Posts Tagged ‘Telemarketing’

Power Stones – Montana Moss Agates

October 31st, 2022

Since biblical times agates have been considered power stones,Guest Posting talismans of protection and healing energy. The agates found in Montana are no exception. Native Americans believed the intriguing stone told stories from the earth mother and provided protection. It was the stone of warriors. Montana Moss Agate is considered by many to be the most powerful of all agates and is said to ward off storms.

Montana Moss Agate, a semi-precious stone found in the alluvial gravels of the Yellowstone River and its tributaries, is an exquisite and valued form of “chalcedony”, one of many types of the mineral, quartz. Montana Moss Agate is classified as a cryptocrystalline or microcrystalline quartz and has a hardness rating of 7.

Montana Moss Agate will take a high polish and is used in carvings and jewelry. The Montana Moss Agate is noted for the dendrite and ribbon effect in the rocks. Another type of Montana Moss Agate is sometimes called pepper rock for sprinkles of black found in it that resemble pepper grains.

Land Values In Southeastern Montana

April 21st, 2022

History

Land values in Southeastern Montana have appreciated significantly over the past 10-12 years. In 1999, a section of land (640 acres) with highway frontage, two wells, a small home, a few old outbuildings, timbered butte, pasture, and crop acreage sold for $45,000.00. In 2004, a bare section of land (640 acres) consisting mostly of grass, a small piece of tillable land, and well, sold for $95,000.00. In June of 2010, another bare section of land (640 acres) consisting of 300 acres in CRP with 2 years left on the contract and balance in grass, and windmill well, sold for $320,000. Yes, that is a cool 711% increase in land appreciation over 11 years time for smaller acreages. The first section sold was leased for ag production and no one lives in the home. The other two sections of land sold were to establish a rural residence, but are located in more remote areas several miles from asphalt.

Larger ranches that are utilized for livestock production have increased from 300-400% in this same time period. A large ranch consisting of over 15,000 acres sold in late 1990′s for $80/acre. Just recently that same property was sold again for $350/acre. Based on production, ranchland in this area has increased from $2000 per animal unit (AU), to some over $10,000 per AU.

Various factors have contributed to this increase of value for these operations. The most significant contributing factor has been the influence of 1031 exchanges as farmer/ranchers sold their smaller operations in Western Montana and the Midwest and Coastal regions and exchanged the value for larger acreages in the “last best place” – southeastern Montana.

Another subtle contributor to value during this period has been the value of big game hunting. Southeastern Montana is abundant in mule and whitetail deer as well as antelope, and provides for a high success rate for those wanting to bag a big buck. The area has many outfitters and guides that lease hunting rights from local ranchers which provides another income source to the ranch budget without any cash investment. Some hunters who came to hunt also decided to invest in the area.

Finally, better climate/moisture conditions and better livestock values have attracted producers to the area. Southeastern Montana is considered to be a semi-arid climate, with only 13-14 inches of rainfall annually and produces some of the best short grass prairie grasses known to livestock producers. Northern prairie grasses have a “punch” that puts a hard-sided gain on calves.

The area was hard hit in the mid to late 1980′s with drought. Coupled with low cattle prices and drought, many ranchers struggled to keep their places. Many were forced to sell their herds, and some had to liquidate part or all their land to satisfy lenders. More significantly, the heirs to these ranches that were graduating from high school during these hard times were encouraged to go to school or forced to leave home in search of a job, thereby disrupting generational takeover of operations.

Over the past five years, moisture conditions have improved significantly as well as livestock markets, providing for the most conducive environment to raise cattle and sheep on this rolling to undulated prairie.

Current Condition

After land values throughout the nation reportedly peaked in 2008, areas of Montana realized lower values in land along with the rest of the country. Those areas hardest hit were the Flathead Valley west of the Continental Divide, and the Bozeman area. Both areas were the most rapidly developing areas of Montana and the first to feel the economic downturn that the urban areas of the country experienced, with up to 40% decline in value on commercial, residential and speculative property. The balance of the state reported 0% to 20% depreciation in value.

Supported by a strong agricultural economy and less influence of artificially inflated values, ranch land came out on top for sustaining its value.

Currently, sales of ranches are slow to stagnant in eastern Montana. Buyers and sellers are currently in a “Mexican standoff” with Sellers unwilling to back off of their asking prices and Buyers unwilling to increase their offers. Working ranches are still being offered at $9,000 – $10,000 per animal unit (AU), however, buyers show little interest at those prices and most offers made are closer to $7,500 to $8,000 per AU.

Lenders play a more controlling role by imposing stricter lending criteria (see my comments on financing), making it more difficult to finance purchases. Influences by out-of-state 1031 exchanges are rare at the present time. Sales consisting of smaller tracts are being picked up by neighboring ranches and recent sales of large tracts of land from 20,000 to 100,000 acres, are being purchased by multiple member entities such as the LDS church and corporate operations based outside of the US that are looking for blocks of grazing for running large numbers of cattle. With some concern, this lends to the theory that cattle ranching may be evolving into the industrialized concept similar to what the swine industry experienced in the 90′s. Large corporations purchase the land and own the operations. Producers become employees, still carrying out the work and lifestyle, but with none of the risk and worry, yet no control.

