A Love of all Things Western and Wild

By: Tyler Jacobs

You’re not supposed to write about funerals in a blog post. However, it was last month that we buried my uncle “Bo” and the brief eulogy, familiar faces, and the lack of a cell phone distracting me offered some true revelation and clarity regarding my ever-present attraction, even love, for all things western and wild. Cattle, cowboying, hunting, fishing, neighboring, and even life in a Texas deer camp, all came from initial experiences shared with me by “Bo.”

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Tyler Jacobs and a gator.

Being raised in East Texas, my grandparents ranched along several miles of the San Jacinto River bottoms, and the upland mixed timber where we wintered the cows. My first substantial memory of Bo (and always accompanied by my aunt Holly), was that of being invited along with my cousins to bring our horses and camp along the river for two weeks during the early part of summer. I was seven or eight years old. Campfires, tarpaulins stretched between cattle trailers, horses tied everywhere, numerous cousins and friends, all color my memories, regardless of how accurate they are.

The most vivid memory was baiting droplines in the river.   I can see us crisscrossing the river and sandbars, working our way upstream to check each of them. Bo walks to within eyesight of each dropline tied to a limb and can instantly decipher what may or may not be on the hook.  All the kids stood in awe when Bo tells us to hold the small stringer of channel cats, and he takes his shirt off, knowing there’s something big on the line. Slowly approaching the dropline, he suddenly disappears below the water line as his feet fail to find footing below him.   After an eternally long time (for a 7-year-old to watch), Bo re-emerges with a 25-pound blue catfish above his head, gripping it only through its gills with one hand.  Best catfish I have ever had, filleted, fried and finished by all of us kids in one night. That was the wildest thing I had ever seen.

I think I was twelve and was asked to come help pen cattle, and at that time we were running Simmental bulls on our Brahman-cross cows. Those bulls did not like the summer heat, and sure did not appreciate getting bothered with kerr dogs. We had most of the cows and calves penned, and went back to grab everything that had slipped off into the timber and brush in the river bottom. The ranch shared a three or four acre natural lake near the southern boundary, and the long-haired Simmental bull decided to find relief from both the heat and the kerr dogs by wading into the water.

Tyler Jacobs and his daughter.

Tyler doing what daddies do.

Bo and I, and two or three others, sat horseback on the bank to devise a plan, dogs barking as the bull swam away from us, not knowing there were always two or three alligators on the far bank. It did not take long for the alligators to awake from their slumber among all the commotion to notice that stubborn bull swimming right towards them. Bo said, “Well, this will be worth watching,” and soon thereafter a 2,000-pound bull met three alligators nose-to-nose. The immediate and direct reversal of the bull resulted in the alligators on his tail, and shortly thereafter on dry land surrounded by cow dogs. Bo remarked, “Never expected those ‘gaters to be the best cow dogs we ever had!” That was the wildest thing I had ever seen.

A few years later, we were penning cows and had some friends there helping us, one of which was “Bubba.” I don’t remember the exact circumstances, but we were casually riding without dogs among the palmettos and oak trees, when Bo hollered “Pig, pig! Somebody rope it!” Bubba was riding a three-year-old colt, but as the pig crossed his line of sight, he could not resist the urge to shake out a loop. Bubba roped that pig, but a dead, standing tree quickly came between his horse and the pig on the end of the rope, immediately reversing the pig’s trajectory towards Bubba’s three-year-old colt.  Bubba was tied on hard and fast, the colt thoroughly rejected the idea of the pig being under his legs, and the entire event was anchored to a dead tree. That was the wildest thing I had ever seen.

There are so many stories, many of which were shared by eulogy or fellowship afterwards – of elk hunting in New Mexico, the numerous accounts of helping neighbors when they were in a tragic bind, calving heifers, building deer camps, training mules, and endless other accounts. It is strange that it took a funeral for a man in his mid-40s (myself) to identify the primary genesis of my love of all things western and wild. You know what they say, “funerals are for the living!”

Tyler's daughter roping a cow.

Tyler’s daughter Molly.

Happy Holidays & Welcoming New Managing Director Monte Lyons

By: Joel Leadbetter

This time of the Holidays spent with friends and family is quite special.  We all have the opportunity to reflect on the previous year and count our blessings.  This year has been very special for us at Hall and Hall for which we are very grateful.

We celebrated our 70th Anniversary and I believe each and every one of us are extremely proud to be associated with this company and what it represents.  We feel privileged to be a part of something bigger to carry forth the vision of the founders: Henry Hall Sr., Henry Hall Jr. and Warren Hall.

We have had great success in each of our business enterprises through the course of last year.  Of course, the catalyst to this success is due to our unbelievably supportive clients and customers.  Without them, none of this would happened.  Thank you.

