The Ranch Post

This article is written by Jen Livsey, a Pasture Insurance Specialist for Texas AgFinance, about insuring your ranch  against drought. A graduate of the masters program at the King Ranch Institute for Ranch Management, Jen is an expert in all areas related to ranch management.

As drought continues to plague much of the United States, managing risk is top of mind for many owners and buyers of ranches.  Pasture, Forage, and Rangeland (PRF) Insurance allows livestock and hay producers to insure their owned or leased property against drought.  Often referred to as grass, rain, pasture, or drought insurance, PRF is a highly customizable product developed by the United States Department of Agriculture and sold by private agricultural insurance agents.  PRF pays when rainfall or vegetative conditions in a given area during a selected time period are below a selected percentage of historic average conditions.  PRF is customizable because a policy owner chooses which time periods to insure, how many acres they want to insure, what type (hay or pasture) of land they want to insure, and what percentage of average historic conditions they want to insure.   These decisions and the geographic location determine the price of this insurance.

Two measurement systems, or indices, are used in the Western States (see map).  In Rainfall Index states like Montana, the Dakotas, Texas, and most of Colorado, rainfall amounts for 12 x 12 mile grids are determined by the National Oceanic and Atmospheric Administration (NOAA) for 2-month intervals.  In Vegetative Index states like New Mexico, Wyoming, Utah, and the western slope of Colorado, the United State Geological Survey (USGS) uses satellite imagery of 4.8 x 4.8 mile grids to measure plant growth over 3-month intervals.  Neither index requires a policy holder to keep any records.  Both indices express conditions as a percentage of historic average conditions.  For instance, take a grid in Nebraska; if the number for January-February comes in at .568, NOAA has determined that grid received 56.8% of the precipitation it normally receives in January-February, based on records from 1948-present.

Prices and program rules are set by the Department of Agriculture, which means that service and analysis is what sets agents apart.  A thorough analysis of a grid’s rainfall or vegetative history and variability, coupled with pricing data and a discussion about goals, budgets, and risk tolerance leads to the optimal policy for any given property.  Not every agency has developed the software capable of this analysis.  Jen Livsey, an agent with Texas AgFinance, used their software program to help nearly 150 policies realize an average 184% return on premium in 2012 (a 100% return = $2 paid out for every $1 of premium paid).  If you are interested in learning more about PRF or would like a quote for your property, Jen can be reached at jen.livsey@texasagfinance.com or 719-659-2494.

Ranch broker Ed Roberson offers a brief overview of the current status of the Farm Bill and its effect on conservation properties in this blog entry.  In future posts, we will be addressing some of the more detailed aspects of the bill such as habitat enhancements, range improvements, etc.

If you’ve been following the recent news regarding the federal budget negotiations, the fiscal cliff, and their effects on conservation properties for sale, you’ve most likely heard a good bit of chatter about the Farm Bill.  On a most basic level, the Farm Bill is the far-reaching policy tool of the US government that directs federal spending in all aspects of agriculture in the United States.  The 2008 Farm Bill approved over $300 billion in spending on everything from agricultural subsidies to crop insurance, from food stamps to land conservation.

Farm Bill History – Franklin D. Roosevelt created the Farm Bill in 1933, during the depths of the Great Depression, as a tool to stimulate the commodity markets.  The original version of the Farm Bill paid farmers to cease production of seven specific commodity crops with the goal of decreasing the supply, increasing the demand, and ultimately raising commodity prices.  (To learn more about the challenges faced by farmers and ranchers during this time period, I highly recommend The Worst Hard Time by Timothy Egan – an informative and compelling narrative of the Dust Bowl of the 1930s.)  Since that time, the Farm Bill has morphed into a much broader policy tool, affecting almost every aspect of agriculture in the United States.

