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Land use options for farmland on the Ridenour Ranch.
Andrew Lord
College of Agriculture
Montana State University-Bozeman
Dec-2011
Project Duration:
Cost:

Project Summary/Abstract:

Introduction:

    1. The purpose of this study is to determine the best agricultural use for the land
on the Ridenour Ranch. The Ridenour Ranch is located southwest of Plentywood
Montana. The ranch is primarily a cow/calf operation with some acreage contracted
into the Conservation Reserve Program and some farmland planted to wheat. The
Ridenour Ranch is a family owned corporation which runs the ranch. The Ridenour
Ranch was homesteaded in 1906 by Luther Ridenour, a surveyor for the railroad,
who came to Montana for work and decided to stay to try his luck as a cattle
rancher. The Ranch began as a 240 acre plot and over the last 100+ years has grown
to over 5,000 acres. As we prepare to pass the ranch to the fourth generation and
beyond, it has become time to take a step back and re-evaluate the science behind
our land management decisions.
    2. The CRP is a national program whose main goal is to “reduce the sediment
nutrients and pollutants that enter our nation’s waterways.”(Conservation). When
landowners CRP contracts are not renewed they must make a decision about how to
use the land (Nelson et. al.). Income from CRP contracts is received without the need
for infrastructure or machinery such as fences or combines. Finding a new use for
this land almost certainly means either investing in infrastructure and machinery,
leasing the land, or selling out (Life). Landowners have options when their CRP
contracts expire. Land can be reenrolled in the CRP, turned to grazing, used as hay
land, leased for hunting, convert to farmland, or take part conservation programs
such as the Conservation Stewardship Program (CSP), The Wildlife Habitat
Incentives Program (WHIP) or the Environmental Quality Incentives Program
(EQIP) (Elmore et. al.)
    3. This study will examine the options available to the RRC. In order to make an
economically sound decision, the RRC will need to know what investments will be
needed to make those income options possible and how much income can be
expected from each of those options. The ranch is made of two different kinds of
land, each with different land use options. The largest portion of the ranch (~ 75%)
is native rangeland. The main objective of this proposal is to examine and improve
the grazing management practices on this native rangeland. The remaining portion
(~25%) of the ranch is dry-land pasture, most of which is contracted in the
Conservation Reserve Program (CRP). Dry-land pasture is farmland that has been
planted to native grass. Three main options are available for the use of this land.
First is reenrollment in the CRP. One RRC CRP contract was not renewed because
the Environmental Benefits Index (EBI) score was not high enough (NRCS). The FSA
assigns a unique EBI score to each track of land offered into the CRP program based
upon a set of EBI factors. Points are assigned for; (1) wildlife habitat benefits
resulting from covers on contract acreage, (2) water quality benefits from reduced
erosion runoff and leaching, (3) on-farm benefits from reduced erosion, (4) benefits
that will likely endure beyond the contract period, (5) air quality benefits from
reduced wind erosion, and (6) cost (Conservation). Investments can be made in
order to improve the EBI score before bidding for re-enrollment in the CRP (CRP
signup 41). The next option available to RRC is the expansion of the existing RRC
beef operation by using the dryland pasture for grazing and haying. This would
involve an investment in fencing infrastructure and more livestock (Conservation).
To explore this option, this study will assess the current grass production, additional
seeding and planting options for increasing production, as well as fencing design
based on proper grazing management practice and water availability (ref needed).
The final option that will be examined by this study is the conversion of CRP land to
farmland. This could be done by purchasing new farm equipment, hiring a farmer to
do the work, or leasing the land to a farmer (ref needed).
   4. The overall goals and objective of this experiment is to provide the RRC with
the information needed to make a sound economic decision about the future of the
RRC farmland. The expected result of this study is to show conclusively which of
these options is economically best for the RRC.
   5. Once the RRC has a clear economics picture of the options available to it, it will
be able to make the decisions and investments needed to ensure economics stability
far into the future.

Literature Review:

Approach:

What is the best use for land at the Ridenour Ranch? Determining the best use for land at
the Ridenour ranch involves two primary components; family economics, and the
preservation and improvement of ranch ecosystem quality. Any way the land is used, it
must produce enough income to pay the property taxes and support the business while
supporting the ecosystem which provides this income. The primary objective of the
Ridenour Ranch Corporation is to keep the rangeland in good health through proper
management while providing a living to its employees. We will examine three main
agricultural options for the ranch; ranch-wide improvement of grazing management
practices, leasing dryland pasture to the United States Department of Agriculture
(USDA), and conversion of dryland pasture to grain production. These land use options
are not mutually exclusive. Currently, all three employed on the ranch.

