land market outlook

Seeing 2020: Land Market Current Conditions & Outlook

The longest economic expansion in U.S. history continues to churn out more output and job additions with each passing month. November 2019 marks 125 consecutive months of growth and the momentum factors hint at the trend continuing into at least spring of 2020. Then what? A recession? Not likely, except for one policy error.

Though the populace is intensely polarized politically, as related to the economy, U.S. consumers are indicating high confidence. The consumer confidence index was 125 in September, well above the 100 neutral mark seen throughout 2019. For reference, the index has been under 100 for nearly a decade starting from 2007. The solid expression of confidence about the economy is without a doubt due to the very low unemployment rate of 2.7%, an all-time high in total household wealth in the country as the stock market boomed, and record high real estate values. The prior peak in the net worth of all households was $70 trillion in 2007 right before the last recession, sunk to $60 trillion at the depths of the foreclosure crisis, and then rose to $113 trillion as of mid-2019. Quite an incredible feat, though we should be reminded that wealth holdings have become much more concentrated at the top. All this could mean good things for the land market outlook in 2020.

Consumers consequently are opening up their wallets. Consumer spending rose 2.6% in the second quarter of 2019, after adjusting for inflation, and has been the prime engine for GDP growth over the past few years. Spending on consumer durable goods – with a long product life span – has been even stronger at 4.4%, attesting to the longer- term positive assessment of the direction of the economy. There is no over-borrowing to fuel personal consumption. Finances are coming from an employment growth of 2.15 million net new jobs, rising wages from $27.30 per hour to $28.09 over one year, and higher wealth by a few trillion dollars. Miraculously, there are more job openings today (7 million in August 2019) than the number of unemployed (5.7 million workers).

However, there is not as happy a story for businesses. Corporate profits are indeed very high, especially after cuts to the corporate tax rates a few years ago, rising from $1 trillion in 2008 to nearly $2 trillion now.

This partly justifies why the stock market is near record highs. But even with healthy financial conditions, companies have been less aggressive in spending the cash for machinery, factory expansion, and other investments.

Business investment spending contracted in the second quarter of 2019. Spending on equipment barely changed, but spending on commercial building fell by 4.7% from a year ago. Though assuring no oversupply of commercial real estate construction, the fact that businesses are pulling back is concerning and raising the question as to why.

gdp growth land market outlook

The timing of businesses getting cautious is directly related to the raising of tariffs and hostile rhetoric towards international trade. In fact, many companies in their public statements during quarterly earnings calls say they are cautious because of uncertainty related to trade prospects. REALTORS® specializing in commercial real estate have witnessed that trend as leasing activity markedly slowed in the second quarter to only 3.1% growth compared to better than 10% gains in 2016 and 2017, and 5% gains in 2018. Moreover, even business travel has weakened, as evidenced by falling occupancy rates at hotels, which is now at 72.4%, a full 100 basis points lower than from a year earlier.

The most troubling aspect is the actual slowdown in global trade. U.S. exports fell 1.7% recently while U.S. imports grew by only 2.6%. When both exports and imports decline for a few straight quarters, then a recession is near certain with job cuts. In a growing economy, both exports and imports should be rising by at least 5% per year. This slowdown in trade has had repercussions elsewhere. Just about every notable economy is experiencing slower economic activity in 2019 compared to recent prior years. The International Monetary Fund (IMF) cut its global growth estimate to 3.2% for 2019 after having forecasted 3.6% earlier in the year. The economies of the world appear to move in sync, like a rising tide lifting most boats — and the movement reverses when trade restrictions are put in place. The stock market has nearly always cheered at the promise of a trade agreement and sunk following the rhetoric of a trade war and retaliations of more tariffs. More positively, it is becoming clear that both the U.S. and China are looking for a deal. In such a case, business spending could boom.

One promising sector that could help with future economic growth is real estate construction. America is facing an acute housing shortage – for both single- family owner occupancy and for multifamily apartments. Home prices and rents have been rising far in excess of wage growth for five straight years.

Vacancy rates are at historic lows. The underproduction of new homes over the past decade has cumulatively resulted in around five to six million housing units that are needed today. Even in a normal year, only around 1.5 million new homes can be constructed. Therefore, increased construction needs to occur for multiple years. In 2020, specifically, housing supply is expected to improve, with housing starts expected to hit 1.4 to 1.5 million, up from 1.275 million in 2019.

With home builders still likely to be constrained by what they call the 5Ls — labor, land (lots), lending (financing), lumber (raw materials), and restrictive laws (regulation) — housing starts will still not match the demand from household formation (1.2 million), or the replacements for demolished or obsolete housing (about 450,000). All that means more demand for land and lots.

“…more demand for land and lots.”

In the commercial market space, industrial properties have outperformed retail spaces, arising from the stronger growth in online shopping and quick distribution warehouse needs. Investors are paying much more for industrial flex/warehouse properties on account of low rental vacancy rates and the sustained demand for e-commerce sales. Given that warehouses can be built in off- center sites far away from downtowns and population centers, the demand for land will grow in outlying regions.

In the meantime, the interest rates will be at near historically favorable conditions. The Federal Reserve will more likely cut its fed funds rate a notch in 2020 rather than increasing. It just means that 10- year Treasury yields will remain low at around 1.6% and the longer term borrowing rate at under 4%. In future years, watch what happens to the federal deficit, which is expected to be near $1 trillion in 2019 and projected to surpass $1 trillion in 2020. The total federal debt level, adding of all past deficits, will reach 100% of GDP in a few years, well above the 60% that many economists consider as manageable.

The bottom line summary is that while the economy is experiencing the longest running growth period in U.S. history, there is no reason why it has to falter. The economy is expected to finish 2019 with only moderate growth of 2% due to soft business spending activity, after having notched up a solid 2.9% in 2018. For 2020, a recession is not in the cards, but this assumes some type of truce in the trade war. A trade agreement will be better still and will lift business spending.

