Ranch Real Estate Blog

3,424 Deeded Acres of Off-Grid Montana Rangeland to Sell at Sealed-Bid Auction

October 7th, 2014

Mason & Morse Ranch Company to Conduct Event Running Through November 4th, 2014

October 7, 2014 (KANSAS CITY, Mo.) – Serious investors will soon have the opportunity of a lifetime to bid on a prime piece of Montana rangeland at auction. Wyant Creek Ranch, outside of Forsyth, Mont., will be offered to the public during a sealed-bid auction running through Nov. 4. This property is offered in two tracts being either its entirety of approximately 3,424 acres or the northern tract of approximately 1,173 acres.

Wyant Creek Ranch is off-grid property using solar, wind and generators for the buildings and six water wells. This sustainable property includes open rangeland with native grasses, grading into sage and forested hills providing excellent habitat for native wildlife populations.

“The hunting and recreational possibilities are numerous,” said Bart Miller, managing broker of Mason & Morse Ranch Company. “The wildlife consists of mule deer, white-tail deer, antelope, elk, turkey, and grouse. Additionally, snowmobile, cross-country ski, hiking, mountain biking, and fishing the Yellowstone River are just minutes away.”

The property consists of one contiguous block and offers privacy and seclusion, yet within close proximity to Interstate 94 and the town of Forsyth. The ranch is currently running cattle and a few horses.

“The current owner estimates the carrying capacity as 100 AU or 180 pair for the summer,” Miller said. “This could be improved upon with additional fencing for rotational grazing. There are over 200 acres of the ranch that would be ideal for farming development.”

The home, built in 2000, features a second-floor deck, walk-out daylight lower level. The residence is just less than 4,000 square feet with four finished bedrooms. It includes a kitchen and dining room on upper level, two full bathrooms, a den with kitchenette on the lower level, metal roof, fireplace, wood stove, propane GFA heating (1,000-gallon tank), solar electric with two 400-WATT wind generators, plus a back-up gas generator. To top it off, the home has a crow’s nest/cupula with 360-degree views along with fenced landscaping.

The property also features a shop, corrals, well with a 1,000-gallon cistern, septic, as well as satellite and fiber-optic phone service.

For more information on Wyant Creek Ranch or to learn about the terms and conditions of the auction, call 970-928-7100 or email Tammy Ward at tammy@ranchland.com. View all of Mason & Morse Ranch Company’s real estate listings at Ranchland.com.

Mason & Morse Ranch Company Will Facilitate a 1,616.34+/- Acre Absolute Auction along the Pecos River

June 11th, 2014

FOR IMMEDIATE RELEASE

June 10th, 2014 (Santa Fe, New Mexico.) – Mason & Morse Ranch Company, of Aspen, Colo ., – “A Strategic Partner of United Country Real Estate has been selected to Auction the 1616.34+/- acre Pecos River Ranch Retreat, located just 35 minutes from Santa Fe, New Mexico.

The Pecos River Ranch Retreat offers 1,616.34+/- acres of usable and scenic land featuring roughly a mile of the winding Pecos River and views of Rowe Mesa and the Pecos & Rowe Valley. The northeast portion of the property borders BLM and state land with additional access to the Santa Fe National Forest. The land is gentle rolling featuring mature piñon and juniper trees, ponds, meandering cow creek, as well as flat grasslands and an arroyo running through the property.  Included in the sale is a diverse set of improvements and infrastructure, offering a total of 70,000+/- square feet of living and event space.

For a number of years in its most recent incarnation, the Pecos River Ranch Retreat served as the campus for the former Native American Preparatory School. “The school sought to provide educational opportunities in a college preparatory environment for Native American students.” Said Bill Logue, Pecos River Ranch LLC representative.  Since the closure of the school, the property has been under the careful care of an onsite property manager.

Pecos_Vertical

The location of the property is only 35 minutes from downtown Santa Fe, New Mexico and is tucked away in the expanse of New Mexico’s scenic beauty. “The possibilities are unique for a variety of buyers seeking a river ranch, fishing property, horse riding lands, recreational or commercial asset bordering BLM and state land with over a mile of Pecos River frontage.” Said Bart Miller, Managing Broker Mason Morse Ranch Company. “Interested bidders are encouraged to review more details about the auction process by going to www.ranchland.com/pecosriver .”

Other notable properties bordering the Pecos River include the “Pecos River Ranch” previously owned by Val Kilmer. “The Santa Fe New Mexican previously reported that the actor sold most of his 5,328-acre Pecos River ranch in San Miguel County, N.M. to a Texas oil and gas executive and his wife. The deed transfer was recorded on Sept 30th, 2011.”

According to the Santa Fe New Mexican, Kilmer had been asking for $33 million when he put the property up for sale in 2009, but reduced the price to $18.5 million. A San Miguel County Clerk told the publication that Kilmer kept 14 acres for himself. The Pecos River Ranch is about 22 miles northeast of Santa Fe, with wildlife, 10 natural springs, world-class fishing and more than 50 miles of hiking and biking on a beautiful trail system.

About the Pecos River

The Pecos River flows through New Mexico and Texas, emptying into the Rio Grande. The headwaters of the Pecos River are located north of Pecos, New Mexico, United States, at an elevation of over 12,000 feet on the western slope of the Sangre de Cristo mountain range in Mora County. The river flows for 926 miles through the eastern portion of New Mexico and the neighboring state of Texas before it empties into the Rio Grande near Del Rio. The river’s drainage basin is approximately 44,300 square miles in size.   The river was named “Pecos” by the Spanish from the Keresan name of the Pecos Pueblo. The river played a large role in the exploration of southwest by the Spanish. In the latter half of the 19th century, “West of the Pecos” was a reference to the rugged frontiers of the Wild West.  New Mexico and Texas disputed water rights to the river until the federal government settled the dispute in 1949 with the Pecos River Compact. The Pecos River Settlement Agreement was signed between New Mexico and Texas in 2003.   On June 6, 1990, 20.5 miles of the Pecos River—from its headwaters to the town site of Tererro—received National Wild and Scenic River designation. It includes 13.5 miles designated “wild” and 7 miles designated “recreational.”   Water conservation practices on the Pecos River are overseen by the United States Bureau of Reclamation, along with the state engineer of New Mexico, the Pecos Valley Artesian Conservancy District, and the Carlsbad Irrigation District in the upper river valley. The Red Bluff Water Power Control District, along with its seven water improvement districts, oversees water use in the lower valley and works to provide equitable distribution of water supplies.

