Competitive pricing for the McGregor Range: Implications for federal grazing fees

Abstract

Competitive bidding is an acceptable way to determine an efficient price to both buyer and seller. The quasi-competitive bid structure used to price federal forage and lessor-provided services on the McGregor Range in New Mexico indicates that the efficient market price for federal forage, services, and facilities had an upper value of 4.88/AUM during the 1992 grazing season. The facilities and services provided on the McGregor Range had a value of 1.96/AUM to the ranchers leasing the bombing range. The residual amount of 2.92/AUM represents the estimated value of high quality federal forage during 1992. The total cost of grazing McGregor Range was estimated to average 16.78/AUM during the 1992 production year. This is less than the cost of leasing comparable private land (19.68/AUM) or BLM land (21.06/ AUM) in New Mexico.