We Bought a Ranch! Now What?

Posted: Thursday, March 02, 2023

Author: Katie Salsbury, Co-Founder, Fisheries Scientist


How to Draft a Ranch Management Plan in Five Steps

You have spent years earning, planning, and shopping for a ranch, now that you own it, what should you do next? Your ranch dream may have been inspired by a family trip out west, a childhood cowboy fantasy, or a desire to invest in land, but no matter the motivation, the reality of owning a ranch can be overwhelming. Following these five steps will help you draft and implement a management plan that outlines where to start and what to do next. Following your plan will help ensure that you enjoy the journey of turning your ranching dream into a reality.

The dream…a “home on the range where the deer and the antelope play, where seldom is heard, a discouraging word and the skies are not cloudy all day.” Daniel E. Kelly

#1 - Take stock of what you have.

Like any new project, it’s best to start with what you know. Make a list of the ranch assets and their condition to identify the starting point of your management plan and help prioritize what needs to be addressed. This exercise will help you learn what you have and how the former owner referenced them. Many items on a ranch come with historical names that are best kept to avoid confusion. Take time to talk to the previous owner or manager to learn these names. It is also helpful to group the inventory into the following categories.

A stream flows through tall green grass near old, weathered wooden fences and a rustic cabin under a cloudy sky in a rural landscape.

LAND

Ranches often have a variety of land types that require different management strategies to thrive. Healthy forests need periodic disturbances, like fire, to regenerate and maintain diversity. Riparian and wetland areas are often affected by season-long grazing regimes and might need a rest. Range and grasslands can be susceptible to noxious weed invasions and may need to be checked for future outbreaks. List your land resources by type, acreage, condition, and any notable items about their management.

WATER

Water is the lifeblood of most ranches and should be prioritized. Ditches, sprinkler systems, and ponds all need routine maintenance to function well, and water rights must be used on an annual basis. Diversions and ditches are often located off the property and should be inspected to ensure that they are delivering the ranch water rights. Natural ponds, wetlands, rivers, and streams may have been impacted by historic land uses and in need of restoration to meet your goals. List the ranch water rights, man-made structures, and natural water features in your inventory.

INFRASTRUCTURE & EQUIPMENT

A ranch’s infrastructure is in constant need of maintenance. Gravel roads need grading, fences checked and fixed, buildings stained, heating systems inspected so that they will work all winter, and equipment serviced to ensure that it works when you need it. The elements and nature are continuously wearing on your ranch infrastructure and equipment. Staying on top of these tasks and budgeting for them will help you enjoy your time on the ranch and hopefully prevent any surprises. List these items with the year of their last routine maintenance so that those tasks can be scheduled and prioritized.

A large herd of black and brown cattle grazes on a green, grassy field under daylight, with some cows scattered and others grouped closer together. The landscape is open and natural.

RELATIONSHIPS

Ranches come with a whole host of existing relationships that have made it run smoothly in the past. – From fencing contractors, to grazing lessees, neighbors, electricians, and tractor repairmen, these men and women will be essential in helping manage your ranch. Ask the former owner or ranch manager to give you a list of all of their contacts and their role on the ranch. The former owner or manager are also a wealth of information of what should be prioritized in your management plan. Take time to learn what they loved most about the ranch, what they struggled with, and what they would fix.

ECONOMICS

All ranch properties have an economic history that is important to learn so that you can prepare for expenses and understand the income potential. If the ranching operation was set up like a small business, review the last 5 years of profit & loss statements, balance sheets, depreciation schedule and tax filings to understand its current value. If the ranch was run as an LLC and passed through to the owner’s taxes. Ask for an annual break down of the ranch income and expenses. It may be that the ranch doesn’t have an income source and, in that case, ask for a realistic budget of the past 5-years of annual expenses from the former owner.

A large herd of cattle grazes on a vast, green, grassy plain dotted with bushes and rolling hills under a blue sky with scattered clouds.

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LAND – Type, ranch name

Quantity

Condition

Notes

Forest – The wood, Anna’s Aspens

50 acres

Fair – Doug fir encroaching on aspen

Look into last time it burned

Riparian/wetland – The bog

80 acres

Poor – historic overgrazing

Restoration opportunity

Range/grassland – The upper

600 acres

Fair – some noxious weeds present

Annual weed control

Cultivated – The pivot, The hayfield, The 80

200 acres

Great – productive hay ground

WATER

Water rights

2.2 cfs

Ditches

Multiple

Fair

Need to be cleaned out

Pivots

1

Good

Replaced recently

Diversions

2

?

Need to inspect

Pond – The swimming hole

1

Poor – silted in

Double-check that the pond was permitted

Rivers

1,000 ft

Poor–eroding banks

Restoration opportunity

Streams

500 ft

?

Small spring

INFRASTRUCTURE & EQUIPMENT

Residences – “Main house”, “Ranch house”

1 main, 1 employee

Fair

Barns/sheds – “Big barn”, “Little barn”

2 barns, 2 sheds

Poor – appear to be falling down

Fences

?