About Mason & Morse Ranch Company, Strategic Partner of United Country:

“Ranches Farms Land Sales” – www.ranchland.com, affiliate of United Country Real Estate, is a leading provider of ranch, farm, timber and recreational land brokerage & auction services across the United States. Founded in 1998, in the Roaring Fork Valley near Aspen, Colorado, the company specializes in marketing high-value and large acreage properties across the U.S. Combined, Mason & Morse Ranch Company agents offer their clients more than 133 years of combined experience in ranch, farm, timber and recreational real estate sales.  Recently recognized by The Land Report as one of America’s Top Brokerages, “Spring Edition, and 2014 Featuring America’s Top Brokerages.”

Mason & Morse Ranch Company – Strategic Partner of United Country Real Estate is separately owned and operated from Mason Morse – Coldwell Banker of Aspen, Colo.

For Addition Information Contact Bart Miller via bart@ranchland.com or 877-207-9700.

Mason & Morse Ranch Company Expands Services with MineralMarketing.com

April 14th, 2014

Ranch, Farm, Timber Recreational Land Sales Firm Creates U.S. Mineral Marketing Relationship

April 9th, 2014 (DENVER, Colo.) – Mason & Morse Ranch Company, LLC, of Aspen, Colo., has formed a strategic relationship with MineralMarketing.com a nation-wide mineral marketing company with services specifically designed for marketing American oil & gas assets.

The strategic relationship will expand Mason Morse Ranch Company’s ranch and farm land marketing services by offering clients an option of marketing for sale or acquiring oil and gas minerals across the U.S.

“As a company, we believe in delivering experience to our clients in all areas when buying or selling land. Minerals are a key component to every real estate transaction, which is why our firm developed this exclusive relationship with one of America’s most recognized mineral experts around the country,” said Bart Miller, managing broker of Mason & Morse Ranch Company.  “Our company values align well with Mineralmarketing.com. Their executive team brings an incredible amount of experience to our firm when dealing specifically with the sale or acquisition of mineral rights by land owners and investors.”

“Mason & Morse Ranch Company is an excellent fit with MineralMarketing.com and we look forward to providing professional oil and gas mineral rights consultation, marketing, leasing and disposition strategies to their base of affluent cliental,” said Shawn Terrel, chief operations officer of MineralMarketing.com.  “They have a very strong knowledge of marketing premier ranches, income producing farms, timberland and luxury recreational land and we feel fortunate to be able to offer our oil and gas energy focused programs as a compliment to their services across the U.S.”

 About Mason & Morse Ranch Company, Strategic Partner of United Country:

“Ranches Farms Land Sales” – www.ranchland.com, affiliate of United Country Real Estate, is a leading provider of ranch, farm, timber and recreational land brokerage services across the United States. Founded in 1998, in the Roaring Fork Valley near Aspen, Colorado, the company specializes in marketing high-value and large acreage properties across the U.S. Combined, Mason & Morse Ranch Company agents offer their clients more than 133 years of combined experience in ranch, farm, timber and recreational real estate sales.  Recently recognized by The Land Report as one of America’s Top Brokerages, “Spring Edition, 2013 Featuring America’s Top Brokerages.” 

About MineralMarketing.com:

MineralMarketing.com is headquartered in Alva, Oklahoma with regional offices and representatives throughout the U.S. The target areas of our operations are focused on active plays and developing trends across the country. MineralMarketing.com is a nation-wide marketing company providing quality promotional services specifically designed for American oil & gas assets.  Our detailed approach to the energy market generates successful transactions from a qualified portfolio of prospective buyers comprised of investors, producers, operators and publically-traded corporations with nearly unlimited purchasing power. By combining the influence of these prospects we ensure a complete market for all oil & gas assets. We are aggressively pursuing targets in most major plays across the United States and are actively uncovering new opportunities to better serve our clients. Our company’s offerings include the leasing, acquisition and divestiture of: Oil & Gas Mineral Rights, Producing & Non-producing Mineral Interests, Oil & Gas Royalty Interests, Working Interests, Overriding Royalty Interests, Oil & Gas Service Companies, Operations, Facilities, Equipment, Infrastructure and Leasehold A&D. We offer privately-negotiated sales strategies, lease consulting and marketing, and auction services.

Mason & Morse Ranch Company Forms Strategic Partnership

March 13th, 2014

Ranch, Farm, Recreational Land Firm Supports Lifestyle Property Giant’s Vast Network of Affiliates

March 13, 2013 (DENVER, Colo.) – The owners of Mason & Morse Ranch Company, LLC, of Aspen, Colo., have announced they are extending their relationship with United Country Real Estate, the nation’s largest seller of non-urban agriculture and lifestyle properties. This comes in the form of a continuation of Mason & Morse Ranch Company’s affiliation with the rural real estate company, as well as a new strategic partnership that will benefit all of United Country’s roughly 4,000 professional brokers, agents and auctioneers across the U.S.

This strategic partnership will allow affiliates of the United Country Real Estate franchise system to work in collaboration with the team at Mason & Morse Ranch Company in securing and marketing high-value land properties such as working ranches, pastureland, grassland, large production agricultural farms, luxury mountain ranches, guest ranches, timberland, hunting and recreational lands across the U.S.