Future of Ranch Value

There are many variables that will drive the real estate market in the coming years. Rather than provide no more than an educated guess, a short discussion of those variables will allow the reader opportunity to draw their own conclusions:

1. Age of ownership
a. Status of heirs
b. Estate tax

2. Return on Investment
a. Commodity markets
b. Input costs

3. Availability of credit
a. Interest rates
b. Lender willingness

4. Macro economics
a. Inflation
b. Consumer confidence
c. Comparative value
d. Government regulations

5. Micro economics
a. Oil production
b. Coal extraction
c. Commodity markets

6. Climate conditions

The average age of owners of ranch land in Southeastern Montana is 67+ years. Land ownership will transfer within the next 10-20 years. As discussed above, most of the next generation is absent, and will likely sell or lease the land if inherited. In some cases, members of the next generation have now been employed for 20+ years and may take an early retirement to come back to the ranch. They bring their retirement funds with them to invest in the ranch and keep the land in the family.

Other concerns for family owned operations is estate taxes and the increasing “look back” period of Medicaid laws that puts the family ranch at risk if long term care is needed by owners and estate planning was not considered earlier.

Expected Return on Investment for a ranch purchased at $10,000 per animal unit based on a net lease scenario can be expected to yield from 2% – 3%. As compared to a relatively low risk investment portfolio, this return rate is currently quite competitive, but has the added opportunity for future appreciation in value. Stocking a ranch with livestock and operating accordingly, one may realize a better return depending on management and efficiency of operation, however, there is more exposure to risk of loss, as well. Market swings, volatile input costs, and weather conditions create the bulk of uncontrolled risk in operating a ranch. There are a number of second generation operators that lack the capital, but have the knowledge and skills to run these ranches that would be interested in leasing with or without an option for future purchase. This could present a good opportunity for investors considering ranch real estate as an investment.

Credit availability in Montana is currently tight. Banks in eastern Montana are relatively sound, with no rumor or reports of any significant losses due to substandard loan portfolios. However, as a knee jerk reaction to epidemic foreclosures in areas of large urban housing and commercial loans, Federal examiners reportedly discount collateral values across the board when performing safety and soundness exams. In response, banks establish their own base value for loan values on real property, regardless of current comparable sales data or supporting information used through the appraisal process to determine current value. This artificial manipulation of value results in a higher down payment requirement on behalf of the borrower, limiting those wishing to invest in real estate. Interest rates charged by lenders are considerably high in relationship to their cost of funds, adding to their profit margins without adding loan assets to their portfolios. Most lenders will not quote long term rates past a five year commitment, and would rather work with a variable adjusting rate, again to protect their spread in anticipation of a rising rate environment. To conclude, protection of profit margins over-ride compensation for risk in today’s loan environment. Lenders are not active in pursuing new loan accounts. This may have a negative impact on land values if cash is short.

Macroeconomics

Rumors of anticipated inflation resulting from devaluation of the US Dollar will reduce purchasing power and consumer confidence. Raising the Fed borrowing rate has been traditionally used to curb inflation. Fear in repeating history with double digit interest rates weighs on older generations, recalling a surge in foreclosures and a correction of land values in the 1980′s. Many economists believe another correction is yet to come, created mostly by the enormous national debt to service. Whether a correction would negatively affect eastern Montana as significantly as other areas, is uncertain. Generally, areas of agricultural influence maintain value better than areas based on commercial or recreation if such a correction is experienced.

Cost for an acre of land in eastern Montana as compared with other areas of the country is lower, thereby allowing an investor to own more acres of land for their money. This makes land in Eastern Montana an attractive investment for those seeking open space and remoteness. Obviously, any changes in governing regulations adverse to owning real estate may propose lower values. Some adverse regulations that may affect future property value could be an increase in property taxes, areas with endangered species of wildlife, or land adjacent to public lands or flowing rivers. To conclude, in considering outside influences on property values, there are many conflicting indicators to determine what future land values in southeastern Montana will do.

Microeconomics

Recent revival of the Belle Creek oilfield has created more employment and tax revenue for Powder River County. Since the 80′s, Belle Creek has been mostly inactive. The oil field along the Anticline region in Fallon County has experienced similar revival. Recently, higher oil prices coupled with new techniques such as well-fracking and horizontal drilling has created an opportunity to extract more oil from existing wells.

An even more significant development is the recent $85 million option paid to the State of Montana to lease the Otter Creek Coal Tracts located in SW Powder River County, Montana, by Arch Coal. This area is deemed to hold the largest low-sulfur coal deposit in the country with as little as a 30′ overburden and 70′ seam. Arch will submit application in early 2011 to mine coal at Otter Creek. It is speculated that mining could begin as early as 2-5 years from now. Arch intends to hire from 200-400 full time employees to work at the mine with average salaries of $75K plus.

Finally, oil, gas, and CO2 pipelines are scheduled to be constructed through SE Montana over the course of the next 2-5 years, bringing in more workers and tax revenue to the counties.

Agriculture will continue to be the base of the local economy. Sheep and cattle markets are forecasted to remain strong over the next 2-3 years, minimum. Global demand and low livestock numbers make forecasts on markets easy. Red meat is still the most desired and nutritious protein source for humans. To conclude, the local economy promises to boom over the next decade. Demand for land and residential improvements are inevitable. Good paying available jobs coupled with that demand will most likely push real estate prices up in Powder River and Rosebud Counties respectively.