Chipping away

As demand increases, ranch land falls to subdivision

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Fifty years ago, Alan White's longhaired Scottish Highlanders would have been as out of place in the Yampa Valley as he would have been.

White moved from Los Angeles to the Yampa Valley a few years ago, buying 145 acres as he eased into retirement from his job mediating large claims for insurance companies. In late June, a cow and two calves of the distinctive, shaggy breed arrived on his ranch, the first cattle he's owned.

From his new spread on Routt County Road 14, White has enjoyed views of Mount Werner and Walton Creek Canyon. He also has learned how to fix fence from neighboring ranchers, he learned about managing agricultural land from courses offered by the Routt County Extension Office, and he's kept asking for advice until he could put up his own hay -- all after age 55.

He had to learn to spot weeds, tinker with broken tractors and figure out what size of hay bales sell best at the community hay auction.

"I wanted to move here for retirement. I couldn't picture retiring in an urban setting," he said. White, in cowboy boots, jeans and a Yampa Valley Beef hat, also couldn't picture spending retirement playing golf and lunching with buddies.

Nowadays, White and his Scottish Highlanders, their horns and shaggy red coats standing out among the sleek and more highly demanded black-bodied cattle, are not so out of place.

"I suppose it's hobby ranching; I like to think I take it a little more seriously," White said. "I am just trying to keep the land in agriculture."

35-acre ranchettes

As land prices continue to escalate, traditional ranch families are faced with an almost unsolvable dilemma: They must expand to maintain profit margins, but they are unable to afford the land to do so.

Or when the land passes on to the next generation, the would-be successors cannot afford to buy it.

Many sell out, and the land changes hands to owners, such as White, who have little ranching experience. The new owners primarily buy the land for its views, open space and ranching history, not the agricultural return on investment.

Some new owners lease the land back to experienced ranchers, who use it for grazing cattle or hay production. Other new owners make a go at ranching themselves or try raising exotic animals such as yaks, llamas and Scottish Highlanders.

The 62-year-old White, who is five years into full-time retirement, does not depend on his ranch, once a piece of Vernon Summers' Centennial Ranch, for an income.

Like White, Harlan and Saundra Lear have chosen to raise exotic animals on their 40-acre ranch. Also like White, the retired couple does not depend on the ranch to make a living.

But after doing two years of research, the Lears decided the best way to make some kind of profit off their 40-acre property was to raise yaks. They wanted to keep their land in agriculture for tax purposes and raise livestock.

"It has to be something that sells for a high dollar," Saundra Lear said about their decision to raise yaks over the more traditional cattle, sheep or even buffalo.

Each long-haired, black-and-white yak in their herd of 20 has a name and can be petted easily. The Lears tame and train their calves, noting that each one has its distinct personality.

Once grown, the yaks are sold as pack animals. Some are harder to part with than others. Harlan refuses to sell one named Sugar, even though she has never birthed a calf.

The Lears worked in the Steamboat Springs School District for 40 years and built houses in the summer, enabling them to buy land in the South Valley 10 years ago.

Harlan grew up milking cows and working on irrigation ditches near Windsor. Saundra was born on a sheep ranch in the San Luis Valley. But many of their neighbors did not arrive on their 35-acre ranchettes quite so educated.

"We knew exactly what we were getting into. We knew how much work was involved. We see people come out and buy land, and then its 'What do we do with it?' They have no idea of the work," Saundra Lear said.

Busy with the yaks, haying 35 acres and keeping horses on the side, Harlan Lear marvels at the larger ranches.

"I don't know how they keep up with it. They work sun up to sun down, seven days a week. They have my respect and admiration," he said.

With a young, trained yak selling for $4,000 to $5,000, the animals pay for themselves and a few extras around the ranch, Saundra said, but not the expensive overhead of machinery or the price of the land.

Ranching for amenities

"Almost any sale you see in the last 20 years is to a recreation buyer," Steamboat real estate agent Dennis Kuntz said. "If it sells today, it is almost certain to be another recreation buyer."