Current Farm Bill Battles – The Farm Bill is generally renegotiated and renewed approximately every five years, and a new bill was due to be passed in the fall of 2012.  This past summer, Congress began to move forward with a draft version of the bill.  Amazingly, the bill was viewed as a bipartisan effort, and was applauded by leaders on both sides of the aisle.  From a land conservation perspective, all of the major mainstream conservation organizations publicly endorsed the bill and were pleased (and somewhat surprised) that the bill included increased federal funding for purchasing conservation easements on agricultural land.

In July, the bill passed the Senate, was then presented to the House Agricultural Committee, and was easily approved with a vote of 35-11.  At this point, it seemed that the bill was poised to pass the House of Representatives without much of a problem…  And that’s when the wheels fell off!

Thanks to partisan posturing due in part to the impending fiscal cliff debates, the bill was never presented to the House for a vote.  It sat in the black hole of congressional bureaucracy through the summer and fall, even as the 2008 Farm Bill officially expired.  Eventually, on January 1^st, 2013, Congress passed an extension of the 2008 Farm Bill, which was widely viewed as a lame example of “kicking the can down the road.”

So where do things stand now?  It is uncertain.  The current extension will be in effect until September of 2013, at which point it will expire.  Between now and then, Congress will need to renegotiate the bill and hopefully pass a version that receives the same level of bipartisan support as last summer’s version.  From a land conservation perspective, this current extension is not at all favorable – it has resulted in losing over $500 million in baseline funding for conservation easements over the next 10 years.

However, as we try to look on the bright side, the upcoming negotiations of this new Farm Bill present an excellent opportunity for Congress to draft and pass a Farm Bill that will be equally favorable as last year’s unpassed version.  Hopefully, with the Fiscal Cliff fights and the Presidential election behind us, 2013 will be a year that Congress can work together to create impactful, meaningful, and viable policies for agriculture and conservation.

For more information and updates on Farm Bill Negotiations, check out the following links:

• Land Trust Alliance – Farm Bill Policy
• American Farmland Trust – Farm Bill Updates

Be sure to keep checking the Mirr Ranch Group blog for more updates on the Farm Bill and its impact on conservation properties.

As the 107th National Western Stock Show closed out another year yesterday, we like to look back on this year’s stock show and how it supports Colorado ranches for sale and Wyoming ranches for sale.

Mirr Ranch Group was proud to be a patron sponsor for the 2013 Annual Coors Western Art Show and Sale at this year’s Stock Show. The money raised from the art show benefits the National Western Scholarship Trust, which awards scholarships to young adults in Wyoming and Colorado pursuing a college education in Agricultural Science. To the right, see Mirr Ranch Group owner and ranch broker, Ken Mirr, with his daughters, Haley and Hannah, at the Red Carpet Reception for the art show.

If you missed the Stock Show or the Coors Western Art Show and Sale this year, remember to check it out next year, and support the next generation of ranchers in Colorado and Wyoming. Colorado ranches for sale and Wyoming ranches for sale are counting on these future ranchers to keep ranches as ranches.

Now that the dust has finally settled from the much-publicized “Fiscal Cliff” battle, landowners and ranch buyers can begin to understand the implications that the resulting legislation will have on ranch ownership and their conservation properties for sale.  While the effects of the deal are far-reaching and affect many aspects of owning and operating a western ranch, one of the most frequent questions we have received from buyers and landowners is: How does this Fiscal Cliff deal affect charitable deductions for conservation easements?

The Basics: The Fiscal Cliff deal that was passed on January 2, 2013 successfully renewed the “enhanced income tax deduction” for conservation easements.  Under this legislation, a landowner who donates a conservation easement can deduct up to 50% of his or her adjusted gross income, or, if the donors are qualified ranchers or farmers, they may deduct 100% of their income.  In either case, if the total value of their deduction is greater than their adjusted gross income, they will be allowed a “carry-forward period” to continue taking the deductions for up to 15 years into the future.

