Climate Consequences for the Western U.S. Farm/Ranch Market

Over the past several years, I’ve been spending a lot of time studying online real estate ads for farms, ranches, and other rural properties. For a few more years than that, I’ve also been watching the flow of science about climate change impact on aquatic and associated terrestrial systems. While I’ve followed the combination of agricultural land market and climate trends across North America, I’ve been especially interested in the trends for climate science and farm-ranch sales pitches in drier regions such as the interior West’s mountains and plains, where I live.

The interior West is the focus of my following observations. My observations will try for some inclusiveness, but won’t be exhaustive. I’ll describe some plausible differences between what sellers and their agents/brokers disclose of current farm-ranch conditions and the conditions buyers can plausibly expect as rising heat forces change across these and adjacent landscapes.

I’m not about to do anything as serious as give “advice” here, but the short story is that I’m seeing a lot left unsaid about the expected effects of climate change– heat, drought, fire, and flood — on these properties. And what I’m seeing in the science journals suggests that changes of climate will, inevitably and unavoidaly, begin to affect what buyers are willing to pay for them.

I’m not fabricating this scenario of climate forcing change on land and land prices from scratch. It’s a scenario recognized across a variety of sources, including this assessment: “Climate change will alter ecosystem services, perceptions of value, and decisions regarding land uses.” It’s a sentence straight out of the Forest Service’s General Technical Report PNW-GTR-870 December 2012

High Expectations Can Lead to Broken Dreams

Sales pitches for acreages in the interior West often encourage buyers’ high expectations of “abundant” wildlife, trout-filled streams and, thanks to wonderful water rights to those same streams, abundant hay crops for thriving livestock herds. At bottom, many of these ads call attention to an existing combination of agricultural and recreational opportunity.

At least at first glance, the ads appear to assure potential buyers that a property can “wash its own face,” which means that it can at least cover its expenses. Better, of course, if it makes some money from ag operations, plus the income from leasing the land for fishing and hunting.

For sellers and buyers alike, millions of dollars can rest on the success of pitches like these. But this can be the stuff of broken dreams.

Consider the potential for those allegedly trouty waters. Among others, Trout Unlimited and the National Wildlife Federation have clearly warned that trout face trouble across the country, perhaps especially in the West. There’s evidence aplenty for that view, and much of that evidence points toward serious loss of trout as the world continues cranking up the heat. An article in Proceedings of the National Academy of Sciences concluded that climate change may reduce Western U.S. trout populations by 50% in the years ahead, partly thanks to lower streamflow expected with winter snow loss and consequent summer drought.

Again, I’m not attempting an exhaustive list of caveats here, but in addition to risk from drought, many ecologists will quickly notice photos in online ads that show trout streams damaged by a history of too many cows on the farm or ranch for too long, and for too many years. A naïve buyer may either be unable to see this damage. For that reason, a naïve buyer may not grasp the cost of reversing the damage as a cost beyond the simpler cost of purchase. While it’s fairly common for a real estate ad for a house to disclose that it could use some “TLC,” I have yet to see the ad for farm and ranch streams and springs that does the same thing, and in this way too, a buyer’s expectations can arguably be out of kilter with realities on the ground.

There’s Risk of Losing Wildlife Featured in the Ad

Moose, like bears and birds and others, sometimes show up moving across properties in the interior West. Buyers of those places may expect that moose will keep showing up from time to time.

They might want to consider adding a good outdoor thermometer or two to the farmhouse improvements, to keep a gauge of how well those moose are doing as time goes by. Moose have never done very well where it’s hot and dry. There are some indications that they’re already feeling the heat, directly, and indirectly as warmer winters end up freeing population booms of insects that swarm the skin, feeding on a banquet of moose. I wouldn’t swear by the findings of any one study, but remember one biologist being quoted as saying that moose can start feeling stressed at 80 degrees Fahrenheit. And I remember when, in 2004, the distinguished journal Science published an article by Gerald A. Meehl and Claudia Tebaldi, titled “More Intense, More Frequent, and Longer Lasting Heat Waves in the 21st Century.”

As for Trout, (and Moose?) So Too for Irrigated Hayfields?

There’s plenty of persuasive evidence that, if we need to reduce our expectations of trout-filled streams, we face the same situation for irrigation. In documents prepared ahead of its November 14, 2014, the American Water Resources Association points to a current, ongoing expectation “that irrigated agriculture will continue on its current scale,” but stresses that heat and drought will force farmers and ranchers to reduce expectations of irrigation’s future scale.

Because irrigation is described as the basis for hay crops that currently feed a ranch’s cattle, a loss of trout can also mean lost irrigation water, and necessity to sell off cattle down to a herd size that the reduced hay can actually support.