A study from the University of Colorado's Center for the American West, which looked at changes in Routt County between 1990 and 2001, links hard numbers to that trend. The study, conducted by CU geography professor William Travis and Hannah Gosnell, found that in the past decade:

n 38 percent of large ranches and 41 percent of the land in large ranches changed hands in Routt County, which included 107 ranches that are 400 acres or larger and a total of 241,331 acres.

n At the start of the study, about 86 percent of agricultural land and 280 operations in Routt County were in large ranches.

n Of the land sold, 64 percent of the land in large ranches and 52 percent of ranching operations went to amenity buyers. About 86 percent of agricultural land and 280 operations in Routt County were in large ranches at the start of the study.

n Of those buying land, traditional ranchers purchased 7 percent, or 17,520 acres, and part-time ranchers accounted for 1 percent of land sold. Developers accounted for 7 percent of the acres sold, and investors purchased 11 percent. Combined, the two accounted for 43,518 of the acres purchased.

Routt County was one of three counties Travis studied and was picked because it represented the transition of agriculture land in a resort area moving from the traditional ranching use to amenity use, he said. He also looked at Sublette County in Wyoming and Carbon County in Montana.

"Routt County really allowed us to get right in the thick of things," Travis said. "We wanted a place that has gone through a lot, and you have been through a lot."

'A piece of the West'

Cindy and Joe Riggs came from New Jersey to Steamboat on a ski vacation and picked up a local real estate magazine. Once they started looking, they got hooked on the concept of a land-preservation subdivision.

Four years ago, the two bought a lot on Creek Ranch, which includes 40 10-acre lots and 1,400 acres of preserved open space.

The baby boomers only visit Routt County a few times a year, but they wanted a second home in an area that would lure their children to visit on the holidays.

"Everyone likes to get away from the hustle and bustle of the more metropolitan areas, especially New York. And all the activities here we enjoy," Joe Riggs said.

Roger Young, another home owner in Creek Ranch, lives there full time and came for the beauty of the valley and the recreational opportunities.

"First of all, we were Easterners," Young said. "We wanted to experience the Western lifestyle."

The Riggses and Young are typical of the rural land buyers who walk through Kuntz's doors at Exceptional Properties, he said.

"It's the John Wayne thing. Everyone wants to own a piece of the West," Kuntz said. "They come here to enjoy the property. Very few do the day-to-day, hands-on ranching work."

A nearby rancher grazes cattle and grows hay on the open land at the Creek Ranch, but the Riggses also can use the land for fishing, hiking, snowshoeing and horseback riding.

Just because they don't ranch doesn't mean they don't want to see open space preserved.

The Riggses think land-preservation subdivisions, in which developers cluster homes on lots smaller than the state-allowed 35-acre minimum for agricultural land in order to preserve larger chunks of open space, are the right way to go.

"It preserves the type of environment, the view and the lifestyle," Joe Riggs said.

About 50 percent of people who purchase ranches through Kuntz consider having conservation easements placed on their property, and about half that number follow through, he said.

"Second-home owners buy it with the intention of keeping it for their kids' generation to come. Whether that happens, who knows? But it seems to be the focus for a lot of these people," Kuntz said.

As ranch land changes hands and moves out of agricultural production, Travis said it could lead to instability.

In the past decade, more than 100,000 acres of land has been taken out of agriculture use in Routt County. The 1992 U.S. Census of Agriculture listed 576,397 acres in agriculture production. In 2002, it listed 450,239 acres.

Statistics also show that, in the same 10-year period, the number of ranches has increased by 35 percent, to 593, but their average size has dropped by 42 percent, from 1,316 acres to 759 acres. Half of all ranches in 2002 were 188 acres or less.

When times are tough, Travis said, those who buy the land for amenities could be more likely than a professional rancher to liquidate or subdivide it. He expects to see more turnover of ranch land in the future.

And once land is out of the traditional ranchers' hands, Travis said, it is unlikely to revert back to that kind of ownership.

"I don't think anyone can stop (the transition); I don't know if anyone wants to speed it up either," he said.

A blessing and a curse

The increasing cost of land can be a blessing and a curse, said Kuntz, who deals largely with large ranch sales and comes from a multi-generational ranching family.

The blessing is for those who decide to sell and move their operations to an area where land is cheaper; the per-acre price their Routt County land fetches usually allows them to expand in their new home.

The curse is for the next generation of ranchers who want to expand production but can't afford to buy the land needed to do so.

"Land values are so far beyond what ag can support, it's not possible to expand without taking on debt," Kuntz said.

In 1959, the average size of a ranch in Routt County was 1,633 acres, and the average value of a ranch was $59,729. The average price per acre was $37.80.

In 2002, the average value of a ranch was $1.5 million, and the average price per acre was $1,890. From 1992, the average price of a farm more than doubled and the average per-acre price more than tripled.

