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Ready, Aim, Shoot?

A hunting program can add to the ranch bottom line, but there are many questions when determining if this pencils out for you.

By Lorie Woodward Cantu

Despite Texas' urbanization, hunting has remained a favored pastime for many people, both those who live in-state and out-of-state. In 2007, which is the most recent year of data available, the economic impact of hunting in Texas was $2.6 billion. It is big business.

Since the 1940s, leasing ranchland for hunting has been part of the Texas landscape. For many operations, it is an important income stream and diversification tool.

"Revenue from hunting is a proven way to enhance an operation's bottom line,"
says Carl Homeyer, state ag economist for USDA Natural Resources Conservation Service (NRCS) in Temple. "But hunting operations, like all business enterprises, don't run themselves, so landowners must consider what business configuration will work best for them."

In Texas, hunting opportunities come in many forms. Landowners can:
• lease their land to an outfitter, placing responsibility for all hunting-related activities on the outfitter
• lease their land to an individual or group for the length of a season or for the year
act as their own outfitters, offering hunting packages directly to hunters
• offer day hunting
Each requires a different level of involvement from the landowner.

"Any way you look at it, hunting operations are the hospitality business," says Homeyer. "The first questions landowners must ask themselves are ‘How involved do I want to be in the hunting enterprise on my ranch?' and ‘Do I have the time, energy and temperament to entertain hunting guests?'"

Some people enjoy the challenge of marketing hunts and entertaining an ever-changing
pool of hunters. For them, the opportunity to enjoy higher income is worth the additional work. In these cases, landowners are prepared to deliver a complete "experience," including, in most cases, lodging and food.

The accommodations range from rustic to plush. The experience becomes important because landowners can't guarantee that hunting guests will go home with an animal, so some ranches have added extras like shooting ranges or access to fishing ponds. Some ranches provide processing facilities.

"Generally, the more amenities a ranch offers, the higher the price that can be charged for access," Homeyer says. "Of course, the more a ranch invests in infrastructure, the higher the risk."

Some people prefer to receive a single check from an outfitter who handles every aspect of the hunting operation. In these scenarios, the outfitter and the landowner enter into a lease that clearly spells out the expectations for the business relationship.

Depending on what is included, the outfitter may be responsible for all wildlife management activities, including population surveys and feeding programs, as well as all hunting activities, finding hunters and hiring guides and cooks.

Providing annual leases to individuals or groups is another popular option. In this scenario, landowners, once they have found a compatible group, play a small role in the actual hunting season.

"For an annual lease to be successful, landowners have to spend the time and effort
finding people who they believe are responsible and trustworthy," Homeyer says. In this case, the lease and the ranch rules are very important because they form the basis of the working relationship and the shared understanding of what management goals are important.

"When the lessees and the landowners mesh, it can be a great thing," Homeyer says. "There are ranches in Texas where hunting leases have passed through multiple generations of both the hunting and the land-owning families."

Day leases offer another option, but they can be variable. First, the landowner has minimal control over who comes on the property and limited knowledge of their skill level or personality. Second, because this model more closely resembles public hunting, the prices paid per day may be lower than with other options. Third, because this model relies on "drive-by" traffic, it works better if the property is within easy driving distance of a major metro area. Fourth, it is a boom or bust model, meaning that some days there may be more hunters than space and other days there may be no hunters at all.

"Hunting provides a myriad of opportunities for landowners, but these opportunities all come with a cost," Homeyer says. "Landowners need to carefully consider the intangible costs of time and potential stress as well as financial costs to figure out which option will work best on their ranches and for their families."

Editor's Note: This is the eighth in a 12-part series focusing on using partial budgets to answer questions in a technique commonly known as "penciling it out." Because Texas and Oklahoma are so diverse and each ranch is unique, the series was not designed to provide a one-size-fits-all answer. Instead it was created to help producers become familiar with a handy tool that can be used to strengthen the bottom line. The series has been developed in collaboration with Carl Homeyer, state ag economist for the USDA Natural Resources Conservation Service (NRCS), Temple. Homeyer earned his bachelor's degree in Range Science and his master's degree in land economics and real estate from Texas A&M University. Before joining the NRCS in 2009, Homeyer operated his family's Burleson County ranch, which also includes broiler houses, while owning and running several small businesses.

"Ready, Aim, Shoot?" is from the August 2013 issue of The Cattleman magazine.