And why selling one doesn’t mean the family failed.
Americans love the idea of the family farm or ranch. We like the old photographs, the weathered barn, the family name on the gate and the notion that four or five generations have worked the same piece of ground. Whether the ground is in Pennsylvania, Nebraska, Colorado or Montana. It connects us to an older version of the country, one that feels independent, durable and recognizably American. Hollywood loves all this even more than we do because the concepts and visual nostalgia sells advertising quite well.
In the modern version, the ranch becomes sacred ground. Selling an acre amounts to family betrayal. Developers circle the fence. The children fight over succession. Somebody is always trying to steal some part of it and turn it into something the neighbors don’t want. By the end, preserving the ranch intact becomes the ultimate test of character. It makes for dramatic television and movies. It is also a strange (and maybe not a good) way to think about an asset worth millions of dollars.
The people who assembled many of the great Western ranches were generally more practical than the stories we now tell about them. They bought land when opportunity presented itself. They sold pieces. They traded ground or leased it when they needed to. They borrowed money, expanded, then maybe consolidated some when the market changed. They changed operations when economics demanded it. Water systems were engineered and improved. Roads were built or sometimes let go back wild. Grazing patterns changed. Better equipment replaced old equipment sometimes, but old equipment was also maintained and put to use as long as it was practical. They built businesses but sometimes they were just trying to get by and see the season through until next year and hope for better times.
If you could sit down with a rancher from 1920 and tell him that the place he assembled for cattle and hay was now worth $15 million to someone who wanted it for a week or two of elk hunting, and to take in the beautiful views when they visit, he would probably be astonished. But would he really say, “Never sell it. Make sure my great-grandchildren run cows, because I did?”
Maybe he would. Or he might also say, “Fifteen million dollars? Well, I’d be inclined to consider that offer very carefully!”
Land and Cash Solve Different Problems
This is where the mythology around legacy becomes nuanced and far more complicated. A ranch can represent extraordinary value on paper while producing fairly modest, if any, cash returns. A family may own millions of dollars in land and still spend the year worrying about the fluctuations of the cattle market, equipment repairs, labor, water or just the basic cost of fertilizer.
That doesn’t make the ranch a bad investment. Appreciation in Western land has created enormous wealth for families who held good properties for a long time. But eventually someone has to decide what that wealth is for.
Suppose a family owns an $8 million ranch producing a relatively modest annual return. Three children inherit it. One wants to keep ranching. Two have careers elsewhere. Keeping the property intact may require the two non-ranching heirs to leave millions of dollars tied up in an asset they don’t use and can’t enjoy just so their sibling can continue operating it. Suddenly, “keep the ranch in the family” becomes a more complicated sentiment to the siblings. And there is also the problem that sometimes an heir isn’t the best operator of the ranch, which is a sad but all too common problem in the ranching industry.
Selling doesn’t necessarily destroy a legacy. It can convert one form of family wealth into another. The proceeds might fund retirement, businesses, homes, advanced degrees or investments for several generations. The ranch that created the family’s wealth has still done its job and great-great-grandpa would probably still be proud.
The Ranch Doesn’t Know Your Last Name
There is another uncomfortable truth in the mythology of multi-generational ownership. A ranch does not automatically fare better because the same family owns it for a hundred years. Some generational owners are exceptional stewards. Others are not. Some new owners invest heavily in water systems, fencing, habitat and agricultural productivity. Others do not. The land responds to proper management. But more often it benefits even more from high levels of capital and time invested which are sometimes in short supply when family dynamics are involved.
Unfortunately for Hollywood and those who romanticize ranch life, the land doesn’t actually recognize genealogy. A ranch purchased by someone with the resources and desire to improve it can enter one of the most productive periods in its history. Another ranch can remain under the same ownership for generations while infrastructure deteriorates because nobody has the capital, passion, or time to keep up with it. Longevity deserves respect. However longevity and legacy should never confused with actual virtue.
Ranching Isn’t a Western Costume
This may be where popular culture does ranching the greatest disservice. The modern television ranch has become a stage for dynastic warfare set with a soap-opera levels of drama. Ranchers are portrayed as permanently besieged, suspicious of outsiders and willing to do nearly anything to keep outsiders from changing “their” version of the West. Real ranching, for better or worse, is considerably less theatrical and far more emotionally mature, at least for some of us, some of the time.
Real ranching involves budgets. Water calls. Equipment notes. Veterinarians. Commodity prices. Hay yields. Grazing leases. Payroll. Insurance. Succession planning. A tractor that inevitably breaks when you need it, and and something rarely gets mentioned on TV but always gets mentioned at the local breakfast counter, the WEATHER!
Most ranch families are making the same kinds of decisions other business owners make: Where should we invest? How do we balance expenses and income? Is this operation still viable? Does the next generation actually want to continue to be a ranching family? Is our capital better employed somewhere else? Is it going to rain next week? Why did it rain 3″ last week? And where did I leave those new spark plugs and air filter I bought for the buggy?
There is nothing less Western about asking those questions. In fact, basic pragmatism may be one of the oldest and most important Western traditions there is.
So Why Do Some Families Keep Them?
Families keep them because sometimes and in some cases the numbers and the attachment point in the same direction. The ranch still works. The family has the resources to hold it. Someone in the next generation genuinely wants and enjoys the responsibility. Hopefully land continues to provide income commensurate with its value. Maybe it’s the continued recreational enjoyment, appreciation or simply a place the family values more than the money someone is offering for it. That can be a wonderful outcome. But it means more when it is a choice rather than an obligation imposed by a romantic idea born in Hollywood about what ranch families are “supposed to do.” A family that owns a ranch for five generations has accomplished something unusual and something worth celebrating. Also, a family that sells after five generations after careful consideration hasn’t necessarily undone any of it. Both paths have merit.
The family owned a scarce piece of Western land through a century of droughts, markets, wars, changing agricultural practices, population growth and enormous appreciation in land values. At some point, somebody may look at what the ranch has become worth and decide that the opportunity created by selling it outweighs the opportunity created by keeping it. Great-grandpa might understand that better than we think.
After all, he probably didn’t spend his life building an asset so his descendants could prove their loyalty to him and his vision for ranching, whatever that may have been, who even knows? What we do know is, like everybody else at the time, great-great-grandpa was probably working hard and trying to build something valuable.