Again, there’s evidence aplenty that the American West’s irrigated agriculture will take hits, including a 10 year old, February 20, 2004 Science article titled, simply “As The West Goes Dry”. And lately the world around has seen news of drought’s impact on farm-ranch profitability for nearby California.

Nor is drought a blessing for wildlife, including common, widely distributed western species such as the mule deer. A quick Google search using the three terms mule deer, mortality, and drought gets over 57,000 hits indicating that mule deer death increases during drought. So, information left out of a sales story is, or should be, within relatively easy reach of many if not most potential buyers of farms, ranches, and smaller plots of rural real estate. And it’s no harder for the sellers to do the same searching. Likewise for their agents/brokers.

Responsibility is and will be Widely Shared

If I were selling a farm or ranch, I’d want my ad to disclose that its future includes plausible drought-driven losses of trout and irrigation waters, and that my own reduced expectations for irrigation mean that I’m selling off cows enough to trim the herd down to what my newly-initiated dryland hay operation will be able to feed. If I were the seller of many places now on the market, I’d have given the irrigation volume back to the trouty stream, after deciding that fish need water and hay can be a dryland crop, and that this recent change of management policy is now part of the conservation easement that goes with the place. I’d also want the ad to give a nod to the risk of losing some of the advertised “abundance” of wildlife. Rather than pumping up a buyer’s expectations, I’d make a point of reducing them, and warning potential buyers of climate risk. Falling short of that sort of thing would be similar to selling an urban home without disclosing that the foundation is cracked.

None of which leaves farm and ranch buyers off the hook. Sellers may strive for full disclosure, but still miss some point that’s pertinent to their asking price. Buyers will have to take up that slack, because they often face a reality where at least some sellers may still be unaware of what’s coming down the road.

Farm and ranch buyers thus face a special challenge in assessing their exposure to climate change. In town, home buyers can hire a home appraiser or inspector to identify whatever problems a house or office building may have. With that report in hand, a home buyer can decide if the place is worth the money a seller is asking. So far, though, I know of no independent appraisers or inspectors who could serve the same role for someone seeking help in deciding whether or not to buy a farm or ranch – or how much to pay for it.

So buyers of rural real estate shoulder a greater share of responsibility for conducting what’s known in the real estate industry as “due diligence,” which now must include due diligence on risks coming at them from global heating and its myriad consequences.

Agents and Brokers will be Thrust into the Forefront

If sellers and buyers of farms and ranches can’t duck changes forced by a changing climatic regime, neither can their agents/brokers. After all, even for home sales in town, it’s nothing out of the ordinary to see the language of “buyers and/or their agents should do their due diligence” on the likes of square footage, zoning, etc. New, climate-related, due diligence is needed for the climate’s impact on Western farms and ranches, and will almost certainly affect what buyers are willing to pay for places that could and plausibly will be under new extremes of heat, flood, drought, and fire.

I don’t know, but I’m willing to suppose that, sooner or later, these new realities will gain increasing prominence at the conferences for real estate agents and brokers if they haven’t already.

Now Add Fire

It’s not merely a matter of broken dreams about irrigated fields, trout-filled streams, and abundant wildlife. I sometimes see places whose advertised assets include end of the road privacy, and year-round access. Some of these ads feature tidy little cabins — or posh Mansions — surrounded by dense stands of conifer forest, and there’s the rub.

A recent report, Rocky Mountain Forests at Risk, makes it pretty clear that the entire region faces future summers of potentially bigger, more intense, more dangerous conifer-forest fires. This scenario throws a curve ball into the promise of year-round use, and puts end-of-the-road privacy in a new perspective.

Given the increasingly apparent risk of fiercer and more frequent fire in western US forests , I sure wouldn’t want to invite family and friends to a mid-summer barbecue in a dense conifer setting where there’s only one road out. Maybe before the fire season, maybe after, but never when a summer’s heat and drought can set the stage for fire. After all, it’s one thing to lose a little cabin or an ostentatious monstrosity of a mansion to fire, but something else to bring family and friends into fire’s way.

There’s also the matter of losing the forest, not so much from fire, from which forest have long recovered, but from heat. Especially heat piled atop drought, an issue that some refer to as hot drought problem. This problem is a proven killer of forests, and expectations of ranchland forest as a money maker need to be in line with projects of forest dieoff on a permanent basis. Already, the southern portion of the interior West has seen forest die-off on “massive scale,” killing trees across age classes.

