According to Northwest Farm Credit Services, the Montana farm and ranch market is the second largest in the country after Texas. Consisting of 59.8M acres, the farm and ranch market is 65% rangeland. The breakdown of farm and ranch land is illustrated below:
Breakdown of Montana Farm & Ranch Market by Acres
In terms of the agricultural markets in Montana, there are approximately 2.55M cattle, about 2.45 cows per person based on the estimated 2016 state population. Montana's wheat production is one of the largest in the nation in terms of bushels. Comparatively, Montana ranks #2 in barely production in the nation and #1 in pulse crops, which include peas, lentils, and chickpeas.
Though a large percentage of the private land in Montana has an agriculture use, many of the land transactions, specifically in the western part of the state, involve properties where the value is tied more to the recreational amenities than the agricultural utility of the property.
Considering recreational and agricultural properties, according to Clark Wheeler with Norman C. Wheeler & Associates, in 2016 for land sales of 80 acres or greater, the number of deeded acres sold was down 16% compared to the previous year; however, the total sales volume (in dollars) was only down 2.7%. Lack of large acreage, quality product was cited as the reason for fewer sales across all categories from $3M up to over $10M.
$1,426 / acre
Deeded Acres Sold
Total Sales Volume
Average Price / Acre of
Land + Buildings + Leases
Sales over $10M
Sales from $5M - $10M
Sales from $3M - $5M
$1,665 / acre
In addition to the year-over-year data shown above, the team at Norman C. Wheeler & Associates also produces an annual Western Ranch Study, which digs deeper, specifically focusing on sales greater than or equal to 640 deeded acres. The study is divided into eastern and western Montana. The distinction has a underlying geographic element, but more so represents a division of lands sold for recreational benefit foremost and those sold more for agricultural utility. Over time the boundary separating eastern and western Montana in the study has moved eastward. The highlights of the 2016 study* include:
- 89,658 deeded acres sold
- 44 sales
- Average age of a ranch buyer was 57 years old
- Average sale $3.6M
- Total sales volume of $137.4M
- $1,533 / acre (land + building + leases) not including timber sales
- $1,368 / acre (just land)
When looking at the "just land" sales per acre number, Clark categorizes 2016 as "stable, but softening" relative to the market over the last ten years. In 2007 the Montana land market had record high transactions at an average of $1909 / acre for just land, excludes the value attributed to buildings and leases. The farm and ranch market bottomed out in 2010 at $610/acre, which represents a 68% loss from the high. By 2014 the market came all the way back up to $1,465 / acre, a 140% gain over 2010. The figure in 2016 is only a 7% discount from 2014. In terms of price per acre 2014 through 2016 resembles 2004 through 2006. For reference, the price of land sold per acre excluding buildings and leases in 2005 was $1,361 / acre.
The $1,361 / acre number is a combination of recreation-driven and agriculture-centric sales, which represent a major bifurcation in market value. Recreational land sales in 2016 averaged $1,651 / acre whereas land bought for agricultural utility instead of recreational value traded at $967 / acre.
For properties between 160 and 640 acres in size, Gallatin and Ravalli Counties posted sales per acre at average prices far above the rest of the state:
- Gallatin County: $8,139 / acre
- Ravalli County: $5,350 / arce
- Other counties (average): $2,800 / acre
Within these averages there's a large differentiation between fishing properties and those without good, fishable water. Properties with a live-water fishing component represent nearly a 100% mark-up compared to those that do not have fishing. The average shown above incorporates all types of properties within the size range, those with fishing amenities and without.
The 2016 Western Ranch Study is not yet available on The Wheeler & Associates website, but Annual Land Studies for 2013-2015 can be accessed here.
*The 2016 excludes two sales from the year: a 1,071-acre sale for $14.395M; and, a 1,051-acre, $15M transaction, both of which were identified as outliers. These sales represent 2.7% of the acres sold and would skew the results by 20% if included in the 2016 averages.