“United Country’s legacy of innovation and industry leadership supports our founding principles and the vision we have for Mason & Morse Ranch Company,” said Bart Miller, managing broker of Mason & Morse Ranch Company. “Our two companies recognize each other’s specialized background and experience in the ‘non-urban’ real estate market. At Mason & Morse Ranch Company, we’ve found great value in our partnership with United Country and are looking forward to offering our knowledge and expertise with large acreage and high-value land transaction to United Country’s international network of real estate land professionals.”

“Mason & Morse Ranch Company is a perfect and natural fit within our organization and we look forward the expansion of our already successful partnership,” said Dan Duffy, chief executive officer of United Country Real Estate. “Their expertise and knowledge of marketing premier ranches, large production farms, timberland and luxury recreational land is an excellent complement to our services and affiliate offices across the U.S.”

Gila National Forest Ranch Hits the Real Estate Market

February 26th, 2014

Denver, Colo. (PRWEB) February 25, 2014

Few people can claim to own a property in United States with no address, but now buyers will have the opportunity to make this happen. Mason & Morse Ranch Company – Strategic Partner of United Country is offering a unique ranch – located in the Gila National Forest – to the public.

“This is truly a once-in-a-lifetime chance,” said John Stratman, broker associate and a principal owner of Mason & Morse Ranch Company – Strategic Partner of United Country. “Rainy Mesa Ranch rests approximately 25 miles east of Reserve, New Mexico, and deep in the Gila National Forest. It offers some of the best big game hunting opportunities in the Continental U.S. and is blessed with a remote location, rugged terrain, live water and plentiful game. The size and scope of Rainy Mesa makes it a trophy ranch property with excellent value.”

Rainy Mesa Ranch consists of approximately 350 deeded acres, with 54,000 acres of National Forest grazing rights and controls geographic access to a significant block of Federal lands. The permit allows for 320 head of cattle and 14 horses year round. The ranch is improved with a Lodge and four homes including a guest home/cabins and a manager’s residence. It is bisected by Negrito Creek, a year-round spring-fed stream, and has five water rights allowing for irrigation, agriculture, commercial, domestic, stock or other purposes. There are four trout ponds on the property that are, or have been, stocked and are on automatic feeders. Additionally, the ranch has been operated by a professional manager and hunting guide who has expressed an interest in continuing in his capacity.

“The ranch features spectacular hunting combined with a viable ranch operation,” Stratman said. “Its end-of-the-road location offers extreme privacy with the comfort of excellent improvements. Western New Mexico is known for its trophy-quality large game animals where the climate, elevation and food sources allow the animals to have large body sizes, and genetics have blessed them with large horns as well.”

For more information on this unique opportunity, contact Mason & Morse Ranch Company – Strategic Partner of United Country at 877-207-9700, or visit RanchLand.com.

The Best in the Land Business to Convene at the 2014 National Land Conference

February 11th, 2014

Bart Miller Managing Broker and a principle owner of Mason Morse Ranch Company is the current Colorado RLI chapter president. He will be attending the 2014 National Land Conference in Charleston SC.

February 5, 2014 (Chicago, IL)–The 2014 National Land Conference: If Land Could Talk, produced by the REALTORS® Land Institute will bring together land professionals from around the United States and Canada in Charleston, SC, March 12-14 to learn from expert presenters, network with peers, make money, and celebrate the 70th Anniversary of the Institute.

Attendees will explore future business trends during 15 general sessions and 20 “hot topic” roundtables led by industry experts on issues including the economy, energy sector exploration, land investment opportunities, land conservation, investment opportunities, hydraulic fracturing, new technology, social media, and marketing.

A new Meet, Greet, and Make Money event will generate new business on the first day of the meeting. Participants will connect with peers during one-minute pitches and a marketing collateral and business card swap. Networking will continue throughout the conference during a Bourbon and Boots inaugural reception for George Clift, ALC, 2014 National Institute President; a 70th Anniversary Luncheon commemorating the Institute’s past, present, and future; the one and only Greatest Cowboy Auction on Earth, and a celebration of culture during a musical performance of Charleston’s a cappella Gullah group, the Magnolia Singers.

George Clift, ALC, 2014 National Institute President encourages land professionals to attend, “This is the ‘place to be’ for land experts planning to find success in 2014.  With the ever-changing marketplace, building on knowledge and staying current on market trends and techniques is the key to success. Convene with the best-in-the business to learn from world renowned presenters, to make connections, and to make money.”

About the REALTORS® Land Institute, 
The REALTORS® Land Institute is the professional membership organization for real estate practitioners who specialize in land transactions. An affiliate organization of the National Association of REALTORS®, the Institute provides a wide range of programs and services that build knowledge, relationships, and business opportunities for the best in the land business. Through its best-in-class LandU curriculum, the REALTORS® Land Institute confers its Accredited Land Consultant (ALC) designation to only those real estate practitioners who achieve the highest levels of education, experience, and professionalism. For more information visit www.rliland.com.

Wheat Market Update

October 1st, 2013

By Steve Kaufman/Northwest Farm Credit Services

Weather and markets are intrinsically related for Northwest wheat growers entering summer. Key drivers impacting producers’ bottom line include: 1) Precipitation: Producers in Montana received up to 10” of rain between May and June. Precipitation deficits in Washington and Idaho were stabilized with mid- and late June rains, while Oregon growers generally face rain deficits. 2) Crop conditions: Above average crops are expected in Montana. Yields are expected to be average in Washington and Idaho and below average in northeastern Oregon. 3) GMO market response: After initially falling, soft white wheat markets rebounded following identification of isolated GMO wheat in an Oregon farmer’s field. 4) Tight old crop corn stocks: Wheat continues to enjoy support from corn. Most producers have sold their entire 2012 crop and up to 35 percent of their 2013 crop. 5) Uncertain markets going forward: Although world wheat ending stocks are only forecast up slightly in 2013/14, a large corn crop may drive feed grain and wheat prices lower. 6) Crop insurance risk management: Montana growers have aggressively purchased hail insurance, attempting to protect a bumper crop. Wheat produces in other areas should mitigate losses with crop insurance provided revenue protection.