An Example: In 2013, if a landowner with an income of $100,000 donates a conservation easement valued at $500,000, she may deduct $50,000 from her 2013 income.  Assuming her income remains constant over the coming years, she may continue deducting $50,000 per year for the following 9 years, until she has realized the full value of her donation: 10 years of deductions x $50,000 per year = $500,000 Total Federal Tax Deduction.

Additional Information: So what defines a landowner as a “qualified” rancher or farmer, allowing him or her to deduct 100% of the adjusted gross income? As with all things related to the federal government, it can become convoluted and confusing, but, basically, a landowner who receives 50% of his or her income from ranching or farming is considered “qualified.” Internal Revenue Code Provision 2032A(e)(5) describes in detail exactly which activities constitute farming or ranching.  With this, and all other matters related to federal income tax, it is important to always consult with a Certified Public Accountant.

Another important note is that the tax incentives mentioned above are for landowners who donate conservation easements or other partial-interests in land.  These deductions do not apply to those donors who give a gift of undivided interest in their land (fee simple) to a charitable organization.  Donors who choose to simply give away their land will only be allowed to deduct 30% of their gross adjusted income with a maximum 5-year carryover.  Therefore, if the donor’s goal is to help conserve land while simultaneously enjoying maximum tax benefits, a conservation easement may be the most effective method to accomplish both goals.

Resources:  The Land Trust Alliance, the national representative of more than 1,700 land trusts throughout the United States, is an excellent source of information on the current Fiscal Cliff deal, as well as all matters related to land conservation.  For more information on how Fiscal Cliff legislation will affect land conservation, check out the following resources from LTA:

• Conservation and the Fiscal Cliff Deal
• 20 Questions: Conservation and the Fiscal Cliff Deal
• Frequently Asked Questions About the Enhanced Easement Incentive
• Land Trust Alliance Policy Program

Mirr Ranch Group Conservation Expertise: This blog was written by ranch broker Ed Roberson. Ed and Mirr Ranch Group owner/broker, Ken Mirr, have extensive experience with ranches for sale that offer conservation values.

Since moving to the Rockies in 2005, Ed’s personal passion for responsible land stewardship and his deep professional knowledge of ranch brokerage have allowed him to successfully broker the sale of recreational, conservation, and legacy ranches throughout Colorado, Wyoming, Montana, and Idaho. Ed offers years of experience in the real estate and finance sectors, an MBA from Wake Forest University, and an impressive record of mountaineering, having climbed some of the highest mountains in the world.

Ken began his career as a public lands attorney who assisted ranchers, conservation groups, natural resources companies, ski areas, telecommunication companies and others in handling specialized land transactions with State and Federal land agencies throughout the Rocky Mountain region. In 2005, he founded Mirr Ranch Group, a ranch real estate brokerage specializing in legacy and sporting properties with conservation values. Over his career, he has brokered open space and land conservation transactions and consulted on conservation easements, exchanges, grazing issues and special use permits. Ken was recently President of the Board for the Colorado Coalition of Land Trusts,  an organization dedicated to promoting high-quality land preservation on behalf of its member land trusts and open space programs in Colorado.

With this depth of experience, Mirr Ranch Group is the go-to source for information on the ever-changing climate of conservation easements and conservation properties for sale.

Mirr Ranch Group is pleased to announce the sale of the Barela Mesa Ranch, an addition to our portfolio of sold hunting properties. The Barela Mesa Ranch story is a great testament to how the 60+ years collective experience hunting and outfitting throughout the Rocky Mountain West truly sets apart ranch brokers Jeff Hubbard and Pat Lancaster when it comes to nosing out exceptional sporting properties for ranch buyers.

This 2,300 acre Las Animas County Colorado property is a wildlife haven. The gently sloping ponderosa and gambel oak glades, and small grassy meadows with multiple seeps and springs, create an ideal habitat for the numerous elk, deer, bears and turkeys.