“…expect continued job creation, income growth, and rising demand for land.”

Construction spending has to rise to relieve housing shortages and low vacancy rates in commercial real estate. Therefore, expect continued job creation, income growth, and rising demand for land.

Lawrence Yun NARAbout the author: Dr. Lawrence Yun is chief economist and senior vice president of Research at the National Association of REALTORS®. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1.4 million REALTOR® members.

land evaluation checklist

A Checklist For Evaluating Land To Purchase

I was recently reading an article about tasks to perform after buying a tract of land. I decided to develop a list of topics to consider for those evaluating land to purchase before buying any land to help when comparing properties to ensure you buy the best property. We have all heard about buyer’s remorse, so it is important to consider the following before you make that important purchase.

1. Access – How is the property accessed? You may have road frontage or an easement. Is the easement prescriptive or deeded? I would not be comfortable buying a tract with a prescriptive easement and long term verbal agreements are often forgotten about by inheriting heirs.  These prescriptive easements can be converted to a legal or deeded easement, but be prepared for a court battle and legal fees.

I work in a county where there are a lot of transitional properties, so access is key. The county requires that each parcel of land have at least 50 feet of road frontage on a county road or state highway. If you are buying for investment purposes and are planning to subdivide the property, lots of road frontage is important. Check with the local county planning and zoning folks beforehand.

flood plain

2. Flood Plain – These are soils that typically flood after a huge rain event and it affects the utility of the property. I used to manage 85,000 acres of land for a timber company. We categorized property by inoperable and operable acres. The inoperable property was generally Streamside Management Zones and Flood Plains. The utility of the property affects the value. This information is readily available and your real estate agent should provide this information.

Also these areas will not support a conventional septic system. If you are buying land to build a house or cabin, know where these flood prone areas are prior to your purchase.

3. Topography – I have written a blog post about Topographic Maps. Like flood plains, topography can affect the utility of the property. Very steep property is not conducive to farming and logging. Be sure to look at topo maps of the property and nothing can substitute walking the property. Take a close look before you make that important purchase.

4.  Neighbors – With all the technology out there, it is pretty easy to determine who your neighbors are. I can access this information from the tax assessor website. You might be interested to know if they live on the property or if they are absentee landowners. Could you imagine buying a tract of land to learn later that a waste management company owns the property next door? A little work up front can save you lots of heart ache later on.

5. Property lines – I have written a blog post about maintaining your property lines. All landowners should mark and walk your property lines on a regular basis. It is a good idea to know where they are, especially before you buy. If a neighbor is encroaching on the property you need to alleviate the problem. Property lines that are maintained and painted provide a visual aid to your neighbors so everyone is on the same page and knows where the property lines are!

soil type

6.  Soils – In certain areas of the country, soils and soil productivity drive price. Farming (tillable acres) land is evaluated on the productivity of the soils. Most of the property in West Central Georgia is timberland and this can be evaluated based on Site Index. When buying timberland, operable acres and site index should be considered.

7.  Survey – This is huge! I will tell you about two tracts of land I have been involved with recently. These are real life stories. I was contacted by a landowner who had property in Harris County, GA. They solicited my help on a timber sale and later contacted me to sell the property. The tax assessor showed 170 acres and I told them they had more and suggested having the property surveyed before selling. The survey yielded 213 acres…advantage Seller!

In another situation, I was contacted by a Family Limited Partnership. The property had been in the family for 3 generations. The property was beautiful and the timber was over 60 years old. The family had an old plat from the 1920s from Columbus Power and Electric who built Lake Harding. The lake is now owned by Georgia Power and they own up to the 525 foot elevation. They were paying taxes on 236 acres. I estimated about 185 acres and arranged to have the property surveyed. The survey yielded 176.6 acres.

If you buy or inherit property, have a survey, you need to know what you own. These are both also a great examples of why it is important to work with a real estate agent that specializes in land transactions in your area.

8.  Timber Cruise – Timber cruises are important when buying timberland. First of all the amount and type of timber helps when valuing the property. Secondly, the timber cruise will help when conducting cost allocation on the property. This is the process where you assign value to the timber and the dirt. Cost allocation will save you lots of money when the time comes to thin or harvest your trees. You will pay taxes on the capital gain (revenue less depletion).

Interested in purchasing a land property? Land transactions require specialized expertise from an agent, like an Accredited Land Consultant (ALC), with experience and education in the industry! Find A Land Consultant near you for expert advice.

This post was originally published on The Dirt Blog.

Kent Morris, ALC, is a Registered Forester and Associate Broker who has experience in fields such as timber appraisals, harvesting, thinnings, and timber sales.

new mexico land

Why You Need a Qualified Land Agent For Your Transaction

Buying or selling land can be a complicated business, and prospective buyers and sellers must be sure they have a qualified land agent who not only has their best interests in mind but also the knowledge and experience to make it happen.  In Southeast New Mexico, where I am located, we often jokingly say we have more cows than people.  Some of the more recent statistics suggest this may no longer be as true as it used to be, at least when judging the entire state as a whole, but for the most part New Mexico is still a very rural state, deeply rooted in its ranching heritage.  The fifth largest state in the U.S., New Mexico offers vast wide-open ranch land, gorgeous sunsets, and breathtaking scenery, stunning even at times in its vast nothingness.  Even with all that immense ranch land surrounding us, land brokers in New Mexico are hard to come by.  It makes for an interesting conundrum in a state you would expect to be chockfull of land brokers, given how much land there actually is.

new mexico land

Land transactions gone badly are said to make up one of the largest percentages of all the total E&O (Errors & Omissions Insurance) claims in the state.  Why is that?  In the case of New Mexico, much of the reason is that there are so many agents not trained in land transactions trying to complete one as if they were a land expert when, clearly, they are not.  Sadly, most of them don’t even think twice about it until it’s too late and the damage has been done, thereby resulting in the E&O claim as part of a potential lawsuit or settlement.