Grazing Management:
   Ranch management is a continuous processes. As administrations, market prices and
weather patterns fluctuate, new decisions must be made about how to best manage the
land. The purpose of this research is to create a Decision Analysis flow chart for best
practices on the ranch in order to create short, medium, and long-term projections for the
best management of the ranch.

Estimating Uncertainty (weather, yield, prices, government programs)
   Ranchers must deal with a lot of uncertainty. Weather patterns are changing, not only
from month to month, and year to year, but also from decade to decade. This has a huge
effect on crop yields, creating great uncertainty in future production. Finally, market
price and government programs are continually changing and make have significant
weight in management decisions. In order to create short, medium, and long term
forecasts, it is important to estimate the uncertainty inherent in each calculation.

Current management practices:

   The Ridenour Ranch (5147.4 acres) is a mix of native pasture (3,951 acres or 75.2%),
dry-land pasture (1196.1 acres or 23.2%), and tilled fields (80 acres or 1.5%). The ranch
currently gains income from 140 head of cattle and 1085.3 acres of dry-land pasture
enrolled in the Conservation Reserve Program (CRP).
   Two different procedures will be used to analyze the use of the two main types of
land. The native pasture will be the focus of a grazing management assessment. The
dry-land pasture has more options for its use (pasture, hayland, farmland) and will be the
focus of the decision management flowchart.

   1. Analyze existing ranch management design:
         a. Economics
                 i. Calculate minimum to maximum monthly and yearly farm
                    expenses
                        1. Taxes
                        2. Insurance
                        3. Wages, Medical and Retirement
                        4. Household
                               a. Food
                               b. Electricity
                               c. Telephone/internet
                        5. Equipment
                               a. Automobile
                               b. 4x4 farm pickup
                               c. loader tractor
                               d. ATV
                               e. Bailer
                               f. Swather
                               g. Farm truck
                               h. Shop Tools
                        6. Infrastructure
                               a. Wells
                               b. Shop
                             c. Barn
                             d. Coral
                             e. Fences
             ii. Calculate Income
                     1. Beef Sales
                     2. CRP Rent
      b. Business Model
              i. Cow/calf operation
2. Analyze existing native range management
      a. The cattle are kept and fed in a five acre pasture from 12/1-4/1, a 240 acre
         pasture from 4/1-5/1, a 1520 acre pasture from 5/1-6/1, an 1800 acre
         pasture from 6/1-10/10, and back to the 1520 acre pasture from 10/10 –
         12/1.

3. Calculate AUM’s
      a. Discuss uncertainty of production
               i. Each cow 1000 lbs
              ii. Needs 2.6% body weight per day
             iii.
4. Create Improved native range management scheme
      a. Decide about fencing and water
      b. Calculate the Cost of Improved range management scheme
5. Create Decision Analysis flowchart for Dryland pasture use
      a. Calculate haying capacity with CRP
               i. CRP maintenance haying scheme
                      1. Each part can be cut one time during the contract period
                      2. Extra hay is purchased
      b. Calculate haying capacity without CRP
               i. Sustainable haying management scheme
              ii. Grazing scheme if excess hay
      c. Calculate CRP Improvements
               i. Calculate cost of renovation
              ii. Assess chance of contract denial even with renovation
      d. Calculate Wheat/Lentil Yields
               i. Soil info from NRCS
              ii. Estimated yields taken from literature
                      1. Calculate statistical uncertainty
      e. Create flowchart for land use


Grazing Management Decision Analysis Flow chart:


                   increase
                   herd by
                   _____
              wet      Utilize
              year     more
                       land
   number
   of
   cows
              dry      rest land
              year
                       decrease
                       heard
                       by_____




Leasing to the USDA:
    Currently over 1090 acres are leased by the USDA in the Conservation Reserve
Program (CRP). The lease on 110 acres has been discontinued, and it is expected that the
contract on another 110 acres will not be renewed in 2012. The USDA will not continue
to lease this land because the EBI score is too low. In order to reapply, this acreage must
be renovated to improve the score. In this section, I will calculate the cost of renovation
and compare it with the expected gains. Getting a contract with the USDA is not a sure
thing, so for this option, I will produce a Decision analysis flow chart for each area of
dry-land pasture.