As Hubbard explains,

The long history and many years of testing out, either through our own outfitting enterprises or for personal use, seemingly every corner of the West, has yielded an unrivaled wealth of knowledge when it comes to hunting properties. Indeed this 2,300 acre property and adjacent properties have been leased by our team for many years.

Barela Mesa Ranch is a gem of a hunting property. Over the years our team and our clients have harvested many 350″+ bulls and 200″+ bucks on this property. Moreover, the ranch is loaded with turkeys and bears.  This is just one of those special properties where there is an abundance of trophy-quality game.  Such properties are not easy to ferret out.  Many buyers are overwhelmed by the endless landscape of ranches that are teeming with elk and deer.  Buyers grow weary of marketing materials full of sweeping generalizations such as “hunters paradise!” In spite of the magnificent vast scale of our intermountain west, there just are not many places which are of extraordinary quality to the seasoned hunter. And many of the best, like Barela and Moonshine Ranch, a Hubbard/Lancaster off-market transaction in July 2012, never hit the market. To the extent that they do exist, we know where they are.

The Barela Mesa Ranch transaction is one we are very proud of.  The buyer was very pleased with the deal and is super enthusiastic about owning and enjoying this extraordinary property.  It is especially gratifying to have been able to put together an off-market deal that simply never would have happened with any other broker.

Mirr Ranch Group represented the buyer, and as noted, the property was not on the market. Congrats to Jeff and Pat on another one of their sold hunting properties!

Denver, Colo. [December 13, 2012] – The Mantle Ranch, surrounded by the 225,000-acre Dinosaur National Monument, was sold by listing brokerage, Mirr Ranch Group of Denver, Colo. on Monday. The sold ranch was considered to be one of the top National Park Service (NPS) inholdings in Colorado and was purchased by a private party.

This comes after speculation that the NPS or a conservation group would purchase the land. As noted in a recent Wall Street Journal article, federal land managers would like to acquire this tract and other national park inholdings. However, even though there is an increase in buyers who want to develop on these tracts, federal funding for such inholdings has decreased significantly over the last several years.

As listing ranch broker, Ken Mirr explains, “We had a number of different potential buyers and groups interested in the land and all of whom, in our minds, were conservation-minded. When it came down to it, we had a private buyer who was passionate about the land, understood the responsibilities of owning such an iconic property, and who was eager to close.  Like the Mantles and Carollos before them, the new owners will be great stewards of the land.”

Local conservation and agricultural groups are pleased the ranching history of the property will continue.

“It’s exciting to see a new owner who will continue the ranching legacy and honor the history of the Mantle Ranch. Ranching is an integral part of the area’s history past and continues to be an important economic driver. I hope that the grazing uses will be seen as a benefit to the Park and its visitors in the years to come as well,” commented Executive Director of Colorado Cattlemen’s Agricultural Land Trust, Chris West.

Featured in John Fielder’s 2009 book, Ranches of Colorado, the Mantle Ranch offers 525 deeded acres set within the Yampa River Canyon beneath Castle Rock. The ranch is complemented by an approximately 30,000 acre federal grazing right that runs some 17 miles east/west and six to seven miles north/south along the Yampa River and the surrounding Yampa Bench.

“Mantle Ranch is an ecological, cultural and geological jewel located in a beautiful and serene river corridor with thousand foot high yellow and red sandstone canyon walls carved by the wild and free flowing Yampa River. The land is secluded, historic and replete with recreational and cultural resources such as petroglyphs, and other ancient Native American art, fossils, trophy elk and mule deer hunting, and white water adventures,” added Mirr.

In addition to the NPS, a number of conservation organizations were interested in the property due to its location within the Monument, federal grazing right, water rights, cultural and wildlife resources, and history.

“We enjoyed working with all of these groups and appreciate their commitment and efforts towards protecting these important landscapes. The recent cuts to the Land and Water Conservation Fund (LWCF) for these types of projects certainly impacted their ability to purchase the ranch and compete with private buyers,” said Mirr about the outcome of the sold ranch.