I have finished my five-year tenure as a Managing Director of the company.  It has been my pleasure and honor to serve in this capacity.  Monte Lyons, in our Lubbock, Texas office, will take the reins on the first of January and he and Mike Hall will continue to drive this company forward providing the highest level of service for our clients.

I would like to thank my partners and colleagues at Hall and Hall for affording me this opportunity. It is something I will cherish and remember for the remainder of my career.  Most of all, I would like to thank my wife, Dawn, for putting up with me.  She is the one that had the heavy lifting.

I hope everyone had a Merry Christmas, and all of us at Hall and Hall wish all of you, the greatest of success in 2017.

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Good Time to Leverage Ranch & Farm Real Estate

By: JT Holt

Seems everyone wants to be debt free.  Recently, a mentor referred to a statement his mother made to him when he graduated college and was purchasing his first home in the early ‘80s.  The statement that has resonated with me for some time now, goes like this: “Son, I’m sorry that you had to purchase your home on the time.”  As this makes me chuckle, it brings up a good point and makes one begin to deliberate when is, or when will, debt be a good thing?  If you are able to obtain a greater return than the interest rate available, doesn’t it make sense to leverage an asset to generate greater returns?

The biggest competitor for me as a lender these last several years has been cash!  Why would you not utilize your cash in a farm or ranch real estate purchase, with no other stable returns of any significance in the market place? It was proven by the large amounts of cash that flooded the farm and ranch real estate market.  The recent moves in interest rates, the availability of financing, and the equity that has been lost all pose the question, “Is now the time to leverage my farm or ranch real estate?”

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Lucky Star Ranch

Since the recent election we have seen the 10-year treasury go from 1.80 To 2.54, which has some direct correlation to our interest rates.  Long-term fixed rates have taken the greatest hit overall, at this point, but we have seen a significant increase in farm real estate interest rates recently, although they are still significantly lower than historical averages.  The concern is, will rates continue to rise in this economic environment?  Now may be the time to take advantage of these low rates and pull some of the equity out of your farm or ranch real estate.  Do you need to lock in a low fixed rate today?

The availability of financing may be a greater issue than you realize.  As we saw the collapse of the financial markets in 2008, we saw a significant tightening in farm real estate loans.  As farm loans became more difficult to acquire, it caused greater strain and financial concerns for producers.  The offset of this was the profitability of farming and ranching during this cycle and the cash in the marketplace.  Right now we are actively seeking opportunities to finance farms and ranch real estate.  In this search, we are seeking out the top producers, those that have a strong financial position and those that have equity in their farm or ranch real estate that we are able to leverage.  Is this you?

Significant equity has been lost over the last three years in farming and ranching.  Row crop farmers are going on three years of losses while the rancher is most likely seeing it for the first time in his operation this year, and if not, definitely a drop in income.  Now may be the time to restore that liquidity position.  Did you utilize cash to purchase some ground and now need to restore your cash position?

Robinson Bar Ranch

Robinson Bar Ranch

All in all, now may be the time to look at utilizing the equity in your farm or ranch real estate by taking out a farm loan before rates move too far.  Farm real estate loans are still attractive to your lender, and it allows an opportunity to restore your liquidity position.  Is now the time to leverage one of your most valuable assets and “buy it on the time?”  Call us today and let’s talk through your many farm and ranch loan options.

Montana Rejects I-177

By: Randy Shelton

One of the initiatives on the Montana ballot this November was I-177. As written, I-177 would only allow trapping to take place once a problem arises, and only after determining that non-lethal means were unsuccessful. The initiative was strongly opposed by The Montana Stockgrowers Association, Montana Outfitters and Guides Association, the Montana Trappers Association, the Wild Sheep Foundation, the Rocky Mountain Elk Foundation, the Montana Bowhunters Association, and Montanan’s for Wildlife and Public Land Access.

Many felt that I-177 would also end up costing state and federal wildlife agencies thousands of dollars in order to remove problem animals from the wild and keep predator populations in check. This is something that licensed trappers currently buy a license to do and in doing so, generates money for the state. Additionally, many felt that I-177 conflicted with two of the major tenants of the North American Model of Wildlife Conservation, specifically the idea that wildlife belong to the public and that science is the proper tool for determining wildlife policy.

Montanans rejected the Initiative by voting 62% against and 37% for. So, for the time being, farmers and ranchers can continue to rely on trapping for the management of problem wildlife to protect their stock.