The reasons are varied and complicated but, despite having more cows than people and being surrounded by vast ranchland, the majority of real estate agents in New Mexico are trained as residential agents with the rest being commercial but not commercial specific to land.  This is not limited to New Mexico, and occurs in most other states as well, but it is rather ironic in a state made up predominately of ranchland to have so many agents trained in other specialties but not land.  The result is there are a large number of agents who are not prepared for the complexity that a land transaction brings with it, lacking the specialized expertise that is required for such a transaction.  In fact, many people, agents and customers alike, see land as being a simple transaction.  The thought process seems to go something like this: if there’s no house, then there’s no inspections, no repairs, and nothing to nitpick so it should be easy and fast-what could possibly go wrong?  Unfortunately, many things can go wrong and an agent who is naïve of all those possibilities generally only creates more problems.

expert land real estate agentThis is exactly why you need an expert land agent for your land transaction.  Residential and even general commercial agents are often oblivious to the challenges of land.  Too often they may have spent their entire lives living in town and don’t understand the basics of water wells or septic systems, or that electricity isn’t just automatically available anywhere and everywhere on demand and that, even if it can be hooked up, the cost may be exorbitant and entirely prohibitive.  Those are just a few of the issues that must be explored when a prospective buyer decides they want a simple country home.  For an actual working farm or ranch, it can become so much more complicated.  The bulk of the land in western states such as New Mexico is state or federally owned, meaning those leases must be negotiated as part of a sale as well as any private leases that may also be included.  Water rights issues, mineral rights issues, and easements just to name a few must also be considered as well as countless other complexities unique to the land like soil types.  As mentioned at the beginning of this article, land agents are not always prevalent so finding one can sometimes be a challenge in and of itself, especially in a rural area such as New Mexico.  Putting the time and effort into finding the right agent is of absolute importance as it will determine the entire outcome of the transaction whether you are the buyer or the seller.

Here are a few tips to get you started on finding a qualified land agent:

  • Make sure they are experienced and have the resources to deal in your type of transaction. This means finding a farm and ranch broker for farms and ranches, transitional land brokers for subdivisions, timber agents for timberland, and so on.  Be careful not to confuse a general commercial agent for being able to handle your land transaction.  The word commercial typically means in-town businesses, not necessarily land. So if you do decide to hire a commercial agent, make sure they are the right type of commercial agent.
  • Big name brokerages are not always better. Unless they only deal in land transactions, a big name brokerage may be a very dangerous thing, so be cautious if you decide to go this route.  If you are considering using a larger brokerage, see if they have a farm and ranch or commercial division, Most of these brokerages are primarily residential and the agents may not have the experience needed to successfully conduct your land transaction.  If you call or walk in wanting to list your multi-million dollar ranch for sale, you do not want to get an agent who got their license last week that has never done a land transaction before and who just happens to be on call today.  Make sure you are working with a reputable agent, not just a company name. There can be a big difference.
  • Big name Realtors® are not always better. You may find you recognize a name but is it a name known for the type of transaction you are wanting to do?  They may be good at what they do or do a lot of marketing. However, if they aren’t knowledgeable in your specific transaction type, you may actually end up worse off than if you’d gone with a less recognizable name but who had the relevant experience and expertise to handle your property type.
  • Remember your goal of buying or selling. A brokerage or agent may have a lot of listings which makes them seem more prestigious.  But, are those listings like your listing? And are they selling?  If not, why not?  If you are trying to sell, do you want your property sold and closed, or do you just want it listed or tied up in escrow?  Find the agent who can get it done by asking to see a track record of successfully completed land transactions like your own.  There is a big difference between listing properties and selling  It’s easy for an agent to make lofty promises that they can get a certain price or can make this happen or make that happen, but is it reasonable and can they actually do it?
  • Find an agent who has connections and isn’t afraid to use them. None of us are experts on everything.  No two transactions are ever the same so no matter how seasoned or experienced, it seems there’s always something new or unexpected.  Find the agent who has a large network and isn’t afraid to consult others for opinions and seek help when they aren’t sure of something – and who isn’t afraid to admit they don’t know everything.
  • Use a local agent if possible. As long as they have the experience required, a local agent is typically best because they are familiar with and know the nuances of the area and they are readily available. However, if the local agent is not as experienced in your type of transaction, you may be better off with someone who has more expertise outside of the local area.  Sometimes, the best case scenario is to have one of each.  In this case, find either a local or non-local agent and then request that person team up with the other.  Agents do not have to be from the same office in order to co-broker a deal.  When you have one of each, you can pair one agent’s local expertise and availability with the resources and knowledge of the non-local agent to create an amazing team that can work for you in a way that neither party could do on their own.
  • If you still don’t know where to start, consult a resource such as the Realtors® Land Institute (RLI), www.rliland.com, which is a nationwide organization of land brokers. With over 1,300 members across North America, and over 500 of them holding the elite Accredited Land Consultant (ALC) Designation, RLI can connect you to an expert in your area. And that expert, by virtue of their membership in RLI, has access to a network of other members in RLI who can and will provide expert advice as needed as well as open up a whole new pool of potential buyers. You can even use the free Find A Land Consultant search tool on their website to find a qualified land agent near you.

Author Bio: Beth Myers is the Qualifying Broker/Owner of Rafter Cross Realty, LLC, located in Lovington in the Southeastern corner of New Mexico.  Beth is a former educator holding a Bachelor’s degree in Business with three majors, two Master’s degrees, and a Ph.D. and having taught nearly everything from kindergarten to college level before transitioning into real estate and eventually opening her own brokerage.  Now she is a multi-million dollar annually producing agent/broker in her small town and the surrounding areas, specializing in residential and farm & ranch sales.  She serves on the local, state, and national levels, as a Board Member and Treasurer for the Lea County Real Estate Professionals, a Board Member for the New Mexico Multiple Listing Service, and as a Committee Member for the Realtors® Land Institute Future Leaders Committee.

hiking recreational land

Need To Knows For Buying Recreational Land Right Now

America is a land of wide-open spaces and with all its natural wonders how can you ever decide where to buy? What do you need to take into consideration?

