talk about a few of them here for you.
All acreage is not equal. That is why most ranches will be able to quote AUM’s. AUM is what one 1000 lb cow will eat in a month. So, if you have a ranch that is rated 100 AUM’s in theory you should be able to have 100 cows. On some ranches 30 acres will feed a cow and on some with irrigated acres, it might take half that. Carrying capacity is what you are looking for to find what the ranch is rated for. Buyers can fudge these numbers to some degree but after very little time you can tell if someone is greatly exaggerating. Sellers also have to disclose that kind of information and are legally liable if they are not telling the truth.
While closely related to carrying capacity, you want to get a look at the condition of the range at the time of purchase. If it is vastly overgrazed, you may need to rest the property for a year or graze a reduced number of cows. Or you may find it hasn’t been grazed in years and you can put more cows on it the first year. Take a look at the fences. Are they in good shape?
Take a look for noxious weeds. These are non-native invasive weeds that can degrade your grazing. In many Western states, you are required to have a plan to control noxious weeds. All ranches have them. You will never be able to totally eradicate them, but you just want to make sure they have been controlled and you are not in for the expense of getting them under control.
Water rights are important things to understand when buying a cattle ranch. You need to understand the type, window of use, seniority and the date the right was established. Types of water rights are domestic, stock and irrigated. Irrigated can be sub, flood, or sprinklered. Sprinkler would be wheel line or pivot. The window of use is the time that you are able to use the water. For example, May 1-October 15 would be a good window. Water rights can be one of the most valuable facets of buying a cattle ranch.
A buyer needs to determine whether the property is year-round or seasonal. Is there enough grass that you can graze year-round or is it a property that you will have to feed a great deal or lease other property? Year-round properties w/o feeding depend on cutting enough hay for storage to feed in the winter. It means you are self-sufficient on your most important input. Look up and understand the annual precipitation and snowfall. It would be hard if you have too low of precipitation without irrigation or if you get 50” of snowfall a year.
A buyer also needs to look into the type of operation the ranch has been running. Cow/calf operation is a year-round proposition where you are breeding cows having the calves and feeding them out to the desired weight and then selling the calves to be processed. Feeder cattle is where you are taking weaned calves feeding them to the desired weight and then selling them. Under this situation, you are not really doing a year-round operation. There are also hybrid situations you can do as well but the point is known what the buyer has been doing and understand the reasoning behind it.
Know what leases the operation runs and whether they are private or public land. Will the lease transfer at sale? Not all do. If it is a public lease what are the requirements and window of grazing, number of head, requirements of the lessee and understands who will have what say.
If a private lease, talk to the lessor and understand the deal because there are all kinds of deals when it comes to private leases.
Buyers of cattle ranches also need to understand all easements and access for the cattle ranch. In the West, there are all kinds of odd easements and accesses across other people’s properties for varying reasons. A buyer just needs to know what they are getting themselves into as far as who has access or whether they have legal access or easement onto other properties, or someone has access or easement onto your property.
These are just a few things when buying a cattle ranch that you need to be aware of and is also the reason that you want someone that is knowledgeable to help you navigate what can be a very complicated transaction. If you are starting your journey, please feel free to reach out. We love to talk ranches and land and are ranchers ourselves.
Buzz Tatom is an Advisor/REALTOR® for Engel & Voelkers in Montana. He specializes in farms and ranches. A ranch owner himself he knows the complications that a buyer or seller will go through and is able to help navigate the complicated process. Give Buzz a call or fill out his contact form and put him to work finding you the right property so you can start building memories with friends and family!