 N Bar Elk027

Diversifying Ranch Income with Hunting

By: Tyler Jacobs

According to a recent article in Beef Magazine, CattleFax CEO Randy Blach states, “low calf prices are likely to remain in the $130 to $140 per cwt. range in 2017.” In other words, prices that cattle producers are likely to see in 2017 are very similar to what they are experiencing today.  What does that mean for ranchers? Now is the time to run a tight ship and make critical business decisions. For many, that may include diversifying a property’s income stream.

One form of income expansion would be to offer hunting opportunities. According to the U.S. Fish and Wildlife Service 2011 National Survey of Fishing, Hunting and Wildlife-Associated Recreation report, 13.7 million people aged 16 or older hunted that year and spent $38.3 billion on equipment, licenses, trips and more. This tells us that there is a strong desire for hunting opportunities in the U.S. and obviously landowners stand to benefit from that. Hunters not only stay in their home state (resident) but they also actively travel out of state (nonresident). This provides a rich pool of hunters to work with.

U.S. Fish and Wildlife – Hunting in America, An Economic Force for Conservation

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Hunters are also diversified in their interests, which can range from big game to upland game birds like bobwhite quail, chukar, turkey and pheasants. These are all species for which we, as land managers and wildlife biologists, can actively manage a property for. More often than not we are able to do so in balance with the overall goals of the farm or ranch. This is well illustrated in the book “Beef, Brush, and Bobwhites” by Hernandez and Guthrey. Livestock, agriculture and wildlife can function very well together. The King Ranch of south Texas is one of the best examples of this concept in action.

So what influences hunting prices? One might think it is a multi-million dollar lodge. Others would suggest it is food and amenities such as a swimming pool, wet bars and nice vehicles. However, the critical factor is the quality and quantity of wildlife present on a property. The majority of hunters partake in hunting for more than just the harvest. Outdoor recreationists cherish the opportunity to simply be a part of that environment. They appreciate the wildlife, the associated habitat and the opportunity to hunt.  A large percentage of hunters actually understand the investment in time, energy and finances that are made by landowners to ensure healthy wildlife populations that live in vigorous habitats. Hunters will remember the experiences from time spent in the field far more than the food or lodging.

quail hunting ranch georgia

The business side of hunting operations such as marketing hunts, making the land available for leasing, booking hunters, managing hunting camps, overseeing lessees, lease documents and working with the local state game biologists can be tedious to some. Many landowners simply choose to hire a service, such as that offered by Hall and Hall to manage their hunting operations. In this situation, the landowner knows that the ranch is faithfully represented and that the hunting operations will be professionally managed.

So what does all this mean for landowners, especially ranchers who may have to be tightening their belts due to low cattle prices? This is an opportunity to add income that had previously been left on the table and broaden the ranches income stream into the future. Selfishly, this gives us an opportunity to educate those who spend the majority of their time in urban environments about the importance of ranching and agriculture. Perhaps they will even celebrate their successful hunting experience with a steak. That works for all of us!.

Investment Quality Rural Real Estate for Families

Jim Taylor and Tyler Jacobs were invited by Angelo Robles to speak at a meeting of Single Family Offices at the beautiful Carneros Inn in Napa Valley. Single Family Offices are increasingly ubiquitous as wealthy families are setting them up to manage and diversify their investment portfolios as well as manage their personal affairs.

Carneros Inn in Napa Valley

Carneros Inn in Napa Valley

Jim had an opportunity to speak on his favorite subject – Investment Quality Rural Real Estate (IQRRE). He began by defining IQRRE as real estate whose value comes from qualities that are intrinsic to it. These are enduring qualities that will always have value regardless of what happens in the world.

He had an opportunity to compare rural land to the offerings of previous presenters who talked about more traditional investment real estate like office buildings and apartments. Key differences include the fact that farms and ranches do not depreciate nor do they become obsolete and they have a 55-year history of appreciating at around 6% per year. In addition, while we can build an unlimited number of apartments and office buildings, they simply are not making any more land. Quality rural land will always have value and, by the way,  has a zero vacancy rate.

There will always be tenants for farms and ranches and, while returns are modest compared to the double digit returns promised from leveraged apartments and office buildings, we were able to show that annual cash returns will more than carry investments in operating farms and ranches.

Jim Taylor on a ranch in Montana.

Jim Taylor on a ranch in Montana.

The audience of families and their advisers was made to order for IQRRE. Quite apart from appreciating the concept of having a portion of the family wealth invested in a hard asset that will support itself and appreciate over the years, the intangible benefits derived from the joy and pleasure of ownership and of having a place for the family to gather and to introduce the next generation to nature and to the tangible benefits of production agriculture is immeasurable.

The message was well received and, despite some persistent rain showers, everyone appreciated the understated elegance of the Carneros Inn and the many opportunities to enjoy the Napa Valley which is truly the wine capital of the USA.

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Napa Valley