My first consideration is made when considering the recreational opportunities desired. it sounds basic but you’d be surprised how easy it is to forget at the start that you need to have an end in mind. For example, for whitewater rafting you have got to have a river or if trophy whitetails make you heart race, let’s talk about deer habitat. You can’t have hiking trails without land anymore than you will have trophy bass without water.

bass fishing recreational property

Now that you have a idea of what you want to do with your time lets talk about how you get there.

I would recommend you start your search by talking with a Accredited Land Consultant (ALC) – find a land consultant. These are men and women that have spent years in the land business, completed education to enhance their ability to handle land transactions, and are masters of all facets of land sales. Most are outdoors man who live the lifestyle as well, hunting, fishing, etc.

If you decide that you want a property that can be managed for trophy deer your ALC will help you determine if the property you are looking at has the qualities it will need. Perhaps you will need a private wildlife biologist, or maybe you’ll need a heavy equipment operator that can clear travel lanes or create a pond for year-round water.

If you are considering buying a parcel that is in a national forest, have you considered all the recreational opportunities that just outside your door? Most national forests allow hunting and fishing on their lands as well as ATV trails.

If you are a fly fisherman, there are thousands of miles of private land with trout streams running through them. Imagine what a legacy you will leave behind if three or more generations all grew up fishing the same stream at grandpa’s place.

This just a drop in the bucket of all the different exciting opportunities that exist beyond the sidewalks and streetlights. Happy hunting!

About the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017 and is currently a member of their Future Leaders Committee.

 

kasey mock

About the Author: Kasey Mock is the Director of KW LAND Division at Keller Williams Realty International. Mock is a member of the REALTORS® Land Institute now serving on their Future Leaders Committee. Make sure to check out his break out session diving further into this topic at the 2018 National Land Conference in Nashville, TN, in March.

tree rotted

Does Your Land Need Curb Appeal to Sell?

Curb appeal – you’ve probably heard the term thrown around in the residential real estate world. Curb appeal refers to how attractive a house (or property, in this case) looks to potential buyers. It’s usually the first impression someone gets when they initially see a property. For residential real estate, the appeal of a house is something that’s very important when potential buyers are browsing, but does this concept apply to land? The answer is yes!

When putting a house up for sale, the owner will want to make sure exterior conditions of the house are in good shape. There are usually a lot of tasks that go into this process such as replacing old siding or adding a coat of fresh paint on window shutters. The same thing goes for adding curb appeal to land. While you probably won’t be doing much (if any) painting on a pasture or timber property, you’ll want to take care of some details such as overgrown grass or fallen trees that are rotting.

broken fence

If you frequent your property and keep up with yearly or seasonal maintenance, you won’t necessarily have to worry about curb appeal come time to sell. But if you’re a landowner who lives far away or just hasn’t had a chance to bush hog recently, there are some to-do list items to get to.

Here are some things you can do to boost curb appeal on your property before selling:

  • Make sure trails and paths are clear
  • Mow overgrown pastures and fields
  • Clean up large debris and brush piles
  • Add or repair fences and/or gates
  • Add food plots for wildlife
  • Plant native grasses, wildflowers, trees and shrubs
  • Fertilize weak or bare grass spots

These are just a few ideas that can help a property give a good first impression to prospective buyers. However, keep in mind that each property is different. While some of these tips could apply to one property, they might not apply to another.

If you’re interested in finding out more about what you can do to boost curb appeal and get your property sold quickly, reach out to your local land professional!

About the Author: National Land Realty is a full-service real estate brokerage company specializing in farm, ranch, plantation, timber and recreational land across the country. NLR currently represents land buyers and sellers in 20 states. To learn more, visit www.nationalland.com.

farmland

Has Wall Street Abandoned Farm Producers?

The Chairman of the Federal reserve told a group of senators that in spite of the deterioration of the farm economy, banks are in good shape to make ag loans. This is in stark contrast to the top 30 banks showing a nearly four billion dollar decline in agriculture loans held in there collective portfolios. For example, back in 2008, JP Morgan began growing its ag holdings which reached nearly 75% by 2015. Now, with incomes being reduced and Chapter 12 bankruptcy filings on the rise, they seem to be pulling back from the farm economy despite what the Federal Reserve Chairman says.

Many rural banks are now in a hard spot having to turn away longtime customers because they cant accept any more risk on there balance sheets. However, this may well force some of these producers into the Chapter 12 that the lenders fear. This is reflected in FDIC reports that 1.5% of farm loans were 90+ days late or lenders had stopped charging interest because they were nonperforming and not likely to be paid as agreed.

If you have a local bank that is still lending, shake their hand because they are having a hard time as well!

About the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017, serving on the 2019 Future Leaders Committee.

 

 

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flooded field

Thoughts on Flood Recovery for Farmers

With record floods receding all along the Missouri river valley, producers are facing a daunting clean up. With sand up to five feet deep deposited over thousands of acres of land, when it comes to flood recovery, how do you clean it all up?

Before we discuss how to clean it up, you may be asking “Why do I need to worry?” After the 1993 floods, many producers attempted to just plant in their field as they always had. Some areas didn’t produce, and most that did dropped from 75 bushels per acre to about 15 bushels. No one was happy about that and we started looking for ways to get our fertility back.

Federal disaster grants are available to help with cost, but they are capped at 75% of the fair market value of the land before the flood.

flood recover farmland

First, you must remember that the U.S. Army Corps of Engineers prohibits dumping it back into the river channel. They consider it contaminated, preventing its introduction back into the river. For areas with less than a foot of sand deposits, deep disking is usually the most cost-effective way of dealing with it. This will turn up some organic material for our soil.

