Comparison of forage value on private and public grazing leases

Abstract

Federal land grazing fees have been set by a formula that uses a base rate developed from a 1966 study comparing total grazing costs on private and public lands. A similar market comparison was recently conducted in Idaho, New Mexico, and Wyoming. Total grazing costs were adhered through personal interviews from 258 ranchers using 245 public grazing permits and 149 private leases. Public land grazing permit values were also estimated in each state. This study demonstrated that many public land ranchers have been willing to pay more for grazing than the apparent value implied from the private forage market. With the 1992 grazing fee of 1.92/animal unit month (AUM), 34% of Bureau of Land Management (BLM) cattle producers, 62% of U.S. Forest Service (USFS) cattle producers, 60% of BLM sheep producers and 92% of USFS sheep producers paid more for grazing public lands than did those grazing privately leased lands. Estimated forage values averaged 3.63/AUM for cattle grazing BLM land, and were negative for cattle using USFS lands and for sheep using both BLM and USFS allotments. Using a 3.35% interest rate to amortize permit value, the annual value of public land forage was estimated to be from 3 to 5/AUM. Doubts were cast about the standard assumptions that ranchers have profit maximization as their primary goal, that permit value measures only excess forage value, and that sufficient private leases are available for a valid comparison between private and public forage markets.