Northwest

Grain growing regions in the Northwest reflect extremes, with crop conditions ranging from above average in Montana to below average in North Central and Northeastern Oregon. Second quarter agronomic practices included increased input costs associated with rust (i.e. fungus) control in some areas. Harvest is expected to be near historic dates. Most producers have sold their entire 2012 crop and forward contracted between 25 to 35 percent of their 2013 crop. Where crop losses may occur, producers with crop insurance have a revenue floor providing financial security.

Throughout Central and Eastern Montana, May and June rains have reversed drought-like conditions. Precipitation totals range between several inches to 10 or more inches. Dry conditions in Washington and Northern Idaho were also alleviated with mid- and late June rains. In North Central and Northeastern Oregon, high temperatures and too little rain parched wheat crops on lighter soils.

Expectations are for above average wheat crops in Montana. Crops should be average in Washington and Northern Idaho, while below average yields are anticipated in Eastern Oregon.

High precipitation has resulted in only limited spraying for leaf rust in Montana. Rust is a fungus that is relatively uncommon in Montana, but frequently associated with above average precipitation in Washington, Idaho and Oregon. Left untreated, yield losses due to rust can be as high as 50 percent. Although farmers in Washington and Northern Idaho have struggled with below average precipitation, many have sprayed for rust, noting infestations associated with limited rain, but cooler temperatures. The costs of spraying for rust are approximately $10 per acre (including aerial application).

With strong yields expected, wheat producers in Montana have purchased above average levels of hail insurance, attempting to secure a bumper crops reward. In drier areas, crop insurance will play a key role in offsetting producers’ losses where yields are below average. Overall, crop insurance should assure wheat growers’ financial security in 2013.

Wheat producers should initiate harvest near historic dates, with early indications suggesting harvest as early as the first week of July in North Central Oregon. Land values remain strong, bolstered by producers’ sense of scarcity or strategic purchases. However, higher land prices are generally not reflected in higher cash rents.

In Northwest wheat industry news, the USDA reports no indication that genetically modified soft white wheat found in an Oregon farmer’s field spread beyond the field. Japan and Korea have temporarily suspended imports of western white wheat as the USDA investigates. Northwest white wheat markets have rebounded after initially falling in response to the news.

U.S. and Global Wheat Markets

All wheat planted acres are projected at 56.5 million with the USDA’s June 30, 2013 Acreage Report, up 1 percent from last year. Old wheat stocks in the USDA’s June 30, 2013 Grain Stocks Report totaled 718 million bushels June 1, 2013, down 3 percent from June 1, 2012. Acreage and stock reports are initially bearish to neutral, pressured by ample wheat stocks.

The USDA forecasts 2013/14 U.S. wheat production of 2.080 billion bushels, 8.3 percent lower than estimated 2012/13 production. Total 2013/14 U.S. wheat supplies are also projected lower, down 5.8 percent from 2012/13, limited by lower production. United States total projected 2013/14 wheat use is down 3.9 percent, slowed primarily by lower feed and residual uses and exports, down 19.4 and 3.5 percent respectively. Wheat feeding is expected to be less attractive by late summer, limited by large supplies and lower prices for feed grains. Strong crops in major exporting countries are projected to limit exports in 2013/14. Ending U.S. 2013/14 stocks are forecast at 659 million bushels, down 11.7 percent from 2012/13. United States ending stocks to use of 28.7 percent for 2013/14 is substantially higher than the record low of 13.2 percent in 2007/08.

Lower U.S. production is due to 2.1 million fewer expected harvested acres in 2013/14 and a forecasted yield of 46.1 bushels per acre, down 1.1 bushels from 2012/13. Hard Red Winter wheat production is down most significantly at 781 million bushels, 223 million bushels lower than a year ago. Factors constraining hard red winter wheat production include a forecasted lower planted area, higher expected abandonment rate and reduced yield due to drought and spring freeze damage. Conversely, soft red winter wheat production is forecast up 89 million bushels from 2012/13 at 509 million bushels, while soft white winter wheat production of 219 million bushels is forecast down 3 million bushels from the prior year. Overall, year-over-year winter wheat conditions are poorer, with 43 percent of the crop rating ‘Very Poor’ or ‘Poor’ as of July 16 compared to only 17 percent of the crop with similar ratings in 2012.

Wheat graph

 

The World Agricultural Outlook Board projects 2013/14 world wheat ending stocks of 181.3 million metric tons, up 0.8 percent from 2012/13, but 9.1 percent lower than 2011/12. The projected yearover- year increase in ending stocks is partially attributed to higher forecasted production in 2013/14, up 6.1 percent from 2012/13 and 4 percent greater than the 5-year average. At 181.3 million metric tons, 2013/14 ending stocks to use is 26.2 percent; above the historic low of 21.0 percent stocks to use in 2007/08. Chinese ending wheat stocks of 62 million metric tons account for 34 percent of global ending wheat stocks.

Although Russian and Ukrainian wheat production is up a forecasted 37 percent from 2012/13, both areas face production challenges. A six-week period of extreme heat with little rain beginning in the second half of April and lasting through mid- to late May is expected to reduce wheat yields. Similarly, Russia’s South District (bordering Ukraine) experienced a heat wave during wheat flowering and early filling with the number of days with temperatures above 86o F nearly four times higher than the 30- year average.

Global wheat exports are forecast at 144.1 million metric tons in 2013/14, 3.5 percent higher than 2012/13, but 9.1 percent lower than 2011/12. U.S. Wheat Associates reports the Russian government recently announced its intentions to limit wheat exports to 20.0 million metric tons, responding to lower winter wheat production in its South and attempting to rebuild domestic grain stocks. The USDA forecasts 2013/14 Russian exports at 17 million metric tons. Notwithstanding these developments, projected tightening in U.S. ending stocks is likely to limit U.S. 2013/14 export prospects.

wheat stocks

 

U.S. Wheat Associates highlights from the June 12, 2013 USDA 2013/14 wheat supply and demand estimates include:

1. Strong production in the Black Sea region, with production up 34 percent from 2012/13; and Indian production at 92.0 million metric tons, down 3 percent from 2012/13, but still the second largest on record.