Now. to address areas with sand from one to ten feet we turn to a track hoe. With a 180-degree swing, and bucket widths up to 5 feet wide, you can reach down and get the good black dirt. Once you start, a large machine can turn over nearly an acre per day.

This works out to about $2,500 per acre for the rehab cost but, at 70 bushel beans vs 15 bushels per acre, it seems like the only approach that works. If the land is now only worth $2,000 per acre, but you bought it for $5,000 per acre years back, it must be productive enough to cover the loan. So, we continue to rehab section by section to restore the value to this once fertile delta.

About the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017, serving on the 2019 Future Leaders Committee.

Cannabis

Concerning Cannabis

In 2012, the citizens of Colorado voted decisively to become the first jurisdiction in the world to allow legal adult possession, use, growing, and retail sales of cannabis (marijuana). Colorado has had legal medical marijuana since 2000. The 2012 amendment to the Colorado Constitution (Amendment 64) also set forth retail marijuana sales rules, a taxing structure that provides for revenue to schools, public and youth education regarding cannabis, and the production of industrial hemp.

Colorado became ground zero for cannabis reform and many other states and municipalities have since been looking to Colorado for guidance and example. Colorado citizens, in greater numbers all the time, have supported this groundbreaking change and the legislature, regulators, and industry have been working diligently to construct a business and legal framework within which to operate.

Cannabis reform is also sweeping the nation. Thirty-three states and the District of Columbia currently have passed laws broadly legalizing marijuana in some form, and the 2018 Farm Bill set the framework for legal industrial hemp nationwide. This movement will continue and the Federal government will catch up or be forced to approve and adapt in time as reform states lead the way. The latest Gallup poll on cannabis shows 66% of all Americans across the board support full legalization of this ancient plant. Canada has had legal hemp since the 1990s, and last year they legalized marijuana nationwide.

hemp

Colorado has managed this matter pretty well by writing good laws, monitoring the law’s status and effects, and adjusting regulations as needed to mitigate unanticipated issues for regulation and law enforcement while addressing the needs of the ancient industry. The entire conversation has changed in our state – fewer talk of fears and pot jokes and more talk of business opportunity. In short order, legalization has brought about normalization. For example, in Denver proper, there are more dispensaries than Starbucks.

Retail cannabis sales in Colorado began in 2014. Last year, the adult use (recreational) sales alone topped $1.5 billion, with tax revenues of over $266 million in calendar year 2018. Since 2012, the cannabis industry has created over 2,500 new jobs in the state; jobs that are home grown (pun intended) and won’t be exported overseas.

Colorado studies have shown little impact to law enforcement due to adult use, declining use by youth under 21, increased tourism, and tax revenues in excess of predictions. Appropriately, marijuana is regulated by the Marijuana Enforcement Division of the Colorado Department of Revenue and industrial hemp is regulated by the Colorado Department of Agriculture.

Other states have recognized the futility and costs of cannabis prohibition and are beginning to realize that it is a product that is best regulated, taxed, and properly controlled rather than treated as a criminal matter. Idaho, Kansas, Iowa, Texas, Nebraska, Wisconsin, and South Dakota are the remaining states that have resisted cannabis reform and several of those are either reexamining their status or have citizen-driven initiatives attempting to modernize the regulations in their jurisdictions.

Current legal retail marijuana sales in the US are approximately $6 billion. With recent legalization in California and Michigan, those figures are expected to grow exponentially. The estimated total marijuana demand in the US (including black market) is $50-$55 billion, which is the potential under nationwide legalization. The hemp products industry is hovering around $620 million and is estimated to exceed $5 billion by 2020. Clearly, this is an exciting growth industry with much opportunity. There are numerous impacts of the changing laws to the real estate industry, including land brokers, and it is a billion plus dollar industry that should not be ignored.

“Thirty-three states and the District of Columbia currently have passed laws broadly legalizing marijuana in some form, and the 2018 Farm Bill set the framework for legal industrial hemp nationwide.”

At some point, it is likely that we as real estate brokers in reform states will encounter a cannabis issue in the course of daily business. It could be an inspection issue for a home grow, a request for cannabis appropriate properties, warehouse or retail facilities, leases, hemp production farms and processing, or a myriad of other possibilities. Whether this poses a difficulty or an opportunity, you should be aware of the rules and regulations of the industry.

Hemp and marijuana are the same plant: cannabis sativa. The cannabis plant contains over 60 compounds known as cannabinoids which are unique to the plant. Hemp is a variety of cannabis sativa that contains less than 0.3% of delta-9 THC (tetrahydrocannabinol), the component of cannabis that produces the high from marijuana.

cannabis field

Hemp has been a historically important crop and was widely used in industry prior to being made effectively illegal under the Marihuana Tax Act of 1937 and rendered completely illegal under the Controlled Substances Act of 1971. Hemp has a long list of useful applications: fiber, cloth, paper, oils, plastics, lubricants, cosmetics, food products, bio-diesel and ethanol, insulation, and building materials. It has more than 25,000 documented uses, but will not produce a high.

Industrial hemp was first addressed in the 2014 Farm Bill, which allowed interested states to establish programs for research of propagation, growing, utilization, and marketing of hemp. The first seven states that chose to participate gained a head start in developing a robust hemp industry.

The 2018 Farm Bill, passed last December, made major changes to the law:

  • Defines hemp as any part of the cannabis plant containing 0.3% THC
  • Removes hemp, as defined, from the Controlled Substances Act
  • Provides that raising hemp will not impact participation in Farm Service Agency programs
  • Provides that hemp can be included in Federal Crop Insurance programs
  • Requires each state to propose a state plan or operate under Federal rules
  • Allows states to opt out of hemp production
  • Allows interstate transportation of hemp and hemp products

The passage of the new 2018 Farm Bill has really energized interest in the crop; however, full codification, rule writing, and promulgation and implementation of all elements of the new law will take time. Most Federal rules will not be complete until the 2020 crop year, and some issues like crop insurance could take longer. Some farmers have tried hemp production and have decided to wait until the rules are clear and the markets settle before planting again. Processors are still catching up with growers, leaving some farmers with a harvested crop with nowhere to go. I always advise a producer to secure the sale before planting the seed.