Good – fences replaced in 2019

Need to measure and inspect

Equipment

Multiple

Fair

Make separate inventory sheet and depreciation schedule

RELATIONSHIPS

Caretakers

None – ask neighbors for suggestions

Lessees

Bar J – 208-787-2433; Tom Mack – 208-787-6939

Neighbors

USFS, BLM, George Black 208-354-7984, Mrs. Brown 208-354-6267

Contractors

Roads, ditches, earthwork – HJ Construction; Fences – KJ Fence; Pivot – Rain for Rent

ECONOMICS

Annual Profit & Loss

Average net - $50k; lessees pay $22/AUM

Fair

Seller maximized losses to reduce taxes

Liabilities

All equipment is mortgaged

Good

Assets

See depreciation schedule

Subsidies

NRCS grants, USDA - FSA subsidies

Taxes

Property taxes, sales tax exemptions



Aerial view of a green landscape featuring winding streams, dense clusters of shrubs, and open grassy fields, with a herd of cattle grazing in the bottom right section.

#2 - Get to know your neighbors.

Like anywhere, it’s best to be on good terms with the neighbors, and out in the country this is particularly helpful. If you are on good terms, they will pull you out of a ditch, lend you a piece of equipment, and give you a lift to town when you need it. More than likely, they have been working the land for a while and have learned a thing or two that they’d be happy to share over a cup of coffee. Neighbors are a wealth of information from where the cheapest gas is in town, to what commodities yield the best gains, and who to avoid when hiring a fencing contractor. Take time to get to know your neighbors and listen to their history and perspectives on the land.

Often in the west, the largest landholding neighbor will be the state or federal government. The professionals who manage these lands are usually happy and willing to share what they know about the area. Their perspective is often backed with data that has been collected over multiple years and can be particularly insightful when looking at trends your region. The US Forest Service (USFS), Bureau of Land Management (BLM), State Lands Division, or your local land trust, know a lot about your region, current land management challenges, and cost-share programs that you might be eligible for. Your local Natural Resource Conservation Service (NRCS) and state fish and wildlife biologists are also great resources to learn about agriculture, fish, and wildlife trends on your new property.

Make a list of the ranch neighbors, introduce yourself and ask them how you can be a good neighbor, land steward, and community member.

A lush green field with a simple wire fence stretches toward distant hills and mountains under a bright blue sky with scattered clouds.

#3 - Decide what’s important to you.

Whether it’s maximizing fish and wildlife habitat, recreation, conservation, or the agricultural values of the ranch, it’s best to decide what’s important to YOU, before outlining your management plan. This list will help define how to manage the ranch to maximize your values. Multiple values in ranch management are common and many are complementary to each other. It’s also important to prioritize your values so that you know what is most important when a compromise must be made.

Common Ranching Values

Sample prioritized list of values:

  1. Family retreat
  2. Fishing
  3. Hunting
  4. Historic preservation
  5. Balanced budget – income = expenses
Aerial view of a large herd of cattle grazing on a grassy plain near a wooded hillside, with a few people and vehicles visible among the animals.

#4 – Outline your management plan.

A good ranch management plan describes where you are starting from (Inventory), what you value (Values), where you’d like to get to (Goals), and how you’ll get there (Action Items). The simplest way to outline your management plan is to merge the ranch inventory with your values, then add goals and action items that address the immediate needs of the ranch.

SAMPLE – RANCH MANAGEMENT PLAN

Values

Goal

Action Items

LAND - Hunting, Ranching

Maximize wildlife habitat and recreation opportunities while supporting a sustainable ranching operation

Maintain forests for aspen regeneration; Control noxious weeds; Switch to a regenerative, yearling cattle operation

WATER – Fishing, Farming

Create fun fishing opportunities for the grandkids; maintain

Clean out the pond, order fish, get stocking permit

INFRASTRUCTURE - Historical buildings & architecture

Maintain historical buildings

Hire a design-build architectural team that specializes in preserving historical buildings

RELATIONSHIPS - Neighbors, the ranching community

Become an active member of the ranching community

Attend the annual summer picnic, help sponsor the rodeo, get to know the old-timers, and find out how you can contribute to a vibrant ranching community

ECONOMICS – Viable ranching operation

Ranching operation income exceeds its expenses

Analyze net income scenarios for an in-house vs. lessee cattle operation

#5 - Implement, monitor, adapt, and have fun

Once you have a plan, start implementing it. Ideally, some of the items in your plan will have measurable action items that you can monitor. As you implement the plan, monitor how you are doing, and assess and adapt to what is realistic and achievable based on your results. Ranch management plans are living documents that should be updated annually with input from the people who are doing the work on the ground. As you embark on this journey, like anything in life, take time to enjoy the process, the people, and the surprises along the way. Owning a ranch is a humbling and rewarding experience. Starting with a ranch management plan aligned with your values will help you develop a legacy that you can pass on.

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