Thoughts from the Road

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I recently spent a week in South Eastern Montana contributing to a series of two-day farm management workshops.  Workshop attendees likely came to learn something new, get a refresher on a topic that they might be a little rusty on or possibly as an excuse to get off the farm or ranch for a day or two.  Even as one of the presenters at the workshops, I expect to learn something new at each workshop.  I often get a chance to hear about local economic conditions, land prices, who has been buying land and other topics. 

A story that caught my attention on this recent trip was about a family farmer/rancher who retired a couple years ago.  This operation included a modest cattle operation (125 head) and about 1,500 acres of non-irrigated crop land.  The operation was sold in separate parcels to two neighbors.  In simple terms, one purchased the farm land and the other purchased the pasture land.  Neither buyer needed to add any extra workers or equipment to handle the increased size of their newly expanded operation.  The sellers relocated to the Billings area to be closer to their children and their families. 

What does this type of transaction mean to a community?  From an agricultural perspective, this likely improved the economic viability of the two expanded operations.  Based on the fact that neither buyer needed to hire labor indicates they both had the capacity in terms of labor supply to expand.  They did mention a custom combine crew was involved in harvest of the now expanded farming operation.  Both operations are likely more economically efficient producers after their expansion and their long term viability is probably improved.  It simply takes less people to get farm work done due to advances in technology (size and speed of equipment, shifts from mechanical to chemical fallow, etc.) than it did in the past.  A downside is that the community lost a family due the relocation of the retiring family.  For many communities in Montana this story has been fairly common (for decades) thus contributing to declining populations.  This is one less customer at the local grocery store, gas station, tire shop, café, etc.   Communities reliant on agricultural production for employment have been adjusting to this new equilibrium of agricultural operations requiring less workers.

In some of my other recent travels I have heard concerns about the buyers of land changing the makeup of the community.  I have heard concerns about properties be sold to out-of-state wealthy buyers for their amenities, expanding Hutterite colonies or groups with environmental or wildlife habitat goals.  Some locals often feel these groups are able to pay more for land than more traditional operators are willing to pay.  Interestingly, on this trip, I didn’t hear any mention of potential buyers from outside the community.   One rancher did inform me that “In all his years, he has never heard a land seller complain that land prices were too high or a buyer complain they were too low.”  I guess it is all about perspective.

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About Author

Joel Schumacher

Joel Schumacher, an extension economics associate specialist in the Department of Agricultural Economics and Economics at Montana State University. Much of his research has focused on understanding the economics and public policy implications of small and community scale alternative energy projects. Joel also researches and provides extension training in retirement planning, saving and investing. Helping Montanans stay up to date on the ever changing laws and regulations affecting consumer issues is an interesting and challenging area.

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