The hemp plant has about a third less moisture and nutrient requirements than corn and far less, if any, pesticides. It is an annual plant that grows rapidly to a height of 8 to 12 feet with large seed heads, a fibrous stalk, and tap root. About 40% of the plant material is returned to the soil, adding organic matter. Hemp is a dicot plant with a deep tap root that improves soil aeration and water permeability, particularly in compaction prone soils. The crop is harvested for seed (used as seed stock and a source of oils and food products), fiber (for cloth, paper pulp, rope, insulation, building materials), and production of CBD (cannabidiol), a non- psychoactive substance used medically to suppress seizures, reduce anxiety, pain relief, and other uses. The cannabis plant is resilient and grows well in several different soil types.

As commodity prices for traditional crops remain at 30-year lows, hemp is poised to be a viable, productive plant for continued agricultural production and has raised major interest from all sectors of the agriculture industry. Every hemp meeting for farmers that I have attended has been a standing room only crowd. Approximately 78,000 acres of hemp were grown in the US in 2018. Of that, 70% was grown for production of CBD; 10% for grain; 10% for fiber; and 10% for other uses or crop loss. Some states have opted out of hemp production so far, including Kansas, Nebraska, and Idaho. Over exuberant and uninformed law enforcement has caused several instances of hemp transporters being arrested and detained on marijuana charges. These arrests are examples of some of the rough spots that may occur during the transition to a legal cannabis economy.

I have developed a four-hour course entitled Cannabis Country that goes deeply into the topics addressed here plus an in-depth history of cannabis prohibition, the multitude of uses of the plant, phytocannabinoids, endocannabinoids, legislation, propagation, markets, and the future of cannabis in the US. Watch for it near you or contact me for information and scheduling.

This article was originally published in the Summer 2019 Terra Firma magazine.

Kirk Goble, ALCAbout the author: Kirk Goble, ALC, has been a Colorado licensed real estate broker since 1988 and founded The Bell 5 Land Company in 2000. He specializes in farm, ranch, land, and water brokerage. He is a member of the National Association of REALTORS®, The Greeley Area REALTOR® Association, and the REALTORS® Land Institute. Goble was awarded the Land REALTOR® of America by the REALTORS® Land Institute in 2013 and is a LANDU instructor for RLI.

Wildlife Management 101

This article on wildlife management was originally published in the Summer 2016 Terra Firma Magazine.

When learning that RLI had an interest in publishing an article on wildlife management, I have to admit, I was more than hesitant.  My reservations didn’t stem from a “lack of knowledge”, my reservations were derived from “the knowledge I have,” and the criticism I’m aware it may attract. Success doesn’t come easy, nor without trial and error or a failure or two, and sometimes it doesn’t fit within a traditionally accepted box.

Wildlife management consists of so many factors, that the series of books, videos and blogs about the subject are literally overwhelming.  Politics, legislation, social perceptions and opinions, environment, mathematics, chemistry, biology, regions, species, habitat and disease are all just a few on a lengthy list of complicated factors that affect managing wildlife.

In a nutshell, wildlife management is ultimately about conservation; the guardianship and best practices of safekeeping our greatest natural wild resources for future generations.

wildlife forest

It also provides an extraordinary enjoyment through a passionate relationship between land and property owners, and justifiably continues to be a motivating factor for folks who purchase land!

I’m extremely fortunate to own, manage and control a respectable tract of leased and deeded ground in the Pacific Northwest.  Taken with a laugh, my personal experience, hasn’t been learned easily, nor done inexpensively via traditional venues.  Private land wildlife management practices are commonly dominated by Whitetail deer, a little waterfowl and an occasional fish or upland bird topic.

To be candid, the folks in the Midwest and down South are hands down, far ahead of the curve in regards to wildlife management.  Whitetail deer are routinely the primary topic of choice.  Justifiably, the Whitetail deer geographically dominate North America by the location they reside.  Non-profit and traditional organizations such as the Quality Deer Management Association (QDMA) and Tecomate have done a fantastic job of promoting and making wildlife management materials available.  However, I humbly believe, the Whitetail species is a much easier species to manage than many others, and another reason why I chose to write on this subject.

I know, I know… I’m sure I’ll never live that comment down (laugh). Okay, how about this, because there’s more information available on Whitetail wildlife management, justifiably because it’s the dominate non-migratory game in North America, I feel they’re easier to manage and understand (and should be) than other species with less availability and a broader migration range… and they’re easier to harvest than blacktail deer… KIDDING!… sheez… relax! Just trying to keep ya’ll interested in reading!?

In the early 2000s, after reading an in depth QDMA book, frequenting blogs, watching videos and living the lifestyle we sell, I made the commitment to start managing wildlife on our family’s ground about forty minutes outside of town.  Easy right? Just install a few food plots and feeders, develop water sources (if they’re not already there) and voila, the wild game will come flocking in!  Yeah? Not so much!  As with many topics in life, a person can read all the books they can find, but real life experiences, both good and bad, are the world’s best teachers.  In general, the basics are the same: provide a superior food source, water, and lush habitat. Doing this, is without question, enticing to wildlife.  The primary difference between my management practices and traditional wildlife management practices are dictated by my region.

food plot wildlife management

The wildlife management industry started to flourish in the early 2000s. Game cameras were few and a new “hot item” and feeders were on hunting shows everywhere – plus, they were all over the internet.  Ever hear the saying, “Never test the depth of a river with both feet first”? That’s good advice! My original thought process was methodical, and focused on the generals; to enhance food, water and habitat within drainages that naturally lent themselves.  Logically, it made sense to research and purchase available products that have worked so well for others?  So I was off… Feeders! Cameras! Food plots! …and all the associated equipment!