Too Much Water can be Yet Another Risk

As if rising risk of losing water, hay, herd size, and forest stands might not be enough to affect the price buyers are willing to pay for rural real estate in the interior West, the rising likelihood of flood raises issues of its own. Perhaps the most obvious risk here comes to the tidy little cabin or posh log mansion built adjacent to the (currently) trout-filled stream. But flooding streams don’t exhaust the list of flood risks; earthen dams, some of them added to the farm or ranch only recently, pose a unique risk of their own.

Many of these dams were added to catch water for storage as use for livestock. Other earthen dams were built to catch water for summer hay or grain irrigation. Some served both roles. Some farmers and ranchers bought fish to stock in the waters behind these dams, and a great-uncle of mine was one of the bunch who gave trout a try in the late ‘40s or the ‘50s. Where I live, here in the Interior West – the Great Plains and the Rockies – there are lots and lots of these ponds, many of them at or past their 100th birthdays.

To get a quick look at what’s coming to these dams, look far beyond the Interior West. Look offshore, look to the oceans.

Water evaporates. Warm water evaporates even faster. As we crank up the heat in oceans, they give up the water more freely. As if that were not enough to increase the supply of water in the skies above, it turns out that warm air can take the ocean’s as easily as the ocean now gives it up.

Then, since the Law of Gravity hasn’t been repealed, with a lot of water up in the sky, there’s a lot of water waiting to come down in dam-busting downpours.

This species of risk is certainly not limited to the interior West, and anyone can find its national implications summarized in the online 2012 report, When It Rains, It Pours. But it’s a risk that anyone interested in the western U.S. could easily weigh with a simple Google search using climate, flood, “western United States” and “earthen dams.”

For anyone about to plunk down a pile of cash for acreage that includes earthen dams, it’s likely wise for them and their agent or broker to ask if the waters thus released might create liability by their any potential to damage some home, subdivision, or other earthen dam located farther down the drainage. Buyers might thus want to find out if their insurance policy will cover liability for scenarios like this. And it’s likely worth some additional due diligence to uncover the cost of removing whatever of these dams could expose a new owner to unwanted liabilities. And definitely worth more time in due dilgence on what a removal of a dam might do to the wildlife described in the sales pitch.

Obviously enough, global heating’s impact on real estate pricing extends far beyond America’s interior West, and beyond North America. Among the most conspicuous cases, coastal real estate is heading into a new era as sea levels rise. Here, we may already be seeing buyer wariness about putting money into property that will be put under water. For example, a recent news report out of Hampton Roads, Virginia said that awareness of changing sea levels can affect buyer’s willingness to pay today’s typical asking prices, or at least keep beachfront properties from selling as quickly as they have until now. 

Help is not out of Reach

Alas, at least from what I’ve seen so far, the old, familiar routine of seller disclosure and buyer/agent due diligence has entered a new era, but the industry doesn’t seem to have caught up with the era’s new risks. The upside is that, while apparently not on the radar screens of many sellers, buyers, agents, brokers, or appraisers, the needed information is available — and in some cases very easily accessible via web search — to just about anyone willing to see.

Buyers of rural real estate face new conditions that will be forcing new choices everywhere. In the interior West, where heat and drought may reach new extremes, the wells that feed the kitchen sink in shack or mansion aren’t exactly immune to running dry, making it hard for the latest owner to wash his or her own face. We’ve seen some of that already, in nearby California, and the Western interior doesn’t seem immune. Should that scenario be another part of a buyer’s due diligence?

As a final note, none of the above implies that farms and ranches of the interior West will have no worth. For example, despite impact on cash pricing of land, there’s plenty of evidence that even seasonal, temporary streamflows are valuable to wildlife. So, even if a farm’s year-round stream quits flowing year-round, and becomes an ephemeral, it still offers wildlife conservation value to the farm, or ranch, or the smaller acreages that millions enjoy as weekend or seasonal family retreats.

And I see plenty of places, from Arizona north to Alberta, I’d gladly buy for the if I had the money, despite my low expectations of their economic output as the West goes dry.

Why? Because when I look at the places touted in real estate ads, I see values that could persist for conservation purposes, even if these would be sharply different purposes than the ones stressed for the moment. Alas, though, the conversation about climate and western land prices has only just begun.

Lance Olsen, a Montana native, spent much of his childhood and youth going in and out the door of a 600 sq. ft. house, coming in from and going out to a northcentral Montana home of just under 1000 acres. For the past 10 or more years he’s run a restricted listserv for climate researchers, wildlife researchers, agency staff, staff of NGOs operating from local to global scale, and graduate students. Lately, he’s been thinking of offering climate-risk service to farm-ranch sellers, buyers, and/or their agents/brokers.