2. Record wheat consumption of 691 million metric tons in 2013/14, up 2 percent from 2012/13.

3. The second highest world wheat fee use on record at 134 million metric tons.

4. More trade, rising 4 percent from 2012/13 to 144 million metric tons, 1 percent greater than the 5- year average.

5. Rising exports from the Black Sea and India and lower exports from the U.S. and EU in 2013/14.

a. Black Sea exports are forecast to rebound 31 percent to 33.2 million metric tons.

b. Indian exports are forecast at a record 8.0 million metric tons.

6. Lower world beginning stocks, falling 10 percent from 2012/13 to 180 million metric tons.

a. But, U.S. 2013/14 beginning stocks of 20.3 million metric tons, 5 percent above the 5-year average.

Outlook

The USDA’s 2013/14 season-average farm price for all wheat is projected at $6.25 to $7.55 per bushel; down from the record $7.80 per bushel expected for 2012/13. Daniel O’Brian, Extension Agricultural Economist with Kansas State, proposes uncertainty surrounding 2013/14 global wheat production, concern surrounding the U.S. hard red winter wheat crop, and cross market support from extremely tight U.S. feed grain supplies are likely to support wheat prices through early summer 2013. Longer-term, wheat prices face pressure from larger corn supplies and lower corn prices in the fall of 2013. Northwest FCS analysts estimate wheat producers’ break even price at approximately $6.50 to $7.00 per bushel.

For more information or to share your thoughts and opinions, please contact Steve Kaufman at 509-397-2809 or by email at Steve.Kaufman@farm-credit.com.

Hay Market Snapshot

September 12th, 2013

By Jeff Osborne/Northwest Farm Credit Services

Hay prices have the potential to increase significantly in 2013, but the outlook is unclear. Drivers most impacting the market in the Northwest include: 1) Weather: First cutting alfalfa has been challenging in the Northwest with untimely and frequent rains. Crop damage has been widespread across the region, including Washington, Oregon and Idaho. Damage is most severe in the Columbia Basin. 2) Irrigation water shortages: Despite the wet conditions, growers in Oregon’s Klamath Basin and Southwestern Idaho face early shut-off of irrigation water. 3) Tight hay supplies: Old crop hay supplies in the Northwest were at near-record lows ahead of first cutting. Quality alfalfa is in particularly short supply. This situation is likely to find limited improvement this season, given early season production challenges and limited acreage increases. 4) Variable demand: Limited hay supplies are expected to establish a solid price floor in the hay market, but uncertainty with Northwest export demand and dairy industry profitability have the potential to limit hay price increases.

Local Markets

In the Washington-Oregon Columbia Basin, first cutting alfalfa is complete with some growers working on second cutting. Hay harvest and trade slowed significantly in June due to persisting rains. Rain damage is extensive and impacted nearly all of the area’s first cutting. Second cutting delays continued into the final week of June with some alfalfa at risk of becoming over-mature.

At the end of June, the price for premium quality alfalfa ranged between $215 and $225 per ton at the stack, compared to $210 at the end of March. The ongoing shortage of high quality alfalfa in the Columbia Basin – due to early season rains the past three seasons – has only provided limited price support so far this season. Exporters have shown limited interest in Columbia Basin alfalfa so far. Prices were $240 per ton for premium export hay one year ago. Depending on the extent of rain damage, good quality alfalfa sold for $190 to $215 at the stack, while feeder quality sold for $165 to $175 per ton. Those prices are similar to year ago levels. Timothy hay is in high demand again this year, but severe rain damage in the Columbia Basin and Kittitas Valley will limit the availability of higher grades of timothy. Prices for premium timothy are between $270 and $325 per ton based on market and bale size. That compares to $250 to $320 per ton last year.

In Idaho, growers are more than 75 percent finished with first cutting. Cool weather during the initial harvest slowed curing and put producers behind schedule. The majority of the crop was baled in good condition, but alfalfa still on the ground at the end of June was impacted by rain.

Idaho’s alfalfa market is showing strong demand and prices given tight supplies and the expectation of irrigation water shortages (especially in southwestern Idaho). Dairy buyers have been active in the market, with purchases supported by improved profitability. At the end of June, supreme quality alfalfa sold for $240 per ton at the stack, and premium alfalfa sold for between $225 and $235. Premium quality alfalfa prices have improved by approximately $25 per ton since the end of last quarter. Good  alfalfa sold for $215 to $220 at the stack. Feeder quality hay sold $190 to $200, similar to prices experienced over the past six months.

In Oregon’s Klamath Basin, first cutting is nearly complete, with approximately 50 to 60 percent of baled without rain damage. Producers generally report good quality, but mixed yields with some light crops due to frost earlier this season. The early market is slower than many expected, but with some interest from exporters and dairies. Prices for premium to supreme quality alfalfa range between $220 and $230 at the stack. That is up from $205 and $215 for old crop last quarter, but down from $250 for alfalfa last June. There were no confirmed sales of feeder quality hay to report at the end of June; however, demand for feeder hay is expected up this year. The area is struggling with drought. Upper Klamath Basin hay growers may see lower production due to irrigation water cuts. Irrigation water is already being shutoff to thousands of acres of irrigated pasture. Local ranchers are expected to supplement lost pasture with hay.

Montana hay growers have seen significant improvement in dryland crops due to recent rains. The USDA Market News reports that there were no confirmed sales of hay in Montana the week of June 16, but demand is good for all types of hay. Demand is reportedly best from out of state buyers, who are making offers near last year’s drought-driven prices. According to USDA National Agricultural Statistics Service (NASS), Montana alfalfa prices reached a peak of $170 per ton this March and averaged $140 per ton in 2012. In contrast statewide alfalfa prices averaged $98 per ton in 2011. Montana cattle producers have seen improved conditions for pasture and rangeland, but will likely seek additional feeder hay this year to assure adequate winter feed and begin rebuilding hay stocks.

