Changes in rangeland pricing method during the inflation-deflation price cycle

Abstract

Utah rangeland real estate underwent an inflation-deflation price cycle from 1975 through 1988. A total of 166 Utah land sales were analyzed to determine whether factors affecting rangeland prices changed during the price cycle. Regression analysis was used to test changes in method of pricing rangeland between the inflation phase (1975-81) and deflation phase (1982-87). The effects on sale price of parcel size (acres or hectares) and number of deeded animal unit months (AUMs) differed between the 2 time periods. Size of parcel sold significantly affected land price in the first time period, but not in the second. Conversely, the number of deeded AUMs did not significantly influence land price in the first time period, but did in the second. Thus rangeland tended to be priced per acre (hectare) during the inflation phase of the price cycle and per AUM of carrying capacity during the deflation phase. These results indicate that rangeland owners should try to maintain or improve range condition and carrying capacity to preserve real estate values during deflationary times.