Value of land - Cattle and mineral prices play into strong markets for production ag landWritten by Natasha Wheeler
Wyoming property is a valuable asset, and markets in the state are strong.
“From what I see, land values are holding their own,” notes Appraiser David Bartlett from Bartlett and Company in LaGrange.
Although other parts of the country may be reporting a decrease in prices, Bartlett isn’t seeing that trend in Wyoming.
“We are pretty strong in Wyoming, and it seems that demand for recreational land in Wyoming has continued. We had a slump between 2008 and mid-2012, but we are out of that slump now,” he says.
John Pearson, owner of Pearson Real Estate Co. in Buffalo, agrees.
“We see a lot of buyers back in the market today buying recreational lands. The market has improved dramatically,” comments Pearson.
Recreational lands are those used for activities such hunting and fishing or land purchased for its scenic value.
Discussing recreational land value, he says, “It was bad for about five years, but now the market is better.”
Agricultural lands are valuable as well, and Pearson classifies them into ranchlands and farmlands.
Farms and ranches
“There was quite a run-up of farm values in 2011 and 2012 because of commodity prices. Corn, soybeans and hay were selling quite high,” he explains.
Over the last year or so, grain prices have dropped quite a bit, especially for corn.
“Farmland prices have not increased. We are seeing where they have stabilized and, in some instances, gone down,” Pearson notes.
Ranchland, on the other hand, is not following the same trend.
“There is a renewed interest in grasslands with the way cattle prices have been,” remarks Bartlett.
In the last three years or so, Pearson has seen a steady increase in prices for range and grasslands.
“For ranchland from 2012 to the current time, we have seen a five to eight percent increase in appreciation,” he says.
Conditions in buying land
There are also buyers coming west from areas that have been experiencing harsh drought conditions.
“The other thing that has been happening in ranchland is more generational buying,” Pearson adds.
Ranchers who want to pass the agricultural lifestyle down to their children are buying property to expand their operations.
“There is a heightened interest in ranches, which makes it troublesome to buy a ranch, particularly for young producers,” Bartlett comments.
Pearson notes that agricultural families want to grow their operations so that their children will be able to make a living in the industry.
“We are really starting to see a lot more young people come back into agriculture. Ranchers are getting their children involved, and they are trying to expand,” he explains.
Pearson finds it encouraging to see interest from young farmers and ranchers who want to be involved and make a decent living in agriculture.
“People in Wyoming who want to buy a ranch are more production oriented,” adds Bartlett.
Much of the land investment in the state concerns productivity and sustainability.
“Most ag producers are looking for property that will produce, as far as weight gain, hay or corn production, etc.,” Pearson says.
Finding a balanced ranch is one of the biggest challenges that buyers face when they are investing in Wyoming ag land.
“It is a conundrum to find a balanced ranch where producers can run livestock year-round on a self-contained unit and where they don’t have to move cows far away or lease property,” he continues.
Property that has good hay and grazing year-round is hard to find.
“A good balance would have some irrigated land and plenty of good winter and summer pasture,” comments Pearson.
Buying and selling
Because many buyers in the state are looking for profitable acreage, Pearson advises buyers to investigate all of the production aspects of a property.
“It’s good to check out the water rights, soils, annual precipitation and those things that have to do with the production,” he comments.
Bartlett adds, “If there are water rights, it’s good if they have been used, so there are no questions about appropriation times or other issues.”
Agricultural property turnover is low in Wyoming, with trends indicating that people hold on to their land investments.
“Inventory in the state of Wyoming for good farms and ranches is fairly low,” Pearson states.
There are not a large number of properties up for sale, although Bartlett sees a different trend in ag land, compared to Pearson’s recent experience.
“I see a slight building of farm inventory, but not ranch inventory, for sale compared to two years ago,” he notes.
In either case, Wyoming’s strong economy is reflected in current land values.
“In the last 15 years in Wyoming, there has been a lot of money made in the oil, gas and coal business. There has been additional income with livestock prices being good, and interest rates are low,” Pearson explains.
These combined factors allow producers to hold on to their land.
“They are not willing to sell. They want to keep their property,” he says.
Owners who do want to sell Wyoming property have a strong market to their advantage.
“From a seller’s standpoint, the caution is to get good council on values and tax implications,” Pearson warns.
Being informed about mineral rights, state leases and BLM permits is also wise.
“Care of the property is always important,” Bartlett adds. “People like to see properties that have been well maintained, fences that have been kept up, prairie dogs that have been contained or eliminated, etc.”
Pearson notes, “It is a pretty good time to sell because the markets are good.”