Some landowners diversify as Texas working land declines

As a study documents the changing landscape for land use in Texas, some ranchers have turned to short term rentals of their ranchlands to generate cash. Photo courtesy of Explore Ranches.

FAR WEST TEXAS – Over a twenty year period, Texas lost 2.2 million acres of working lands, with 1.2 million of those being converted to non-agricultural use in the last five years alone,  according to a new study of Texas land trends from 1997 to 2017 by Texas A&M Natural Resources Institute.

In West Texas, some owners and their heirs are looking for innovative ways to keep the land profitable and prevent fragmentation (the break-up of large farms, ranches and forests into smaller ownership sizes.)

As Texas’ population has exploded (up 48% during the study period,) urban sprawl is encroaching on formerly rural areas. Around major cities, land is fragmenting as owners subdivide land and develop it for residential or commercial use.

“Fragmentation, it affects everybody –– not just the rancher, not just the environment. It affects everybody and everything,” said Jeff Davis County cattle rancher and Texas Agricultural Land Trust board member David Crow.

Following the study’s release, Roel Lopez, Ph.D., director of the NRI, explained the environmental impact of fragmentation in Texas, stating open spaces in Texas “provide valuable ecosystem services that we rely on for everyday necessities, such as air and water quality, carbon sequestration and wildlife habitat.”

But fragmentation is only growing, and West Texas’ distance from urban sprawl does not mean it is immune from the breaking up of large pieces of land. Crow noted two other contributions to fragmentation: he estimates the average working rancher in West Texas is now over 50, and acknowledges property values are continuously climbing.

The study’s “fragmentation risk index” is similar to Crow’s thinking. It estimates a “medium” fragmentation risk in Presidio County and a slightly lower risk in Jeff Davis and Brewster, based on the land’s market value, average operation size, future population growth and the age of the operator.

“As ownership sizes decrease, the likelihood of maintaining a profit with traditional farming, ranching, and forestry uses also decreases, facilitating the conversion of working lands to non-agriculture uses,” Lopez said.

As far as the “age of the operator,” Crow said, “The generational transition is going on, and not a lot of younger people are going into the business, so landowners are saying, ‘What do I do with this?’”

Crow explained, “They decide to put it on the market and that breaks up one more ranch.”

But not all of the younger generation are ready to sell just yet. As 4.6 million acres have been converted away from grazing land in Texas over the last 20 years, many are looking for alternate revenue streams to diversify their land’s income –– beyond farming or ranching operations, which have increasing costs for labor and materials and can be vulnerable to unpredictable weather.

Pipeline easements, solar panels, windmills, and oil and gas extraction are some of the common options available. Agricultural tax exemptions have long helped farm and ranch operations, and the state extended tax relief to landowners willing to convert their land to a “wildlife management” classification.

Allison Ryan and her family have a Jeff Davis County property that she said cannot be ranched, doesn’t have oil or mineral rights, and is too rough for a grazing lease. In the past few years, she’s searched for opportunities to make their property financially viable, while still having a “leave-no-footprint” approach.

Ryan began hosting weekend retreats at the family ranch for her personal training clients, and the venture eventually evolved into Explore Ranches, a high-end, short-term rental business Ryan co-founded and launched in December 2018, along with Jay Kleberg and Jesse Womack.

Ranch owners who utilize the rental service can generate a few thousand dollars a night, and guests gain access to ranchlands that are otherwise part of the 85 percent of privately-owned Texas land.

Different ranches offer tours, fishing, horseback rides, culinary experiences and more, capitalizing on a growing tourism industry and the millennial generation’s interest in collecting experiences over possessions, Ryan explained. The site currently offers four tri-county ranches, six more in Texas and a handful across the country.

Crow called conservation easements another tool in the bag to keep large ranchland properties in tact. Landowners taking that approach are donating or selling the development rights to their property, yielding a tax advantage from the government for essentially devaluing the property.

Even if the land is later sold, the development rights are held in that easement in perpetuity, holding the property together and keeping development at bay. “It’s a very serious deal you’re putting together,” said Crow, who noted that the Texas Agricultural Land Trust and Nature Conservancy are involved in putting together these types of easements in West Texas.

Over the past two decades, cropland has decreased by around three million acres, and grazing land decreased by nearly five million acres. At the same time, wildlife management acreage increased by around five million, up from 94,000 acres in 1997.

“As the use of wildlife management increases across the state as a viable land management strategy, the current trend suggests working landowners are utilizing various tools to maintain sustainable operations,” the study concludes.

For Ryan and her family, an interest in conservation and the tax benefits of becoming a “wildlife exemption” led to her family transitioning to that classification. These landowners must provide a wildlife management plan, and do “specific things to monitor the wildlife and encourage wildlife,” Ryan said.

Ryan acknowledges that people buying land who aren’t interested in ranching want to find ways around paying high property taxes, and wildlife exemptions can be an alluring option.

Her father was involved in The Nature Conservancy, and worked with the organization and other landowners in Jeff Davis County and across Texas. “He didn’t want to see it broken up, developed, and see the landscape change. He was super passionate about doing something about that and ensuring that it didn’t.”

“Informed conservation and urban planning efforts should include and target these landowners as well as explore methods to incentivize the continued stewardship of working lands in Texas,” Lopez said. In his statement, the A&M Natural Resources Institute director linked the future conservation of working lands to private landowners who strategically steward these properties.

Editor’s note: David Crow is the father of Editor-in-Chief Maisie Crow.