Hay Supplies

Precipitation and Irrigation: Prevailing weather and the availability of irrigation water are impacting hay production in the Northwest and California in 2013. As detailed above, the Northwest saw widespread rain damage on first cutting hay, and limited irrigation water supplies will impact growers’ production decisions. Hay growers in areas with irrigation cuts are likely to take fewer cuttings this year. To compensate, growers are likely to focus on maximizing yields at the expense of quality. Given these factors, high quality hay is likely to remain in short supply throughout the season. Southwestern Idaho hay production is threatened by early conclusion to water deliveries. The Boise Project Board of Control, which supplies water to the Treasure Valley, announced a 53 percent cut in water allotments, with shutoff slated for the first part of September.

Access to irrigation water is a contentious issue in the Klamath Basin. Klamath Falls hay growers expect they’ll have enough water to get through the end of summer by using a combination of ground idling, well pumping and other strategies. The number of alfalfa cuttings, though, will likely be limited to three versus four. The situation is particularly difficult for producers in the upper basin, where the Klamath Tribes and the U.S. Bureau of Reclamation exercised senior water rights, and shutoffs have already begun. Adjudication of the basin water rights was completed in March, confirming that the tribes have the most senior water rights in the upper basin. The March action reversed the situation that occurred during the 2001 drought. The bureau shut off irrigation to most of the project, but cattle ranchers in the upper basin still had water to irrigate.

California hay production has not been immune to weather challenges this season. USDA Market News reported that California experienced its seventh warmest spring on record. Alfalfa in California’s Central Valley is competing with permanent crops for limited irrigation water. Some growers have stopped irrigating alfalfa and have abandoned fields after limited cuttings. Producers in far Northern California experienced similar conditions to Oregon producers in Klamath Falls. Late June rains impacted hay production, while yields losses from a May frost are now being realized. Hot and dry conditions in Southern and Southeast California, coupled with strong winds have made bailing difficult.

Stocks: The May 10 USDA-NASS Crop Production report reveals that May 1 hay stocks in the Northwest were down 33.2 percent year-over-year, led by a significant decrease in Montana. California stocks rebounded above 2011 lows to near historical levels.

NW & Cali chart2

Acreage and Production Potential: Low stocks were met with limited acreage increases in the Northwest this year. According to the June 28 Acreage Report from the USDA, acres of hay for harvest in the Northwest are projected up 10.5 percent, led by a 22.7 percent increase in Montana. Hay acreage decreased an estimated 1.3 percent in Washington, and 2.0 percent in Oregon. Hay acreage is increased 6.7 percent in Idaho, while California is expected to see a 7.7 percent decline.

Based on production challenges, the Northwest and California aren’t likely to significantly rebuild hay stocks this year. The table below projects 2013 hay production using figures from the USDA Acreage Report and a three year average yield. Higher year-over-year yields shown might be achieved as hay growers attempt to maximize hay tonnage this year. Even if overall hay production increases, the market isn’t likely to find a surplus of high quality alfalfa or timothy.

projected hay

Domestic and Export Situation

Beef Cattle: Although pasture conditions in most areas of Montana have improved, beef cattle producers are likely to seek additional hay to begin rebuilding stocks. Forage shortages and dry conditions continue to plague cattle ranchers in areas of Idaho and Oregon. Demand for feeder quality hay in affected regions is likely to receive a boost this summer. Extreme drought conditions persist throughout the mid-section of the country, including in South Dakota, Nebraska, Colorado, Kansas and Oklahoma, which may boost demand for Northwest hay.

Dairy: Demand for hay from Northwest dairies has increased. Milk prices improved during the first half of 2013, and most Northwest producers are profitable at this time. Interest in higher quality hay is evident in higher hay prices in Idaho. California dairies continue to experience weak profit margins, due to limited milk price increases and high feed costs. Markets for alternative feeds will also influence dairies’ decisions and ultimately hay prices in 2013. Corn prices fell following the USDA’s  June 28 report on current corn stocks and production potential for the 2013 crop. Lower corn prices are likely to pressure hay prices down.

Exports: Northwest exporters have shown limited interest in Columbia Basin alfalfa so far this season. Aside from a lack of availability, export buyers are being cautious not to bid up the price of higher quality alfalfa given changing export market dynamics. The Northwest faces high shipping costs. Export business has shifted over the last few years to California, where costs are approximately $300 per container to ship hay from Los Angeles or Long Beach versus an average price of $1,000 per container to ship from Portland or Seattle. A rough estimate suggests that noncompetitive shipping costs place a $25 per ton premium on Northwest hay. Buyers in China and the United Arab Emirates (UAE), the two fastest growing hay export markets, are more sensitive to high prices than Japanese buyers have historically been. (Japanese buyers tend to place emphasis on hay quality. However, Japanese buyers are facing currency devaluation relative to the U.S. dollar that is beginning to make hay imports less affordable.) Given these factors, some Northwest exporters have positioned to take advantage of export market growth out of California by aligning with growers located in the Pacific Southwest or building facilities near Southern California ports.

According to data from the U.S. Department of Commerce, hay export market share continues to shift from the Northwest to California. Combined export volume for 2013 from California and the Northwest was down 0.7 percent year to date as of April, but exports from California ports were up 25.6 percent. Northwest exports are down 18.5 percent year to date. Referencing the graph below, California export volume outpaced the Northwest in February, March, and April.

hay export volume

Outlook

Tepid demand from exporters is limiting price increases for Washington hay, while increased demand from dairies is supporting strong alfalfa prices in Idaho. It appears increased export demand and short supplies in California are boosting hay prices in many areas of the state despite dairy industry struggles.

Tight supplies of high quality alfalfa and timothy have seen limited relief following first cutting in the Northwest. Between rain damage and irrigation water shortages overall hay supplies are likely to remain tight throughout the year. Looking ahead, there won’t be many new alfalfa stands planted in Southwestern Idaho and the Klamath Falls area this fall due to lack of water.

