An Occupation In Eastern Oregon

Controversial Federal Grazing Fees Not A Great Deal For Anyone

By Jes Burns (OPB) and Tony Schick (OPB)
Jan. 7, 2016 1:45 a.m.

With the armed occupation of a wildlife refuge ongoing in Eastern Oregon, there’s been renewed attention on federal grazing policy — and attempts to understand where the root of these rural frustrations lie.


Quite a bit has been said about what a deep discount ranchers are getting to graze their livestock on public lands — and how the U.S. taxpayer is essentially subsidizing those who do.  But as often is the case, the truth isn’t so cut and dry.

So why the talk about how cheap it is for ranchers to graze cow and sheep on federal lands?

Because at face value that’s exactly what it looks like.  Grazing fees are calculated in a weird unit called an Animal Unit Month – A-U-M – essentially how much it would cost to feed one cow and a calf for one month.  So on Bureau of Land Management and Forest Service land, that price is currently $1.69.

Now if you compare that to the going rate for private land, which averages about $20 per animal per month, it looks like ranchers are getting a huge discount to use public lands.

But that’s not the case?

It isn’t. Because those two numbers include very different things.

"If you just look at the grazing fee itself, and you see the small amount on public land and then a 10-fold increase on private land grazing fees, it looks like — people call it a subsidy," said John Tanaka, a rangeland economist at the University of Wyoming. "But when you consider all the costs involved in grazing, they're roughly equal. Or in some cases, public land grazing can cost the rancher more."

Joe Villagrana, a ranch manager from Lake County, in Southeast Oregon, says permits on public land carry their own costs.

"What people don't realize is, by holding the permit, you are responsible for maintaining the fences, maintaining water, for example like water troughs," Villagrana said. "And that costs money.  So you add up time, labor, fuel, material and all that, it actually gets to be very expensive.  So yeah, that sounds pretty cheap, but with everything that's put on us to keep that permit, it costs us a lot of money."

On private lands, a lot of this infrastructure is already included in that up-front price.

And actually when the formula was designed to calculate federal grazing fees back in the 1960s, it tried to take in account all these additional out-of-pocket expenses. The goal was to keep the actual amount ranchers were paying the same, whether they were on federal or private land.


Did they succeed?

In the broadest sense, yes. The University of Idaho's Neil Rimbey, who has studied the costs associated with grazing on public and private land, says it has.

"I feel pretty confident that those costs are comparable, public and private," Rimbey said.

The rates don't match up perfectly – remember that often these are nationwide averages. And prices vary by pretty widely whether you're in New Mexico, California or Idaho.  

So for example, if you're in Nebraska, where the private grazing fee is around $45, ranchers potentially could do a lot better to graze on federal land. But in Oregon and Washington, where the private averages come in under $20, it's likely closer to a wash.  
So ranchers aren't so much getting a deep discount across the board, but some of them out there are getting a really good deal.

Still though, federal agencies are only getting a dollar and change per cow to graze.  Does that even cover their costs?

That’s where critiques of the system have some merit.  The BLM isn’t coming close to breaking even — some calculations put the shortfall at about $120 million per year. And it’s being made up by the U.S. taxpayers.  That works out to each man, woman and child in the United States paying 38-cents per year so that privately owned cows can graze on public lands.

And this reliance on the taxpayer means the BLM has to rely on Congress to get funds – and arguably there’s not enough for the grazing program to effectively monitors the range environmentally or make things run smoothly for the ranchers – thus there’s a lot of tension there.

Kristen Stade, with Public Employees for Environmental Responsibility, says increasing grazing fees could help.

“It’s certainly a situation where the BLM would fund itself by actually collecting what these lands are worth. They would be able to do a lot of the monitoring they’re required to do.”

Well, if ranchers are already paying close to the private rate, could they afford to pay more to graze livestock on public land?

Economists say the market could bear a higher grazing fee on public land.

“If they’re going to go out of business for raising the grazing fee by 80 cents, they probably don’t have any business being in the business in the first place," said L. Allen Torell, a University of Idaho economist who, along with Rimbey, published a study on rangeland cost comparisons.

In Idaho, for example, lands can go out for potential competitive bids at prices as high as $8. And those bids take place for the right to lease that land for the next 10 or 20 years.
The state of Oregon is charging more than $15 this year. And you'd expect some of those similar out-of-pocket expenses to be required on state land as they are on federal land.

Probably the biggest challenge is changing the formula the feds use, or even throwing it out completely. Rimbey said bidding on permits, like they do in Idaho, would get closer to reflecting what the actual market value of the grazing is. But that would require a change to a law that has essentially been the same since 1966.