Estancia is located on the eastern side of the Manzano Mountains between the mountains and the Salt Lakes. It was shown on a map made in 1779 by Don Bernardo de Miera y Pacheco as being "destroyed by enemies." In 1819, Don Facundo Melgares gave 1.28 million acres in the Estancia Valley to Don Bartolome Baca as a huge land grant. Then in 1845, Governor Manuel Armijo gave 350,000 acres surrounding Estancia itself to Don Antonio Sandoval as another land grant. That put the Sandoval Grant inside the Baca Grant. In 1874, Baca's heirs sold that grant to Don Manuel Antonio Otero and he and his family ran some 30,000 sheep on the huge property. In 1878, a Boston millionaire named Joel P. Whitney came into possession of the Sandoval Grant. This set the stage for a shooting war that erupted in July, 1883. Whitney's brother, with some friends, and Otero's son, also with some friends, decided to settle the 38-year-old dispute once and for all. When the smoke cleared, the young Otero was dead and the Whitney was badly wounded. The Gringo & The Greaser (a newspaper based in Manzano) published an extra edition about the affair but, of course, nothing was settled until it got into the federal land claims court. The court denied the claims of both parties but did give them about 1 square mile each and opened the rest of the property to homesteaders.
The Santa Fe Central Railroad built a line into the area in 1903 and, that being a very wet year, the land rush was on. Shortly, Estancia was the declared "Pinto Bean Capital of the World." However, the weather soon returned to its usual drought condition and so much of the countryside had been plowed to grow beans that the area was soon as denuded of top soil as the Dust Bowl regions (although the problem lasted longer here). The population dropped off over the years until there came a point where the federal Soil Bank started paying bean farmers not to plant. Eventually most of the dry-land farms were absorbed into large ranches or became irrigated farms using water from the valley's aquifer.