A pop-up crop: Agritourism grossed $674M from 13,334 farms in 2012
June 3, 2016
Summer is just around the corner, and that means South Dakota residents will soon see a swarm of motorcycles and campers driving west along I-90. While the buzz of tourist season has its ups and downs, the economic driver can't be ignored, and many ranchers are adding agritourism as another "crop" to their operations.
Whether that's adding power hook-ups for camping spots in pastures, offering a dude ranch experience, providing hunting and fishing services, or opening up bars, restaurants, lodges or wedding venues, tourism has offered many of the state's ranchers the opportunity to diversify and increase cash flow to their livestock businesses.
"Livestock are a commodity; prices go up and down, but expenses always stay up," said Robert Boylan, a cattle and sheep rancher from Newell, S.D. "Agriculture is such an up and down business that I wanted to add a more steady income, so five years ago, we opened up the Spur Creek Saloon & Ranch as a bunk house for bikers during the Sturgis Motorcycle Rally. Since then, it's grown into a bar, lodge and wedding venue. Tourism seems to be much more stable than the livestock business."
Boylan will always be a rancher at heart, but said he enjoys the opportunity to visit with tourists from around the world and share his way of life with them.
“It’s a family operation where the kids and grandkids get involved, and the hunters really like to get to know our family and be part of our ranch life for a few days.”Gary Rose, Rose L7 Hunting owner
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"The way we live our lives here in these remote areas and the way we do things appeals to a lot of people who are coming from urban areas," he said. "I enjoy relaxing and visiting with our guests. I feel like I've paid my dues working hard in the agricultural industry to get to slow down a little bit. And, I think it's important for rural and urban folks to come together and have conversations, so our consumers can realize that ranchers are doing the best we can to produce safe, great tasting food for them to enjoy."
When Boylan's daughter got married, he built her a barn with old materials and realized he could add a wedding venue to the Spur Creek Saloon & Ranch. He was already busy hosting bikers during the annual bike rally, but with a new barn, camping facilities, cabins and bar in place, it made sense to add his barn as a location for people to host weddings, anniversaries, birthdays and other celebrations.
"It's like stepping back in time for our visitors," he said. "Our guests can see what an actual working ranch looks like while spending time in our rustic barn or cabins.
For $2,500, the facilities can be rented out for events like weddings. The Spur Creek Saloon & Ranch also has a beer license and a subleased liquor license.
"Liability insurance was a big factor in this business; it's expensive, but if you're going to add agri-tourism to your operation, you have to carry it," he said. "There are also a lot of state and federal regulations to keep up with anytime you open up a commercial business, which gets expensive and time-consuming. However, we like the steady income that tourism brings to our ranch, and as we get older, we will phase out of the livestock business and help young folks get into it. It's so difficult to get into ranching anymore, and I plan to pass on some of my leases to the next generation, so they can get started in this business."
Boylan hopes to add a dude ranch to the business someday, and he advises other ranchers to try things slowly, figure out what works for the operation, and don't throw your eggs in one basket.
"We have continued to grow, and I'm just doing what I love to do," Boylan said. "If I can get some extra cash flow from the agritourism deal, that's great. I've realized this business is something I can do as I get older and running stock is harder for me, and I can help our kids take over the ranch."
According to the U.S. Department of Agriculture Census of Agriculture, agritourism grossed $674 million from 13,334 farms and ranches in 2012. If land owners are considering opening up their ranches to tourists, the Agricultural Marketing Resource Center said passion is key.
"If you decide to develop an operation, it is critical that you undertake something that you understand and are passionate about, and that the scale of the undertaking fits your lifestyle," according to the center. "Once that is done, it is extremely important to develop a marketing plan that looks at the available demographic you hope to attract and ways to use targeted communications to reach them. Much of your marketing will be word-of-mouth from satisfied customers.
Agritourism can include retreat or rendezvous centers, nature centers, farm tours for families and school children, farm-based lodging, cross-country ski or snowshoe trails, children's educational day camps, bed and breakfasts, corn mazes, haunted forests, pumpkin patches, fly fishing, horseback riding, or bird or big-game hunting preserves. The sky is the limit for what ranchers could potentially offer as incomes sources to their operations.
For Gary Rose, a rancher from Chamberlain, S.D., hunting has always been a passion, and inviting people to his ranch to go pheasant hunting has been an excellent way to diversify his operation.
"We have a cow-calf operation and retain ownership on our calves to feed out in our feedlots," said Rose, the fourth generation on the Rose place, which was homesteaded in 1906. "My dad, Roy, son, Jesse, and his family are all part of the ranch, and on the hunting side, we get the entire family involved."
Rose L7 Hunting opened up for business in 1997, and they can accommodate 24 guests at a time.
"My wife Tana manages the cafe at Al's Oasis, and there were always a lot of hunters at Al's who were looking for places to stay and hunt," said Rose. "We built a lodge 11 years ago because there aren't many hotels available from Mitchell to Chamberlain and Chamberlain to Murdo, and we just kept getting guys come back each year."
Pheasant hunts at Rose L7 Hunting are $300/day and includes lodging with a full kitchenette, guided hunting and bird cleaning.
"We shoot about 4,000 birds/year, and we put some of our land into a preserve to allow us the licensing opportunity to clean birds," he said. "It's a family operation where the kids and grandkids get involved, and the hunters really like to get to know our family and be part of our ranch life for a few days."
Rose said his family treats hunting like another crop, and that means managing the birds to ensure good hunting each year.
"We plant 100-150 hunting strips of corn and milo for the birds each year," he said. "In the winter, our cattle graze the strips, so I don't have to buy as much hay. People always ask if I'm going to cut back on the cattle side, but I say that in order to have good hunting ground, I have to have cattle to manage the ground. Pheasants figure out where there's cattle, there's feed."
Rose echoed Boylan's advice about liability insurance. Each hunter must also sign a waiver when they check in.
"When we first got started, we ran the hunting business strictly off of the ranch corporation insurance," he said. "However, we soon decided to turn the hunting business into an LLC and separate it away from the ranch in case of a lawsuit. It just makes good business sense. Without the ranch, we wouldn't have the ground, so we try to protect the first business to have security for the second."
The Rose family also has hunters who come for the prairie dogs, as well as the occasional fisherman who wants to stay and hop on the river.
"Something like this doesn't happen over night; it takes time to work out the kinks, get established and let word-of-mouth travel," he said. "We have great clients who come every year. They love to get off the concrete and enjoy the great outdoors. I love the people we get to meet and the friendships that form. We've never advertised; it's all referral based. It's nice to be able to socialize with so many great people and make money doing what we love."