I am sure we have some small ranch operators. I am talking about ones on the Western half of the US as I am sure those on the eastern half have some of their own unique factors that do not relate to their western counterparts and visa versa.

I am going to post some things that will give the ranchers here an idea of some of the details.

I am talking about a ranch that is roughly 250 acres up to a couple thousand acres. A ranch house and possible a second residence. a Shop and some outbuildings, hay storage. Some corrals and pens and cattle associated equipment. I am thinking 50 up to maybe a couple hundred head. Depending on the size obviously. Significant grazing ground and also some hay ground.

I am not currently a rancher. Live rural and have ranches near by. Have been around ranching all my life but do not have hands on experience. Have a good family friend who does ranch. I will be discussing with him at some point.

My main questions are around buying a ranch and finding a local person or family to live on the ranch and mostly operate it. Me providing a home and machinery and equipment to adequately operate it. And being available to assist some with some short term planning so I can be there when necessary.
With me providing a home, utilities, meat on the table, possibly a vehicle. The Ranch would be mostly turnkey. So everything a family would need. How realistic is that?

Trust me, I do realize that getting ripped off is a possibility and one would need to address that prior to entering into any sort of an agreement of this sort.



My second question is: Could an operation like this make money? I am not talking about getting rich $. But making enough $ after taxes and expenses to make it worth while? Maybe help pay for a portion of it?

I understand ranching can be a tough cash flow business. Long periods of no cash flow (many months) in between and occasional payday.


The other option would be to lease the ranch to another rancher to run his cattle on it.



Just like a bit of first hand ranch feedback from the few here that have that experience.

I appreciate it. Thanks guys.

My cousins own a 22k acre ranch in SE Colorado. I worked on it many years during the summer. It was an amazing place to work and learn the thousands of things that needed work and attention. The skills required to keep everything running smoothly. You name it they fixed and repaired things constantly. Fencing, irrigating, spraying the cattle for flies and bugs.. the list is endless. But their was no better feeling at the end of day when you saw the fruits of your labors and accomplishments. I never saw the books, but they were never at a loss to provide for everyone, and frequently employed some seasonal help when workloads dictated. The prairie land was thin and it took 40 acres to feed one steer for the year. We also grew alfalfa and sorghum plants which required tons of extra work and care, used to fatten the steers prior to sale.

Just know that it will require a heavy investment of your time and capital for success, and thieves and predators are always lurking. But I would not trade my time working down there for anything. I am sure others will help with more specifics for ya.

This is a tough one, I am in south-central Montana and grew up on a small ranch and we leased additional acres (late 80’s and early 90’s). It always depended on the weather and cattle prices. Drought years were extremely tough, if you have to buy hay you will go broke in a hurry.
Currently there isn’t any acreage in Montana that will cash flow. Properties that can raise 250 cows are going to cost millions. Hiring a ranch manager/family will take most if not all of the profits. It was an incredible year for calf prices and ranchers are smiling. We are facing drought conditions again next year and they need to figure out how many cows their property can support. You need to have enough irrigated hay ground to feed your cows in the winter. When it hits 20 below (or colder) we were feeding 30-40lbs of hay per cow per day.
I am out of the ranching business, but lease access for my fishing business on 15 different properties. I get to hear about it constantly and commiserate as well.
I have several clients with “hobby” ranches. Historically it has been a great place to park money, they only made one Montana and the demand keeps going up. Depending on the size you could possibly make it break even or make a little. The play would be to hope for the continued rising value of real estate and cash out in 10-20 years.
The show “Yellowstone” hasn’t helped us either.
I do have my real estate license and can help point you in the right direction. Check out the listings on Fay Ranches, Hall & Hall and Swan real estate for an idea on pricing.
Come visit and enjoy! I can introduce you to 5 and 6 generation ranchers that will honestly tell you everything you need to know!
The tired old story about how I have a million dollars after ranching for several years is to start with 2 million is very true……….

The first obvious large hurdle to get started is $$$, lots. That’s how we end up with ‘hobby farms’, and ranches.

I’ve known a few that have the 10-50 acres, maybe more, then have a few critters or some land in cultivation. While doing this, the main source of income is from elsewhere, a regular job, or retired.

The most common entry point is with a little extra room one gets some laying hens. Sorry, maybe I’m not thinking big enough.

I think you’ll be hard pressed to break even unless you inherit the land and do the work yourself. In Texas a grazing lease pays enough to cover the property tax, which are reduced a lot by ag-use status. Hunting leases are the most lucrative.

quote:

Originally posted by arfmel:
I think you’ll be hard pressed to break even unless you inherit the land and do the work yourself. In Texas a grazing lease pays enough to cover the property tax, which are reduced a lot by ag-use status. Hunting leases are the most lucrative.

I'd guess/agree with this.

We have some land in S TX [our camphouse is 2 miles from the MX border]. No one lives on it, and we go for dove/deer season a couple times/year.
Owned by my grandmother, leased to a cattle rancher & has a couple active NG wells on it.
All of that pretty much covers the taxes on the land, to the best of my knowledge. I'm not involved in the financial side of any of it.

There is decent money to be made running cattle on leased land, as the yuppies need it to be in production to get the reduced property tax.

But, you still need a base of operations, a pool of labor, and a slaughter facility to make any decent amount of money.

How do you make a small fortune?…

Land, equipment, and labor costs…your grandkids might make a few bucks.

Even though I live in Western Kentucky,most of the base expenses are the same (tractor baler, rake, mower etc). I can tell you from experience, unless you own the land free and clear, you would be hard pressed to make a profit. The equipment I mentioned above alone is over 100K and that would be used. Cattle are high now but getting in, you’d have to buy high and the bottom could drop out tomorrow.

My CUT says it all.

quote:

Originally posted by TMats:
How do you make a small fortune?…

Start with a large fortune?

quote:

Originally posted by Kyjondeere:
Even though I live in Western Kentucky,most of the base expenses are the same (tractor baler, rake, mower etc). I can tell you from experience, unless you own the land free and clear, you would be hard pressed to make a profit. The equipment I mentioned above alone is over 100K and that would be used. Cattle are high now but getting in, you’d have to buy high and the bottom could drop out tomorrow.

Thanks and I agree with this. I already have some equipment that would be useful on a ranch. Tractor, mini ex. couple of trailers, etc.

One thing would be if you had a neighboring rancher that would do your hay/alfalfa field for a 2/3's 1/3 share crop and I had a small enough herd where I could make it through winter with a 1/3 share that would be a good option and doable from what I am hearing.

The thought would be to purchase the majority of the ranch (70%+) up front. Depending on size and cost.

quote:

Originally posted by P250UA5:

quote:

Originally posted by TMats:
How do you make a small fortune?…

Start with a large fortune?

and buy a ranch

I live on the ranch you are describing, and don’t run any cattle right now. Most of my land is in timber so I can’t feed enough cattle to do much more than break even, not enough economy of scale for such a small operation. I do enjoy raising hogs, so I do that, but it is not to make a profit. The cost of land is just too high to make anything you can buy now pencil. If you have the cash to spring for a big spread then have at it, it is a nice way to live for those that enjoy it.

When I first met my FIL I helped him manage the books on his 1500 acre farm in VA and raised about 400 head of black angus.

I don’t remember any specifics (it was 40+ years ago) but do remember that there are (were) significant tax benefits to this sort of operation. I think on paper we didn’t make any money but had cash..