Reduced public land grazing fees welcomed by ranchers
Livestock producers found some reason to smile over government regulations in late January as the Department of Interior announced a reduction in 2017 grazing fees. The new fee will be $1.87 per animal unit month (AUM), or head per month (HM), on lands managed by the Bureau of Land Management (BLM) and U.S. Forest Service (USFS).
The new fee is down 13 percent from the 2016 fee of $2.11 per AUM/HM. An AUM or HM—treated as equivalent measures for fee purposes—is the use of public lands by one cow and her calf, one horse, or five sheep or goats for a month.
In Nevada, where there is little private grazing land, David Stix, President of the Nevada Cattlemen’s Association, told WLJ, “The lowering of fees is huge.” He noted that although it isn’t noticeable at the retail level, the livestock industry recently went through the largest market reduction in history. “The lowering of grazing fees is timely and much appreciated to help deal with ever-rising costs.”
Stix went on to say, “Public grazing is so important to us in the West for this simple reason: It’s all we have out here. Some argue that we graze on federal lands because it’s cheap feed. This is completely false! When you factor in the amount of work public grazing ranchers do to maintain fencing, keep water flowing and just general permit maintenance, we pay way more than the private grazing ranchers.”
Asked about responding to those who cry, “welfare rancher” because of federal permits that are less than private grazing leases, Ethan Lane, Executive Director of the Public Lands Council (PLC) and National Cattlemen’s Beef Association Federal Lands, told WLJ, “The grazing fee is only one small part of the story. The federal grazing program was never intended to be a for-profit program. It is a management program. As such, you have to recognize both the fees paid in and also the benefit received by the federal agencies. If ranchers weren’t there to manage that 250 million-odd acres of grazing land in the West, and by manage I mean reduce fuel loads for wildfire and maintain water sources that are used by wildlife, as well as livestock and wild horses and others, maintain fence lines and infrastructure. If ranchers weren’t there doing that work, it simply wouldn’t get done.”
Lane continued, “When you talk about the grazing fee and the benefit to taxpayers, it’s important that people recognize that other side of the coin and the tremendous contribution made by our federal grazing permittees to the American people through their stewardship of those lands.”
According to PLC, public grazing saves the taxpayer $3 per acre in cost to maintain public lands that have grazing. It costs the BLM $5 per acre to maintain nongrazed lands and $2 to maintain grazed lands.
The new grazing fee, determined by a congressional formula, goes into effect March 1 and applies to nearly 18,000 grazing permits and leases administered by the BLM and nearly 6,500 permits administered by the USFS.
The formula used for calculating the grazing fee, which was established by Congress in the 1978 Public Rangelands Improvement Act, has continued under a presidential executive order issued in 1986. The fee is computed by using a 1966 base value of $1.23 per AUM/HM for livestock grazing on public lands in western states. The figure is then calculated according to three factors—current private grazing land lease rates, beef cattle prices, and the cost of livestock production. The fee can rise or fall based on market conditions, with livestock operators paying more when conditions are better and less when conditions have declined.
Under the 1986 executive order the grazing fee cannot fall below $1.35 per AUM, and any increase or decrease cannot exceed 25 percent of the previous year’s level. The last 25 percent increase occurred from 2015 to 2016 when the fee went from $1.69 to $2.11 AUM/HM.
Lane, told WLJ the grazing fee formula is intended to rise and fall with conditions on the ground. “We’re glad to see that once again this illustrates that the formula works and that those prices are going to come down and provide a little bit of relief to producers who are being pinched in other areas right now. It’s not a magic bullet either way but it is certainly a little bit of welcome relief right now.”
These grazing fees apply to BLM and USFS land in Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington and Wyoming.
Private grazing fees in those 16 western states range from $9-39 per AUM, according to January 2016 statistics from USDA, National Agricultural Statistics Service. Lane said it is important to note that “There is a lot of added cost and compliance issues with running cattle or sheep on federal land that at the end of the day bring federal grazing permittees within line with those private land lease rates.”
Terry Fankhauser, Executive Vice President of the Colorado Cattlemen’s Association, said his organization “supports the formulaic approach in determining federal lands grazing fees due to its consideration of the major input costs. Due to diminishing calf prices over the past two years and a softening in lease rates, the reduction of 24 cents is a welcome adjustment for livestock producers considering economic variables the industry is experiencing.”
Permit holders and lessees may contact their local BLM or USFS office for additional information. — Rae Price, WLJ Editor