Ranch broker and hunting properties specialist Jeff Hubbard harvested this California Bighorn Ram earlier this month in the Newfoundland Mountains of northwest Utah. Jeff was lucky enough to draw this extraordinary tag at the 2012 Western Hunting and Conservation Expo in Salt Lake City, Utah.

The Western Hunting & Conservation Expo combines the very best in hunting expositions with a joint national convention between two major North American wildlife conservation organizations: the Mule Deer Foundation (MDF), and Sportsmen for Fish & Wildlife (SFW). In 2012, over $3 million was raised in auctions held as part of special banquet and celebration events at the Hunting Expo. 90 percent of the money raised at auction is dedicated to wildlife conservation and habitat projects run by SFW volunteers working with state fish and game agencies, an initiative Jeff fully supports and has benefited immeasurably from.

Hubbard and his partner, Pat Lancaster, are the hunting experts at Mirr Ranch Group. Jeff has an extensive background in hunting and real estate, while Pat is the owner of the highly regarded Lancaster’s Outfitters, which has operated in Colorado, New Mexico, and Nebraska for over 25 years. Both brokers naturally possess a unique eye for evaluating hunting-oriented property, and have brokered the purchase and sale of thousands of acres of land in the American West. Check out the Elk Song Ranch, as well as the sold ranches, Fishlake Ranch and Thunder Ranch, for examples of the high caliber hunting properties they represent.

Jeff killed this beautiful 10-year-old ram on his fourth day of hunting, and was very gratified to have completed the hunt on his own. Congratulations Jeff!

Ranch broker Ed Roberson, and author of ranch and conservation blog, Mountain and Prairie, explains his experiences with conservation properties and conservation easements. In this case study, he specifically uses Colorado ranch for sale, The Preserve, as an example of a beneficial conservation easement. 

Since first entering the ranch brokerage business in 2005, I have had the good fortune to work on many deals involving conservation properties – ranches and tracts of land that have either been conserved with a conservation easement or have attributes that make them excellent candidates for conservation.  Large tracts of unspoiled land, combined with a deep-seated landowner ethic of respect for the land, make the Rocky Mountain region one of the most creative and cutting-edge regions for land conservation in the United States.

We are currently in the midst of a very exciting time in the history of land conservation, particularly in the Rocky Mountain West.  Landowners, non-profit land trusts, government agencies, and innovative entrepreneurs are working together to create solutions that simultaneously conserve land, preserve traditional western ranching and agriculture practices, and create opportunities for investors to reap healthy profits.

One of our current listings, The Preserve, is a perfect example.  The entire ranch is 7,859 acres, with approximately 3,500 acres protected by a conservation easement held by Colorado Open Lands.  Prior to Colorado Open Lands conservation efforts, the ranch had been overgrazed to the point that the grass was not growing to its full capacity, carrying capacity suffered, and the banks of the Middle Fork of the South Platte had been trampled down, ruining what had been productive spawning grounds for brown trout.

As part of the conservation easement, Colorado Open Lands implemented a responsible and sustainable grazing plan, which allows for the owner of the ranch to continue grazing cattle on the property, just as it has been done since the area was first settled in the 1870s.  This grazing plan and easement will have no negative effect on cattle production; if anything, it will be better for the cattle in the long run because the land will produce more healthy grass, year after year.

Thanks to the sustainable grazing plan, the sub-irrigated meadows along the river were green and lush this summer, despite the fact that 2012 was one of the driest summers on record.  Also, the Middle Fork of the South Platte, which bisects the conservation easement, has been returned to its natural state as a productive fishery and spawning grounds for 30-inch trophy brown trout.

But what about development potential?  What if a potential buyer wanted the option of developing a portion of the ranch?  Well, the remaining 4,300 acres of the Preserve is completely unencumbered by the conservation easement.  In fact, it has been pre-approved by Park County, Colorado as a Planned Unit Development (“PUD”), which allows for numerous homesites throughout the property.

