Tuesday, October 21, 2008
IS RANCHING SUSTAINABLE?
I hear often from livestock proponents that ranching is an economically sustainable use of western rangelands. Unfortunately many interested in conservation also believe this myth, and it has unfortunate public policy implications. As University of Montana economist Tom Power has noted, most people have a rear view mirror of their local and regional economies. They almost never know what is happening in the present and their ability to predict the future is even less accurate.
Ranching is doomed in the West by rising land values. Ranching, like all agriculture, persists on marginal land—lands that can’t provide a higher monetary return doing something else—usually real estate development. When land prices rise to the point that one cannot reasonably be expected to return sufficient profit to pay a mortgage on such property running cows, growing wheat or whatever, it signals the end of that industry—even though it may take a long time for the industry to completely disappear from the regional landscape. It is this long lingering death that fools people into believing ranching is sustainable.
With regards to ranching in the West, land values have already marginalized the industry. Few are buying ranches in the West to raise cows, or at least to make a profit raising cows. Today’s ranch purchaser is usually an amenity buyer who is more interested in seeing elk and catching trout than returning a profit from a livestock operation. For instance one recent study of ranching in the Greater Yellowstone Ecosystem found that most new ranch owners had earned their fortunes in other business endeavors. The ranch was a vacation home—a trophy to signal success—rather than a viable livestock operation. In many cases, if a cattle operation persists, it’s a tax write off rather than a source of income. Traditional ranching in the West is on life support and dying.
This was brought home to me a number of years ago when I was on a tour of a ranch along Montana’s Rocky Mountain Front. The rancher, who I’ll call Bob, had grown up on the ranch which his grandfather had homesteaded. His Dad inherited the ranch and passed it on to Bob. The fact that that three generations of Bob’s family had lived on the land was “proof” of its sustainability—or at least that is what Bob claimed.
However as we spent the day together Bob indirectly offered much evidence to suggest that ranching was not economically and socially sustainable, even as he asserted over and over again about how sustainable ranching was.
The first hint that ranching might not be sustainable occurred when we visited a bluff overlooking the river that flowed through the center of the ranch. Bob told how when his Dad was a kid there had been six families living in that river valley. But the low productivity of the land meant one needed a huge spread of land to just break even on ranching. The homesteads were simply too small to support an economically viable ranching operation. Gradually each family gave up ranching and sold their property to Bob’s grandfather and later his Dad so that today where once there were seven families living along this stretch of river beneath the mountain front, there was only one—Bob’s.
Later we were discussing his youth, and Bob told us how he used to ride a horse to the local schoolhouse three miles down the road from the ranch. Today the school is closed due to declining enrollment (all those families that left the valley and other nearby valleys were no longer sending their kids to the local school). Bob’s kids had to ride an hour or more on a bus to get to the nearest school. Bob lamented how he felt badly for his kids who couldn’t participate in a lot of school extra curriculum activities like after school sports teams because they had to get on the bus to get home. If they didn’t ride the bus home, it meant Bob and his wife would have to pick them up—a two hours round trip from the ranch—something they just wouldn’t do very often. His kids felt socially isolated and were not happy living on the ranch.
But it wasn’t only his kids who were socially isolated. Bob’s wife longed to move into Great Falls. She hated driving more than an hour just to shop for groceries. As the only “wife” living in that isolated valley, she also missed having social contact with other women.
In addition to the closure of the school, there was a decline in other essential services as well. Without a lot of ranches to support a large animal vet, Bob had to depend on a veterinarian who lived a long distance from his ranch and had only infrequent visits. The same thing applied to medical help. When Bob was a kid, there was a “country: doctor who attended to the needs of all the far flung ranching families, but with fewer families, Bob’s family often had to drive into Great Falls to attend to even simple medical needs.
Bob then confided that even though the ranch he inherited was formed from the “bones” of six other homesteads, it still wasn’t really large enough to run the number of cattle he really needed to succeed financially. With three kids that he was hoping would go off to college, his ranch, though considered a good sized spread by Montana standards, still could not produce enough income to pay for things considered essential by today’s standards like a college education for his kids. Paying for college, much less braces for teeth, computers, and other “necessities” of today’s family expectations was not something that his grandfather and father had to factor into the family budget.
But unlike his grandfather or even his father, Bob could not expand the ranch by buying additional lands. Land values had risen due to demand for amenity ranches and prices were now far above what any one could reasonably pay back raising livestock. Bob was “stuck” in time with a ranch suitable for a 1950 lifestyle with expectations and financial obligations of a 2000 lifestyle. And because it was a long ways from the ranch to a sizeable town where other employment options were available, Bob’s wife couldn’t take on a job to provide a second income—which is how most traditional ranchers are surviving at all these days.
To make matters worse from Bob’s perspective, he increasingly had to make minor changes in his ranch operations due to environmental concerns. For instance in the past he could drain the river to fed his thirty hayfields. But today there were endangered fish in the river, and he was under pressure to reduce his water usage. Of course, one could suggest that if Bob really internalized all the environmental costs of his livestock operation he wouldn’t’ be in business another day. But times change slowly and he has only had to make some minor adjustments to appease environmental regulators, but even these minor new costs were hurting what was really a marginal economic operation. In the past, he could “externalize: all these costs on to society and the land’s wildlife, but people was increasingly saying they wanted Bob to pay the real cost of raising cows in the arid West, and these “new” costs were cutting into his bottom line.
It’s been a few years since I was on Bob’s ranch, however, I ran into him recently at another event. When I inquired how things were going with the family, he told me that his wife had moved into Great Falls with the kids so they could attend high school and participate in things like after school sports. With a second house mortgage to support in the city, and those college tuitions to pay, Bob found it increasingly difficult to make the ranch financially solvent. At first Bob’s wife and kids would come out to the ranch on weekends and in the summer, but over time, these visits became fewer and farther apart. Eventually Bob’s wife met another man in Great Falls whom she married. Recently Bob sold his “sustainable” ranch to an amenity buyer. He remained on the ranch as its manager.
Bob is still insisting that ranching is sustainable—though he is now the ranch manager instead of the ranch owner. The new owner is more interested in elk and trout than cows. Bob still gets to play cowboy running some cows, though far less than in his Daddy’s day. And it’s not cows that are supporting the ranch now, rather money earned elsewhere in the economy. Bob will probably go to his grave thinking that ranching is sustainable, but his circumstances suggest otherwise.
What Bob described to me was all the reasons why ranching was not sustainable. They are economic as well as social. And they are being repeated over and over throughout the West. Unlike the gold placer deposits that disappear quickly, and with it a mining town, ranching is dying a slow death, cut by cut, but it’s terminally ill. It’s just taking a long time to die, and this fools people into believing that there’s a future for ranching.
This has major public policy implications. Many people resist land use planning and zoning believing there is an alternative—namely that ranching will protect open space. But in a region with rising land values, counting on ranching to preserve open space is a fool’s game. If people are genuinely interested in preserving open space, important wildlife habitat, and public access to the land, they are going to have to bite the bullet and buy it—either with conservation easements or outright fee purchase. That is the only way to preserve what we have now into the future.