Little did I know that I was in for a completely different education, and all the equipment would eventually be destroyed with minimal results of what I was trying to manage–big Blacktail deer, elk and turkey.  The failing factor wasn’t a lack of genetics, nor wildlife population.  It boiled down to my regional location, and the lack of experience managing wildlife in this location.  Our terrain isn’t flat to rolling like the South or Midwest, where flatter open plains and pockets of creek bottom thickets monopolize regions.  It’s the opposite where I manage wildlife.  We have timber covered mountains, drainages and ridges as far as one can see; small pockets of open meadows monopolizing the terrain in hopes to get a glimpse of something.  That situation also positions the ultimate unmanageable factor; multiple species of wildlife, including and not limited to, abundant predators!  Most importantly, learning how and where those species habituate throughout the year and how to best manage my terrain and climate was a game changer for me.

predator

Being new and few, the first few game cameras I purchased were “top of the line,” nothing but the best… HA! I’ve never been accused of catching on too quickly. After countless dollars in cameras being destroyed, no matter how well I concealed them, a light came on in my head: never set a trail camera after eating without washing and deodorizing your hands in Black Bear country! Their eyesight is poor in comparison to their smell and hearing. Regardless of what slight scent is on my hands when I set cameras, they’ll wind it–and evidently, bears think trail cams taste like chicken!

 

black bearTraditional feeders? UHG! My three-hundred pound metal feeders were knocked over, ripped open and crumpled up like cheap little tin cans. It’s unbelievable how strong Black Bear are! So, I improvised by designing and installing “Bear-proof feeders”. Ah-ha–Gotcha! Only to learn that feeders, if used too consistently, work like a dinner bell for our abundant mountain lion and predator populations.  Luckily, I check my cameras frequently, and DID catch on quickly BEFORE witnessing any lion kills on camera. Embarrassing as it is, at first, I was like, “hey, there’s another mountain lion on camera? I didn’t know they’d come into feeders also after they go off?” Then, a Wait!? Ruh-Row-Shaggy! light bulb came on.

So I now only use the feeders, installed in different drainages, sporadically throughout times of the day and week and primarily during the winter when natural feed and food plots sources are dormant from deep freezes and snow.

Late fall, winter and into the spring are the most crucial times of year for wildlife management in my opinion. The does are pregnant and bucks are either rutting or later shedding their antlers.  It’s truly the best time to provide a solid protein source, vitamins and minerals to the males for recovery, during the rut and horn growth before they migrate to higher elevations. While essential nutrients to impregnated momma’s throughout the birthing and nursing process is pertinent.

All that being said, the most productive source of wildlife management that I’ve consistently witnessed by all types of wildlife are my licks.  The food plots are nice, but there are a lot of natural competitive sources for deer and elk to browse in this area. Ours are primarily frequented by does and younger bucks while the mature ones are at a higher ground, only passing through.

My licks aren’t the blocked type purchased and shipped online.  Those don’t last long around here.  Bear will pick those up and even haul them off like little tennis balls in their mouths or sometimes eat them in one sitting like candy.  I use a formula I found online years ago, posted on a blog by a retired biology teacher out of Missouri, called “Mo’s Lick”.  I’d sure like to reconnect with that gentleman again to thank him and follow up.

He’d posted a detailed story about only being able to afford a five-acre tract of creek bottom ground to lease and hunt on.  He knew there were good genetics in that region, but relying on those deer to reside within his creek bottom without purpose was an unreasonable hope.  Similar to our mountainous country, his tillable food plot ground was limited by access and terrain.  So, in turn, he started his own biology project using licks.  His first deer harvested, and a common size in that thicket scored in the one-hundred and twenty inches, if I recall.  By the fifth year, he’d harvested a one-hundred and eighty-six inch Whitetail!  He never concluded whether he’d thought the original smaller deer were just young, underdeveloped and grew into mature bucks being under nourished prior to his lick supply or if the previously mentioned mature, good genetic bucks from the region frequented and resided his creek bottom more often because of the licks.  His only conclusion was, he’d leased the ground for several years prior, constantly scouting smaller bucks.

After several years of consistently using the “Mo’s Lick” formula, the average buck’s antler size changed dramatically and more consistently within that thicket.  I have used Mo’s lick since, and found great results.  I have pictures of all species using Mo’s Lick: squirrel, fox, turkey, elk, deer and more.  However, once again, our regional terrain plays a big role in consistency.  We don’t routinely see the same bucks over and over like many Whitetail managers.  When fawns hit the ground and the weather starts warming, the Blacktail deer bachelor up and head for higher elevations where it’s cooler–typical males, right? Babies are still young and can’t travel the distances or terrain that mature bucks go each summer.

deer

In turn, I know what I call “my girls” by name when I see them on camera as spring progresses.  I keep a fawn count, who’s had how many, a buck to doe ratio and so forth, while watching them grow up, or disappear to predators–when Mama appears on camera at the lick or food plot alone later in the year.  By the time the babies are strong enough to make the migration to higher ground, fall is upon us again, days get cooler and the need to migrate higher becomes less and less desirable.

As winter storms blow in and the rut approaches, the mature bucks start heading to lower ground.  Depending on which direction the storms blow in and the amount of snow that falls on which facing slope, this can dictate the drainage taken by those mature bucks over previous years. (Bear in mind, our ground isn’t flat, a grid of one-hundred and sixty acres can be three-hundred and twenty plus acres of surface ground, it’s just not flattened out on grid view). The younger bucks stay local for a couple years. Then, start to migrate each spring with the other mature bucks as they mature.  Every year we get mature bucks on camera that we’ve never seen before, and likely may never see again.

Cattle have been known to do similar.  Oregon is an open range state.  We’ve often had cattle in our drainage, with tags belonging to a rancher whose range is three drainages over.  As feed thins, they start heading down the drainage they’re in.  Oregon is extremely diverse.  I’m aware of an area, ten miles away as the crow flies, that buddies of mine manage who find the same deer sheds every year…?  Those deer also migrate and only frequent the area in late fall and shed in winter.  The difference is that there’s really only one major drainage option, a highway and a river that I believe naturally funnel those deer back every year.