CRP contract decision analysis flowchart for:


T-3359—(110.8 acres) crested wheatgrass & alfalfa-

                           Haying
               Contract
               Renewed
   Renovate
   CRP
               Contract
               not
               renewed
                           Grazing
                           Haying


                           Farmland Wheat
                                    Lentils
                                      ?


T-3388 (110.7 acres)--crested wheatgrass & alfalfa
(contract expires 9/30/12)


Contract Improvement
Renewed


Contract    Grazing
Not
renewed
            Haying
            Farmland
            Renovation

T-10884 (782.5 acres) --western wheatgrass, intermediate wheatgrass, slender
wheatgrass, alfalfa (contract expires 9/30/17)


Re-enroll
in CRP

Haying

Grazing

Farmland

T-3264 (66.4 acres) -- western wheatgrass, intermediate wheatgrass, slender wheatgrass,
alfalfa (contract expires 9/30/12)


Re-enroll
in CRP

Haying

Grazing

Farmland

T-12362 (125.7 acres) – western wheatgrass, intermediate wheatgrass, slender
wheatgrass, alfalfa


Re-enroll
in CRP

Haying

Grazing

Farmland



Grain Production:
   Analysis of possibilities for wheat and lentil production will require an estimation of
yield and examination of business options. Three main business options exist, leasing the
land to a farmer, share cropping with a farmer, or paying a farmer by the acre to do the
work.


Wheat

Lentils




Measurement Methods:

Measurement was done by Monica Friedrich at the Natural Resource Conservation
Service in Plentywood MT, using ArcGIS mapping software. Monica generated a soil
table for each parcel of land containing the percentage of each type of soil for each
parcel. She also included USDA documents with estimate forage and wheat yields by
soil type. I combined the data into one excel spreadsheet and calculated the forage and
wheat yields for each parcel. Two different forage yield data were included. The first
table gives a single value as AUMs/acre for each soil type (1). The second table give
three annual forage yields in lbs. of dry forage per acre per year; favorable year, normal
year, and unfavorable year(2). The wheat yield data came as a single value of
bushels/acre for each soil type for both spring and winter wheat (3).
   (1) USDA Using MT-ECS-3 to Determine Initial Stocking Rate MS Excel
        Spreadsheet
   (2) USDA Table C1: Range Productivity for Sheridan County
   (3) USDA NRCS Modeling Spring and Winter Wheat Yields

Statistical Method:



Adequacy of Design:

Time Table:

Budget:

Qualifications:

Works Cited:


Conservation Reserve Program Sign-up 41 Environmental Benefits Index (EBI) Fact
Sheet, United States Department of Agriculture Farm Service Agency.
http://www.fsa.usda.gov/FSA/newsReleases?area=newsroom&subject=landing&to
pic=pfs&newstype=prfactsheet&type=detail&item=pf_20110128_consv_en_crpebi.h
tml, 9-6-2011.

Lord, William. President of Ridenour Ranch Corporation. Interview. 9-6-2011


Nelson, Chris, Bill Riley,Brian Peterson, and Michael Duffy.Maximizing Profitability
on Highly Erodible Land in Iowa, CONSERVATION RESERVE PROGRAM: ISSUES AND
OPTIONS, 2009. mysare.sare.org/mySARE/assocfiles/924572CRP22.pdf 9-5-
2011.



Elmore, Dwayne, Terry Bidwell, Karen Hickman, Rod Wanger. Options for Expiring
Conservation Reserve Program (CRP) Land. Oklahoma Cooperative Extension
Service. NREM-9016. nrem.okstate.edu/Extension/Extension.../options-for-
expiring-crp-land.pdf, 9-5-2011.

Life After CRP —Decisions, Decisions!. CONSERVATION RESERVE PROGRAM:
ISSUES AND OPTIONS. Iowa State University University Extension. CRP-1 Revised
March 2009. www.exnet.iastate.edu/Publications/CRP1.pdf, 9-5-2011.


CRP Signup 41- Montana. Seeding Recommendations for Environmental Benefits
Wildlife SubFactors, March – 2011. Received via e-mail from Monica Friedrich,
District Conservationist, Plentywood, MT USDA-NRCS. Tue, Sep 6, 2011 at 12:42 PM

				
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