This might be a stretch...any (bison) ranching experts?

Question

our partners in Colorado are considering investing in a bison ranch. We just started talking about it so we are still tossing around ideas, researching and by no means are experts in the area of ranching.

1. Does anyone have any experience in ranching/ willing to answer some questions?

2. We use a property evaluator app to run numbers for buy and hold properties, does anyone know if there is similar software to run numbers for a ranch?

3. What is a good resource for finding what permits, licenses or anything else we might need to raise/sell bison and potentially host guests or sell products?

Like I said, this is a stretch and still a pipe dream right now but if anyone has any input, please chime in!

Bill S. · Answer

Jennifer S. my family ranched for 4 generations. Mine is the first generation that does not have anyone ranching. The bottom line is this, there is no money in agriculture unless you are a huge business. It is at best a way of life. Ted Turner has made bison somewhat profitable by creating a demand for them via his restaurants but Ted is not a popular guy in ranching circles.

When I considered entering agriculture (ranching). The operation would "support" one family with about 1 million invested and another 1 million of debt. In other words, you had to either own the land free and clear or own the livestock free and clear. For that 1 million in equity, my father and step mother grossed about $120,000 in a given year. In the end that gave them about $30,000 of disposable income (IRR of about 3%) in a good year. I said no thank you and stuck with my engineering job and eventually moved into real estate.

If you owe more than half of your operation in debt you will go broke eventually unless you have an outside source of income. Most family size ranchers, have wives that work "town jobs" or have some other side enterprise.

The cost of land is prohibitive to start out. The lbs of beef/bison created by the acres of land in no way pays for the costs of operation and the debt service on the land. Bison are even more capital intensive because they require larger stronger fences and equipment and the breeding stock are more expensive as well. If you are rich they are a neat hobby but they will cost you money. Rich people like ranches because they enjoy visiting the countryside and the losses from the agriculture operations are a shelter from their taxable income via other sources.

That is my two cents.

Jay Hinrichs · Answer

@Bill S.  having lived in the CA wine country most of my life.. the exact same can be said for those with the romantic idea of becoming Vintners...

Hardscrable life... and in the prime Wine regions dominated by the rich.. IE retiring excs or Celebs.

I was working on a Ag play in Oregon.. and talked with AG farm lending.. they said let me get this straight your a RE developer and you want to grow Blueberries.. LOL

He said they only loan to life long ag families and principals with Degrees in AG.  Tough Tough business.

Bryan Drury · Answer

Jennifer S.summed it up well.Farming is definitely a way of life that people will sacrifice allot of blood ,sweat, and tears for.The monetary returns are very risky,low compared to a lot of other REI activities.People fall in love with the romantic side of the business,like the picturesque scenery,animal husbandry,challenges they have no idea about,producing your own food  for sale or your own consumption,ect.Just remember this,animal agriculture requires someone there 365 days a year.Either you or someone trusted or vested in the operation.There are lots of reasons why only about 2% of the population is directly involved in agriculture.You would be wise to explore those reasons and see if you can live with it.It can be a great way of life,but it is a hard life.How do I know this? My family and friends have been doing it for a long long time.Good luck to you and your choices

Nate Wightman · Answer

Hi Jennifer.. I know nothing about ranching but would think BillS advice is good wisdom... In life we can see poop in our left hand or compost in our right... I like to see the compost.  It sounds like you are looking for "a way of life"   then... how to make it work.  what if you started FortCollins compost where you get paid to pick up all the compost and turn it into soil... then get pigs?? what if you had a giant free range chicken farm?? a tiny house park.  or???  I hope you keep dreaming and have a most wonderful life.  laugh lots... get out of the box..

Jeff B. · Answer

@Bill S.  Excellent comment.  IMO, one needs to be born into this life to understand it, tolerate it, and to make money doing so.  For those not acquainted with farming and ranching, it's feast / famine, running on credit until the harvest or selling the herd,flock. There's an old saying, "I'm on God's good graces" and that's sure true of this life style.

"But I only want to  invest, not operate it" - - fine.  How can you tell a pig from a poke?

The family farm/ranch is almost dead and agribusiness has taken over.  Those still existing are choosing a life style, not a business opportunity.

Jennifer Slaughter · Answer

@Rebecca Zadell and Account Closed thank you for the honest and helpful feedback.

I wonder if it would be profitable to build on the land and use property like an Airbnb or resort destination?  One of the properties we are looking at has hunting access and I know people love to have an "experience" when they travel. I don't know what it would take to host people and essentially pay for the "lifestyle" of ranching. I can't imagine what insurance would cost. But the land is really picturesque, I'm thinking there has to be something we could do with it that would be profitable. Maybe? Maybe not?

Account Closed · Answer

The Colorado Department of Agriculture has a lot of great resources. To find ranchers to network with go to their marketplace portal: http://co.foodmarketmaker.com/

For reference here is the main site: https://www.colorado.gov/pacific/agmain/learn-abou...

CDA along with Colorado Proud host a variety of workshops throughout the year. https://www.colorado.gov/agmarkets/colorado-proud

Also check out the USDA and possibly the Colorado Restaurant Association.

Jay Hinrichs · Answer

Jennifer S.  we had a 1500 acre ranch in Upper lake.. my dad bought it in 1967.

He wanted to farm Walnuts... he ended up subdividing it off into ranchettes and realized there was far more money in developing land than farming it .. :)  I lived at Silverado for over a decade.. Love the Valley.. but it sure is not the same traffic now is a nightmare  especially getting through American Canyon.

good luck on your dreams.. !!!

Jacob Passmore · Answer

Jennifer S., Would it be possible to rent out the home for seasonal use? Hunters for fall, skiers for winter etc? The bison could be just extra income, main focus hospitality, side gig bison? Insurance wouldn't be as as bad as you would think, there are programs for guest ranches, hunting lodges etc. Depending on location/ size of tract there is some money to be made selling landowner deer/elk tags to hunters that would be worth considering! I like the idea!

David Faulkner · Answer

So true ... I have friends in the wine business, and they repeat the old saying ... "the way you make a small fortune in Wine is start with a large fortune and buy a Winery." Guess the same is true with Bison. The more boring and the less sexy something is, the more likely it seems it will be profitable, and visa versa. Not true 100% of the time, but good rule of thumb by my estimate.

This might be a stretch...any (bison) ranching experts?

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