Limited supplies will help establish a fairly solid price floor in the hay market; however, buyers will likely remain cautious moving forward. Improved export demand for Northwest hay and continued profitability for Northwest dairies will support alfalfa price increases, but buyers in both segments will focus on keeping bids low. Lower hay prices will help Northwest exporters be more competitive with California, and lower feed costs will help dairies to weather potential milk price volatility.

Corn has been a favored substitute in feed rations, leaving alfalfa prices susceptible to changes in the corn market. Given the June reports from the USDA, corn prices should pressure hay prices lower.

Although break-even levels can vary significantly among regions and specific growers, alfalfa prices between $175 and $200 per ton will generally result in a strong return to most growers. While projected profit margins are attractive, the hay market remains risky given uncertainty in the dairy sector, limited growth in Northwest hay exports, and softness in the corn market.

For more information or to share your thoughts and opinions, please contact Jeff Osborne at 208-732-1034 or by email at jeff.osborne@northwestfcs.com.

Brand Awareness

September 5th, 2013

Originally posted on Modern Farmer, Written by Rose Garrett

When 19th century Texas land baron Samuel Maverick flouted tradition by refusing to brand his cattle, he could not have known his name would come to represent everything from brassy independence to Tom Cruise to Alaskan politicking. But his indifference toward the status quo soon gave unbranded cattle the ranching land over the nickname “mavericks,” and wranglers have been happily roping lawless bovines ever since.

Most things have changed in the last 200 years, but cattle branding isn’t one of them. The practice dates back to the beginning of livestock tending, and Ancient Egyptian brands like this lion-headed bronze iron burned hieroglyphics into cowhide in just the same way as ranchers do today (although with significantly more deference to the gods). The Spanish brought cattle ranching to Mexico, where a central brand registry was established in Mexico City as early as 1537. Cattle branding followed the Spanish into Texas and it grew alongside open range grazing in the mid-1800s to become the de facto means of identifying a cow from Bismark to Baja.

If done right, branding creates an indelible mark that allows ranchers to keep track of their stock, wayward cattle to be returned to their owners, and stolen cattle to be readily identified, an especially important trick in a time when theft or “cattle rustling” was a crime often met with death. Law-abiding ranch hands kept hand-written and carefully illustrated “brand books” on hand to identify and sort their cattle, and brands today are required to be registered with state or county agencies where a “brand inspector” keeps confusion in check.

What on the surface seems a straightforward practice of laconic, no-nonsense plainsmen, cattle branding is in fact a playground of design and cowboy semiotics. Symbols, visual puns and jaunty combinations of letters, numbers and styles make up a tradition of brand design that’s held steady through decades, giving rise to such notorious brands as the “XIT”, the “Running W” and the “7 Up”.

What’s in a brand? First and foremost, the language of cattle brands is constrained by the not insignificant fact that a brand’s design will be burned into the hide of a living animal. Complex and flowery designs are impractical, easy to flub and, most importantly, more painful for the animal being branded. “The simpler the better,” emphasizes Ken Miller of Long View Ranch in Mandan, North Dakota. “A lot of people want to build a complicated brand like something inside of something else, like a diamond or circle or heart. They work, but they’re harder on the animal.”

Miller brands over 200 of his own cattle yearly, but he channels his creative side by running a brand design business where he consults for outside clients.  Their most frequent mistake? “People get carried away and they do stupid things.” Miller says he’s seen overblown designs like a cattle skull with three letters, plus eyes, ears and horns. “Just because you want it doesn’t mean it’s a good thing to put on an animal.”

Branding designs may have their limitations, but creativity and unique visual conventions thrive within the constraints. The letters, numbers and symbols in brand designs create countless distinct permutations, especially with various styles that can render a single letter into several distinct designs.

Take, for example, the letter “A”. Mark it at an angle and it’s a “leaning” or “tumbling A”. Topple it on its side and it becomes a “lazy A”. Turn it upside down and it’s a “crazy A”. Give it wings, feet or a semicircular rocker and make it “flying”, “walking” or “rocking”. Rendering the letter in curvy script makes it “running.” And that’s before adding numbers and symbols to make a brand even more distinct.

All kinds of A

The vocabulary of cattle brands includes everyday objects that jocular cowboys adopted for their signature. Keys, hats, snakes, rocking chairs, guns, fish, panhandles, arrows, pitchforks and boots add flair to the common bars, circles, diamonds and crosses. Brands are read left to right, top to bottom and outside in, depending on the design, and the vernacular allows for puns and jokes within the design (take, for example, the Bar BQ, Open A Bar or 2 Lazy 2 P brands).

Brand Basics

In the rough days of ranching, brands represented a singular opportunity for sentimentality. A brand became a symbol of pride for a family or ranch and passed down through generations of cattle owners. “They’re very proud of their brand,” says Miller. “That’s their logo. It’s personal. They want to stamp it on everything.”

But while cattle owners deployed their brands, cattle rustlers on the make were just as ingenious in coming up with ways to alter or falsify existing brands. Rustlers made use of “running irons” with hooked tips to forge or change brands, branding freehand under cover of night. Being caught by an angry cattleman with a running iron in your possession meant instant death for many rustlers, but the temptation was hard to resist. Adding a few lines or curves to a brand could quickly turn someone else’s cattle into your own, and inspired rustlers were skilled in the sleight of hand that could transform a “Bar S” into a “48” or a “Flying U” into a “7 Up”.

Brand Makeover

Although the practice of branding has waned somewhat since the decline of open-range grazing, a recent resurgence in old-school cattle rustling has ranchers revisiting their hot irons (or, as the case may be, freeze irons, a newer and less extreme technique that freezes instead of burns). Livestock prices are up and the struggling economy has spurred increased thefts of cattle, which can garner over $1,000 a head.

As a result, cattle owners who may never have branded before are designing new brands or re-registering old brands that have fallen out of use. Local law enforcement is encouraging the uptick in branding awareness.