For me, the wildlife management learning curve has been an expensive and dedicated commitment worth every second and cent spent.  My advice is that there is no perfect solution or magic wand in managing wildlife.  If there was, the book would have been written and no more needed. Consider your terrain, species and the final results you’re seeking to obtain, before buying a bunch of things that have worked well in other regions and species.  Don’t get me wrong, I’ve used, continue to use and try new wildlife management products all the time–because they work! However, keep in mind that each area possesses different circumstances.  Talk to others in your region that have been successful. What’s worked for my region, may not work for your region.  Most of all get out and do it, enjoy the process. Management practices can change, but the goal should always stay the same.  Best practices of safekeeping for our greatest natural wild resources, for future generations.

Mo’s Lick Recipe

deer lick recipe

(1) 50lb bag of Di-calcium phosphate (21% or more)
(1) 50lb bag of Trace Mineral Lick (fine)
(1) 50lb bag of Rock Salt (fine)

Dig a hole near a year near a water source, pour and mix ingredients well. I’ve added Selenium to the mix in higher elevations and received a good response from Elk also.

 

 

Thank you for taking the time to read my article and best of luck!

About the author: Garrett Zoller, ALC, is the Managing Principal Broker of Record, and a founder of both LandAndWildlife.com and LandLeader. Garrett’s hands-on experience in the development of real estate, with strength in rural and commercial properties, administers an expert knowledge of recreational, agricultural and timber real estate.

 

The Surprising Benefits of Common Farmland Pests

There’s plenty of good reasons for landowners to have their guard up around pests. Pests can cause devastating losses to crops, can kill livestock, and generally wreak havoc on the health of your land. However, some creatures with reputations for being pests can actually do more good than harm for your land.

Snakes

Snakes are one of the most common fears in America. Not only do they look scary, snakes have the potential to be deadly. Poisonous snakes can cause serious damage to you and your livestock.

Even though they look creepy, snakes do have their benefits. Snakes eat rats and mice, which carry ticks. Timber rattlesnakes are especially fond of eating tick-carrying pests. A 2013 University of Maryland study showed timber rattlesnakes ate so many ticks that they removed 2,500-4,500 ticks from the site they lived on each year. Keeping the tick population down is important to reduce the spread of Lyme Disease (a bacterial disease carried by ticks), which can be especially important for recreational properties that host hikers or hunters.

Call The Exterminator Or Let Them Be? If the snakes aren’t venomous and you don’t have a serious phobia, they can be a boon to your land.

Raccoons

Raccoons may look cute, but there’s nothing cute about the damage they can do to your property. Besides digging through trashcans, raccoons are also known for eating eggs, like those of our snake friends mentioned above, and other small animals. Worst of all, raccoons carry diseases such as parvovirus, fleas, and rabies. According to the Center for Disease Control, raccoons account for 30.2% of all animal rabies reports. Their feces also carry disease such as salmonella and racoon roundworm. None of this is good if you are trying to manage or attract wildlife to your property.

Having raccoons on a property does have a few upsides. They are one of the few animals that eat wasp larvae, which gets rid of the nest. They eat a wide variety of things, including harmful insects and small rodents that can also be considered pests on your land. However, these benefits don’t typically outweigh the drawbacks of having raccoons on your land so its best to find ways to deter them from making their home there.

 

Call The Exterminator Or Let Them Be? A cute, furry face masks a host of nasty diseases and a bad temper. Consider bringing in a professional.

 

Opossum

Opossums have a bad reputation for their mangy looks and tendency to ‘play possum’. Their looks hide the fact that opossums are actually very well-groomed. While ticks may cling to opossum fur, only 3.5% of the ticks survive opossums’ grooming and feeding. Like snakes, their presence on your land can kill thousands of ticks every week.

Besides ticks, they also eat other pests that plagues your land like cockroaches, mice, snakes, and animal carcasses.

Call The Exterminator Or Let Them Be? Opossums tend to be non-aggressive, eat ticks and other pests, and can even get rid of poisonous snakes. They may not be the prettiest creatures to look at, but they are good for the overall health of your land.

Foxes

Foxes are often viewed as sneaky, sickly creatures that will kill all of your chickens. That reputation isn’t entirely fair. These cat-sized creatures aren’t naturally aggressive and are easily scared off.

Foxes are also healthier than they are perceived. They can have rabies, but the strain they carry is much less common than raccoons (in 2017, foxes were the cause of 7% of all rabies cases).

If you have small household pets (rabbits, guinea pigs, kittens, and small dogs) or chickens, these could be at risk of a fox attack. It’s best to keep pets locked indoors and make sure the enclosures for any small livestock living outside are secure.

Call The Exterminator Or Let Them Be? You probably don’t need to call pest control. In most cases, they are relatively harmless and hunt tick-carrying animals.

Ants

One of the worst things about warm weather is seeing a steady stream of ants trickle into your house. While they may be annoying in your living room, ants have a lot to offer your land. The leaves and fruits the ants bring into their tunnel eventually decompose, creating valuable nutrients for the soil. The tunnels that the ants go through also redistribute nutrients throughout the soil.

Call The Exterminator Or Let Them Be? Unless swarms of ants are causing serious damage to your crops, you can leave ants alone.

Some common farmland pests are just pests. Other creatures can benefit your land by getting rid of disease-carrying critters, eating tics, or improving the overall health of your land. If in doubt, contact your local animal control company. While some pests do nothing but cause trouble, other pests can provide a helpful service to your land.

Now that you know what pests are beneficial for your land, you may be interested in other best practices for your managing your land or even looking at purchasing some additional land for yourself. If so, be sure to use our Find A Land Consultant tool to find a qualified land expert in your area.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.