Routt County's prices are much higher than the average ranch in Colorado, which the 2002 census lists at $757,613. The average price of ranch land per acre in Colorado is $756.

Boulder County had the highest price per acre in the state at $7,639. The average price per ranch, which is 146 acres, was $1.16 million.

Moving away

Bill Baldwin, a longtime veterinarian, recalled that ranchers started selling their land and moving their operations elsewhere a few years after the Steamboat Ski Area opened in 1963.

"I estimate it started in the '60s, then picked up speed. I would say it is full-throttle now," Baldwin said.

It was in the mid-1980s when Baldwin and his son, Bill, realized that continuing to ranch in Routt County might not work.

"It's hard in a way, when you know. You can see the handwriting on the wall," Baldwin said. "You are not going to get anywhere here, doing what you do."

If the family wanted to continue to own the land, Baldwin said, they would have had to change their lifestyle, find jobs to support ranching, find other uses for the land besides ranching or sell off parcels for a development.

"I don't have that in me to fiddle with that," Baldwin said of the options.

So, like many of the other ranchers who have sold land in Routt County and moved elsewhere, his son got in his pickup to travel across the West to find a place to relocate. He looked in Utah, further into Western Colorado and in the Great Plains.

"You stop in towns, go to county extension agents, Realtors, ranchers and farmers," Baldwin said. "They price the land and try to see what is going to fit well."

In 1995 and 1996, the family sold its land to the adjacent landowner, took the money and purchased property near Scottsbluff, Neb. Four other former Routt County ranching families have since joined him. Others have moved to Oklahoma, Missouri, Wyoming and less expensive parts of Colorado.

Baldwin's son was able to expand his herd to 500 head of cattle. The cattle winter in Nebraska, feeding on corn stock, and return in the summer to the pastures Baldwin once owned.

Baldwin leases the land from the rancher.

As part of the sale to the neighbor, Baldwin and his wife have an agreement that they can stay in their little yellow house along Twentymile Road until they die.

They don't have the same kind of agreement for the 1,400 acres of land they lease.

"It gives him all ag (tax) status without a manager having to fuss with it," Baldwin said. "At this point, it's happiness on both sides. I don't know if it will go on forever."

A tenuous proposition

For those who remain on the land, the high prices can be good and bad, South Routt cattle rancher Dean Rossi said.

"It has given the rancher a huge base to borrow against," Rossi said.

Ranchers can borrow to cover the increasing cost of machinery but not to buy land to expand their herds.

"Unless you've got money stashed away, or sold something, or a rich aunt dies, you are not going to buy land out here and pay for it from ag production," Rossi said.

Land in South Routt County, where Rossi ranches, is squeezed in a development vice, with pressure coming from Steamboat to the north and from Eagle County, where few to no ranchers remain, to the south.

Regardless of how high the prices go, people continue to buy land, Rossi said from the back deck of his house, which looks out onto his property just outside of Phippsburg, with the winding Yampa River and the Flattops in the distance.

"It is just crazy how much it (costs), and people seem to have the money to buy it," he said.

Rossi and his brother, Jim, are the third generation to work their family ranch. They worked in the mines for years to acquire the money needed to buy the ranch from their father. Ranching is now a full-time job that also employs Jim's son.

The family has juggled to expand the operation without purchasing more land. They put a conservation easement on 600 acres that bordered four miles of the river.

They sold about 100 acres that did not fit into their larger land parcels and bought other land that did.

The biggest help in keeping the ranch viable, Rossi said, is the ability to lease land from the new owners, who want to keep it in agriculture for tax purposes and the scenery, but do not want the hassle of running a ranch or hiring a ranch manager.

That's a trend that Travis saw in his study.

"They purchased it mainly not for its agricultural production value. It's as simple as that," Travis said. "Does that mean they are going to chase the cows off? No. They'll mostly keep the cows on and maintain agriculture."

Rossi is not sure how his family would manage if they didn't have the extra land from the three ranches they lease.

"The big thing is it lets you expand, but that is a tenuous proposition because you never know three to five years from now," he said.

Rossi hopes the land will pass on to his children, who are active in 4-H and interested in ranching. The family gets sporadic solicitations from real estate agents asking if they want to sell their land.

It can be a tempting offer with the increasing government regulations, the harsh conditions of recent drought and as more nontraditional ranchers move into the area.

"Some days you wake up and think, 'What is the number of that Realtor?'" Rossi said.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com

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