The Preserve’s combination of conservation, sustainable agriculture, and responsible development potential is a perfect example of how conservation easements can be used to create mutually beneficial solutions that benefit the landowners, the community, ranching heritage, and our western landscapes.  While conservation easements may not be the perfect solution 100% of the time, in this particular case, it is a win-win-win for all parties involved.

Conservation properties for sale are tracts of land on the market that have conservation values. These types of properties often utilize a conservation easement. In this blog, we will define a conservation easement, and explain its impact on Colorado land.

A conservation easement is a deed restriction arranged with and held in trust by an IRS-qualifying not-for-profit group or agency that limits some or all development on a property. In exchange for giving up these development rights, landowners can receive financial benefits such as federal income tax breaks, real estate tax reductions, estate tax benefits, and tax credits in Colorado. Well-crafted easements are typically flexible, allowing various continued land uses for a wide variety of landowners and do not require public access. Conservation easements are generally donated, however, on rare occasions they can be sold outright.

These easements are the primary land preservation tool in Colorado, accounting for more than two-thirds of all conserved land in the state, which amounts to over a million and a half acres of land. There are over three thousand conservation easements around Colorado that have protected farms, ranchlands, scenic and historic areas, wildlife habitat, and unique natural areas that otherwise could have been lost forever.

The program has been quite successful for Colorado land. In fact, a report from The Trust for Public Land describes the economic impact from Colorado’s land conservation programs. For every $1 invested by the state, including through the Conservation Easement Tax Credit and the Great Outdoors Colorado Trust Fund, the state received $6 in benefits.

According to the Colorado Coalition of Land Trusts, land conservation is critical to support Colorado’s economy and quality of life. Some of our state’s largest economic industries, including agriculture, tourism, and outdoor recreation, are all connected to conserving our working ranchlands, our scenic vistas, and our recreational opportunities.

The program has been reformed over the years, but as former President of the Board for the Colorado Coalition of Land Trusts and ranch broker, Ken Mirr, explains, “The tax credit program is incredibly successful and the program has only been reformed over the years to ensure fiscal responsibility.”

Some interesting fast facts about conservation easements:

• 107 easements were donated in 2011, totaling 52,830 acres. This utilized all $22 million of the cap and also took up several million of the 2012 credits.
• Currently, 42 organizations are certified by the State.
• The $22 million cap for 2012 tax credits has been reached and the waitlist for 2013 credits has started.

Contact Mirr Ranch Group if you have any questions about conservation easements, how it may work for conservation properties for sale, and if it’s right for your situation.

On CBS This Morning, there was recently a great segment on land for sale within our US national parks. Mirr Ranch Group specializes in such properties, and currently has the following ranches for sale within these boundaries:

• Mantle Ranch, an inholding in Dinosaur National Monument in Dinosaur, Colorado,
• And Trees Ranch, which is surrounded by Zion National Park and public land in Springdale, Utah, and is essentially an extension of the park.

When it comes to our listings, Mirr Ranch Group works diligently across many areas and possible solutions to protect our landscapes, as well as ensure our clients’ interests are represented well.

Ranch broker Ken Mirr further explains, “As a public lands attorney and broker of conservation properties, I have been involved with inholdings and uniquely situated properties for the past twenty years. While public land ownership of these properties is one solution, public funding has decreased and we need to continue to find private solutions to these situations working with conservation buyers and impact investment funds to assure good stewardship and long term protection.”

In addition to Ken’s career as a public lands attorney and ranch broker, and unsurpassed in conservation experience in the ranch real estate industry, he just completed four years as President of the Board of the Colorado Coalition of Land Trusts, an organization dedicated to promoting high-quality land preservation on behalf of its member land trusts and open space programs in Colorado.

Watch the interesting CBS segment below about private land for sale in our country’s national parks: