Once again, it’s $1.35/AUM — just a token fee-

Like last year, the USFS and the BLM have announced that the 2013 grazing will a mere $1.35 per animal unit month (AUM).
In a news release, the agencies wrote: “An AUM or HM – treated as equivalent measures for fee purposes – is the occupancy and use of public lands by one cow and her calf, one horse, or five sheep or goats for a month. The newly calculated grazing fee, determined by a congressional formula and effective on March 1, applies to nearly 18,000 grazing permits and leases administered by the BLM and more than 8,000 permits administered by the Forest Service.” [boldfaces ours].

The agencies explain how the fee is calculated and the small range through which it is permitted to rise or fall.

“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. Under that 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 annually determined grazing 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. In effect, the fee rises, falls, or stays the same based on market conditions, with livestock operators paying more when conditions are better and less when conditions have declined.”

Notice that the calculation of the fee is based on the idea of protecting public land grazers from market prices.

It important to realize that the real culprits in this long continuing undervalue of the forage on our public lands is Congress. If fees are to rise more than what the formula allows (which is about a dollar higher), Congress has to take action. While this loss of revenue might not seem like much of the total deficit, some might think it galling when on March 1, both domestic programs and U.S. defense will be told by the stalemated Congress to take a huge funding cut. At the same time this low fee subsidy will continue unless it is somehow changed in bargaining between congressional Republicans, Democrats and the President.

Even the state governments all charge a good deal more than $1.35 to run livestock on the lands of the states, generally called the “public school endowment lands” granted at statehood, plus additions since, and minus the those sold since (a very common practice).
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Here is more information, numeric and graphical, on the history of the grazing fee. The piece charts the fee’s decline to becoming just a token charge. Federal Public Lands Grazing Fee. Western Watersheds Project.

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About The Author

Ralph Maughan

Dr. Ralph Maughan is professor emeritus of political science at Idaho State University with specialties in natural resource politics, public opinion, interest groups, political parties, voting and elections. Aside from academic publications, he is author or co-author of three hiking/backpacking guides.

24 Responses to Bureau of Land Management and U.S. Forest Service announce 2013 livestock grazing fees

  1. avatar Barb Rupers says:

    $1.35 in 1934 when the first grazing fee was established has a current buying power (2012) of $23.13. The subsidy gets larger every year there is inflation.

    What is the highest it has ever been? In what year?

    Our government participants don’t seem to be in a bargaining frame of mind.

    • avatar Linda Horn says:

      I’m not particularly good a math, but multiplying $23.13 by 230,600,000 acres of public lands managed for grazing equals $5,333,778,000. Multiplying $1.35 by 230,600,000 equals $31,860,000. $5,333,778,000 minus $31,860,000 equals $5,301,918,000. While $5.3 billion won’t retire the National Debt, it would certainly help important programs which have suffered major cutbacks, although it’s more likely Congress would vote itself yet another raise. Am I bitter? Damn straight!

    • avatar Ralph Maughan says:

      Barb Rupers,

      The grazing fee formula was created by the Public Rangelands Improvement Act (PRIA) of 1978.

      The Western Watersheds Project has a good discussion of the fee over time and in relation to inflation.

      http://www.westernwatersheds.org/issues/public-lands-ranching/federal-grazing-fee/

      • avatar Linda Horn says:

        WWP ROCKS!!! I wish they had a Director for New Mexico. Does anyone know if they’ve ever teamed up with PEER and POGO?

  2. avatar Linda Horn says:

    Interesting Wikipedia entry. The U.S. scheme seems unnecessarily complicated, and I have no idea how they keep arriving at exactly $1.35 with so many variables. I’m partial to the Canadian model, since it appears to be tied to the actual value of the cattle averaged over 3 years.

    From Wiki: Various formulas are used for calculating grazing fees on public lands. Some examples are:

    For federal rangelands of the United States, the grazing fee “equals the $1.23 base established by the 1966 Western Livestock Grazing Survey multiplied by the result of the Forage Value Index (computed annually from data supplied by the Statistical Reporting Service) added to the Combined Index (Beef Cattle Price Index minus the Prices Paid Index) and divided by 100; provided, that the annual increase or decrease in such fee for any given year shall be limited to not more than plus or minus 25 percent of the previous year’s fee, and provided further, that the fee shall not be less than $1.35 per animal unit month.”[6] Apart from the $1.35 floor, which took effect on February 14, 1986,[6] this is the same as the fee calculation that applied for the grazing years 1979 through 1985.[7]

    For lands of the state of Oregon, the grazing fee is the greatest of a) $250; (b) $4.25 per AUM; or (c) The carrying capacity of the leasehold in AUMs multiplied by the annual AUM rate (expressed in dollars per AUM). The annual AUM compensation rate equals G x CC x S x P, where G is animal gain per month (set at 35 pounds, since January 1, 2010), CC is marketable calf crop (fixed at 80 percent), S is state share of calf gain (set at 25 percent on January 1, 2012), and P is calf price (90 % of the USDA national price data indicating average sale price for the preceding one year period based on an October through September year).[8]

    For a grazing license or permit on Crown land in the province of British Columbia, the grazing fee per authorized AUM is “93% of the average gross sales revenue per kilogram for live beef cattle marketed during the immediately preceding 3 years through the B.C. Livestock Producers Cooperative Association.”.[9]

  3. avatar Linda Horn says:

    Wikipedia source for my comment: http://en.wikipedia.org/wiki/Grazing_fee

  4. avatar Linda Horn says:

    Wiki entry on “Animal Unit”. There’s plenty of important info here, but I’m not experienced enough to draw conclusions from it. http://en.wikipedia.org/wiki/Animal_unit

  5. avatar Linda Horn says:

    September 2005 GAO report to Congress on Livestock Grazing. I love it when recommendations by the government’s own reporting agency are totally ignored. Makes me feel all warm and fuzzy when a study you and I paid heaven only know how much for is pretty much disregarded, but that seems to be SOP.

    http://www.gao.gov/new.items/d05869.pdf

    • avatar CodyCoyote says:

      Memory isn’t what it used to be ( think about that ) but I do seem to recall that the very highest absolute dollar fee assessed for an AUM was done by that vilified Tax and Spender that headed the D o Interior, Bruce Babbitt , during the Clinton Admin. The AUM made it all the way up to about $ 1.95. As others have pointed out, when adjusted to inflation since the Taylor Grazing Act passed in the 30’s, an AUM should realistically be in the $ 12-20.00 range today . WHICH by the way is also concurrent with the same graze if it is on some State allotments and most Private pastures.

      When Babbitt raised the fee to almost two whole dollars, the ranchers howled like you had done to them what they do to bulls to make steers…

      Ridiculous. Apparently , deficit reduction and equitable revenue raising at the federal level are just talking points and so much BS. Or as if the 11th Commandment on Moses’ stone iPad said ” Thou Shalt never Raise Grazing Fees ” or something….

      • avatar Ralph Maughan says:

        One of the petitions that got enough signatures to merit a formal reply from the Obama Administration was to raise the grazing fee.

        The Administration rejected it. Here is the storyHere is the story in the NYT

        • avatar ramses09 says:

          That is sad. You get enough signatures & they don’t even take the time or look @ the resources to even consider it.

          • avatar Louise Kane says:

            A poor response indeed. From the same NY Times article, This was interesting,

            “A recent order from a U.S. District Court in Montana also requires the Forest Service to prepare an environmental impact statement in order to continue applying aerial chemical fire retardants to fight wildfires, Holtrop said.”

            anyone know what they use?

        • Hi Ralph,
          One minor point of clarification about the petition to raise the grazing fee: it was submitted under the Administrative Procedures Act, and not one of the types of petitions that needs a certain number of signatures to get attention. The Administration didn’t reject it until they were forced (through a lawsuit) to respond to it.

    • avatar Barb Rupers says:

      Thanks, Linda. It contains a lot of interesting data.

  6. avatar Ralph Maughan says:

    There is a justification often given for the token public lands grazing fee, namely that the public lands grazing lease, unlike private lands, covers infertile country full of predators and recreationists. However, that kind of makes the Wildlife Service’s activities in the Western States redundant unless people think killing our native predators to help the subsidized is a proper function of the federal government.

  7. avatar SAP says:

    Not advocating this, just wondering: with the grazing fee so low, does it even pay for the transaction costs of handling the money? Obviously, the agencies lose money on this because they have to do monitoring.

    (500 AUMs x $1.35 = $675 monthly, x 4 months = $2700 gross revenue on a grazing allotment; for the sake of argument say we have a federal employee out there whose total annual employment costs are $75,000 per year [not outrageous at all], counting payroll tax and all benefits, or about $300 per day, plus vehicles, horses, ATVs or other equipment. Call it $400 a day to be on the ground monitoring things. Add in time that employee spends on planning, meetings, NEPA, and so on, and that $2700 in revenue gets gobbled up pretty quickly).

    Do they lose even more due to accounting for the grazing fees?

    Similar to someone donating $1.35 to a non-profit and expecting to have a tote bag and a tax-deductible receipt sent to them(yes, the IRS doesn’t require receipts for such small donations, but play along . .. ), maybe along with some other transaction costs, it often doesn’t pencil out to handle such small amounts.

    Maybe, just as a symbolic act to call this thing what it is, BLM & USFS should just set the fee at a “why bother?” zero.

    [And yes, I get it that similar things could be said of recreation. My libertarian side supports more fees on recreation, too.]

    • avatar CodyCoyote says:

      SAP—this much I know . When a rancher puts a cow and her calf on summer range public graze,he typically gets four months time on the allotment. So he’s paying the US Treasury the grand sum of $ 5.40 for the pair for four months graze.

      What does the rancher get in return ? He adds 100-200 lbs. weight to the same pair of cows per month. So he gains 600 pounds of carcass weight which at current sale ring price for feeder cows is about $ 660.00

      What he paid for the public graze was an expense of less than one percent of his sale weight. Not bad…

      … unless you realize that we the taxpayer subsidized that. Which is why I contend that paying a fair market value for public graze closer to private graze fee will not put any ranchers out of business. ( tune out the whine ) In fact, they still make a good profit. Except it would be an honest profit.

      • avatar Shazzam says:

        Let it be known that the cattle ranchers using allotments in the wwnfs run more AUMs than contracted for and do not keep within their allotments. The cost for the FS management is MUCH greater than the return and the cost to wildlife is even greater. We the people are making the cattlemen even more wealthy plus they get all of the TAX Write Offs!!!! SO TAKE THAT MR. AND MRS. AMERICA

        • avatar Ralph Maughan says:

          Shazzam, you are absolutely right. The kind of cheating is politely called “oversto cking” the grazing allotment. It is especially galling because they steal the grass on top of the ridiculous low fee they are charged.

  8. avatar ramses09 says:

    The last time I looked (photos) cattle do not do any good to land that they are grazing upon. They in fact, destroy it. So they should put the money they get for grazing into the land that got destroyed by the (grazing) cattle.

  9. avatar Thomas Murphy says:

    it seems to me your still all missing the point – the grazing of public lands with cattle and sheep destroys them. this is the ranchers welfare program and to make it work they are killing off our wildlife to expand the public grazing for the ranchers. our politicians are thieves that take kick backs for this and other programs for the special interest groups. we have let our politicians run amok for so long they are nearly untouchable. try writing them and all you get is a generic blow it out your ass response.

  10. avatar malencid says:

    A few years ago on the North Fork of the Tongue in Wyoming I ran into a fishery biologist. I commented on the fence the forest service was putting up, thinking it was for keeping the cows out of the stream. He then told me no, it was to keep the cows in the stream and off the road that runs by it. He also said that when he located near extinct populations of cutthroat trout in small feeder stream in the Bighorns; he would write it up for better protection from the grazing. This resulted in phone calls from the grazer to the Wyoming delegation who then contacted his supervisor recommending his dismissal. He could take this any longer and left the agency. It seems that anyone who is doing their job at the governmental level is dismissed or disappointed.

  11. avatar Ralph Maughan says:

    Here is a new story on the continuance of the federal grazing fee at its trivial $1.35 per A.U.M.

    http://www.idahostatesman.com/2013/03/02/2474116/federal-grazing-fee-stays-same.html

    Sadly the sequester won’t raise it because it is a fee, not a cut. The sequester will instead reduce the money spent on grazing management, and what that will mean remains to be seen.

    • avatar JB says:

      “he sequester will instead reduce the money spent on grazing management, and what that will mean remains to be seen.”

      One word: Enforcement. The only thing they can cut without upsetting those in power.

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