 

Cattle Market Snapshot

August 27th, 2013

By John Gates/Northwest Farm Credit Services 

Cattle markets face mixed signals entering the third quarter of 2013. Key market drivers include: 1) Improved weather: Pasture and forage conditions throughout most of the U.S. have improved. Exceptions include Idaho and Oregon. 2) Supply and demand contrasts: The outlook for improved grazing and forage conditions, matched with a small cattle supply, support feeder cattle producers’ hope for higher prices. Conversely, demand for beef in domestic and export markets is relatively weak and feedlots are cautious in purchasing high-priced feeders. 3) Tight feed grain supplies: Old crop corn prices remain high, while uncertainty surrounding the 2013 crop is pressuring new crop corn prices. 4) U.S. economic growth: The National Restaurant Association’s Restaurant Performance Index currently signals expanding beef demand. Longer-term, consistent U.S. GDP growth of 3 percent would sustain beef demand.

Price Discussion

Unlike prior years, feeder cattle cash prices didn’t rally between January and April this year. Reasons for a stymied rally include lower fed cattle prices, drought concerns, high feed costs and limited feed availability. Cash market prices for 550 pound and 750 pound feeder steers fell an average of 8 percent since January 2013. Fed cattle prices have remained relatively flat during the same period.

steer

June kicked off the start the video sale season and initiatiated the direction for fall feeder prices. The first Superior Video auction was held June 11 – 12. Superior Video region 1 includes California, Nevada, Idaho, Oregon and Washington. Region 2 includes Colorado, Montana, Nebraska, North Dakota, South Dakota, Utah and Wyoming. June video prices for 550 to 600 pound steer calves in Region 1 and 2 ranged between $156 to $170 per cwt. Yearlings weighing between 800 and 850 lbs. sold for $136 to $138 per cwt. Overall, prices are $15 to $20 per cwt. lower than prior year prices.

Corn prices are also influencing feeder cattle markets. Corn prices have remained high, supported by tight U.S. feed grain supplies. Old crop corn prices are currently more than $6.50 per bushel. Uncertainty surrounding 2013 new crop corn is supporting prices between $5.50 and $6.00 per bushel. New crop corn prices may fall if Midwest growing season conditions improve, including both warming and drying out. Lower corn prices support higher calf and feeder cattle prices.

corn

Supply and Demand

Drought has accelerated tightening cattle supplies in recent years. The January 2013 USDA beef cattle inventory was 29.3 million head, down 3 percent from 2012. By yearend 2013, the USDA projects feed steer and heifer slaughter down 4.9 million head, or 13 percent, from 2001. Although rain throughout much of the U.S. will slow cow slaughter and moderate cattle supplies, the overall beef cattle herd will decline in 2013.

Domestic and export demand remain lackluster. The U.S. Meat and Export Federation reports first quarter exports down 5 percent year over year. Export constraints include a strengthening U.S. dollar and tight cattle inventories. Additionally, drought-based cattle liquidation in Australia and New Zealand are increasing exports and maintaining competitive prices.

Despite falling prices for competing proteins, domestic retail beef prices are expected to continue to climb. However, feedlots remain largely unprofitable, struggling with limited supplies of high priced feed. Consequently, feedlot demand for replacement feeder cattle is limited. On a positive note for cow/calf operators, CattleFax reports feedlot placements for May averaged 745 pounds, 22 pounds heavier than one year ago and the highest average placement weight since 2004. Heavier cattle should finish faster this summer, raising demand for feeder cattle later this summer. Additionally, the National Restaurant Association’s Restaurant Performance Index bodes well for the beef industry, at 101.8 in May. This reflected the third consecutive increase in the index and was the third straight month the index was above the 100 level that signifies industry expansion. The index measures the health and outlook for U.S. restaurants and is an indicator for beef consumption.

restaurant

 

Input Costs

Pasture conditions: Forage shortages and dry conditions continue to plague areas of Idaho and Oregon. Pasture conditions in Montana are improved, where producers are less concerned about forage.

Hay: According to the USDA, May 1, 2013 hay stocks in 11 western states are down 26 percent year over year. In the Columbia Basin, prices for fair to good quality hay are between $180 and $215 per ton, while prices in Idaho range from $185 to $235 per ton for feeder quality hay. Prices for good quality hay in Eastern Oregon are approximately $210 per ton. Although recent sales data isn’t available for Montana, ample moisture should improve prospects for a large 2013 hay crop.

Fuel costs: The U.S. Energy Department reports average gasoline and diesel prices for June 10 at $3.65 and $3.84 per gallon, up 83 cents and 7 cents respectively from a year ago.

Interest rates: Short-term interest rates are stable, but long-term rates are rising. The 10-year Treasury bond rose approximately 58 basis points (0.58 percent) between March and mid-June.

Northwest land value trends: Northwest land values remain stable to increasing. Highcommodity prices and low interest rates continue to drive farms and ranches growth. Increasedcompetition for leases has also increased rental rates in select areas. Higher grazing rates may becapitalized into increased pasture land values. For more information on land values, visit www.northwestfcs.com/en/Resources/Land-Values.

Outlook

The fate of the U.S. corn crop is the primary variable impacting cattle markets for the next month and a half. A large corn crop will lower feed costs and support rising feeder cattle prices. However, price increases may be constrained by feedlot losses in the near-term. CattleFax recently lowered its 2013 average price forecast for 550-pound calves from $175 per cwt. to $165 per cwt. Prices at this level are profitable for most cow/calf and stocker operations, but too high for most feedlots to realize profits without higher fed cattle prices and/or lower feed costs.

Longer term, lower feed costs and tight supplies should support higher industry prices. Sustained price increases will be driven by demand and a domestic Gross Domestic Product (GDP) growing at 3 percent. Additionally, the cattle industry will need to address feedlots’ and packers’ over capacity. This may result in a slaughter plant closure and some feedlots idling over the next two years.

Learn More

For more information or to share your thoughts and opinions, please contact John Gates at 406-651-1700 or by email at john.gates@northwestfcs.com.