Ranch-Level Economic Impacts of Altering Grazing Policies on Federal Land to Protect the Greater Sage-Grouse

Transcription

1 University of Wyoming From the SelectedWorks of John A Tanaka October 23, 2014 Ranch-Level Economic Impacts of Altering Grazing Policies on Federal Land to Protect the Greater Sage-Grouse John A Tanaka, University of Wyoming Neil R Rimbey, University of Idaho L. Allen Torell, New Mexico State University Available at:

2 Ranching Economics and Sage-Grouse John Tanaka, University of Wyoming L. Allen Torell, New Mexico State University Neil Rimbey, University of Idaho Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission

3 Sage-Grouse and Ranching Large expanses of varied habitat Alternative forage sources Change in season of use or amount has economic impact Overall ranch profitability Risk of negative returns

4 Impacts* Fire Habitat changes Invasive plant species Land use change Predation Hunting Livestock grazing Sage-grouse Distribution (USFWS) * Wambolt, C.L., A.J. Harp, B.L. Welch, N. Shaw, J.W. Connelly, K.P. Reese, C.E. Braun, D.A. Klebenow, E.D. McArthur, J.G. Thompson, L.A. Torell, and J.A. Tanaka Conservation of greater sage-grouse on public lands in the western U.S.: Implications of recovery and management policies. Policy Analysis Center for Western Public Lands. PACWPL Policy Paper SG

5 Social and Economic Issues Public Land Ranchers Rural Communities

6 Ranch-level Economic Impacts Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission Torell, L.A., N.R. Rimbey, J.A. Tanaka, D.T. Taylor, J.P. Ritten, and T.K. Foulke Ranch-level economic impacts of altering grazing policies on federal land to protect the greater sage-grouse. University of Wyoming, New Mexico State University, University of Idaho, and the Western Rural Development Center. University of Wyoming Extension Bulletin B Available online at

7 Focus Representative ranch models Oregon, Nevada, Idaho, and Wyoming

8 Ranch-level Economic Impacts Update of models done in the early 2000 s Representative ranch Enterprise budgets 40 year model Cattle-fax prices Impacts

9 BLM Permit Changes Base run Sage-grouse management on BLM permit 1 month delay with AUM adjustment* 1 month early with AUM adjustment* 1 month delay and 1 month early with AUM adjustment* 25, 50, 75, and 100% AUM reduction 11/16-12/15 Deeded, Aftermath, Pasture, Hay 10/16-11/15 State, BLM, Deeded, Aftermath, Pasture 12/16-4/15 Hay 9/16-10/15 State, BLM, Deeded, Aftermath, Pasture 4/16-5/15 State, BLM, Deeded, Pasture 5/16-9/15 State, BLM, Deeded, Pasture *Boyd, C.S., J.L. Beck, and J.A. Tanaka Livestock grazing and sage-grouse habitat: impacts and opportunities. Journal of Rangeland Applications 1:58-77.

10 GAMS Model Multiperiod, Recursive LP Key Variables Key Relationships Key Variables Outputs Impacts Key Variables Key Relationships Key Variables Outputs Impacts

11 Wyoming Steer Calf Prices Adjusted Average Calf Prices (adj. to 2012) Year01 Year03 Year05 Year07 Year09 Year11 Year13 Year15 Year17 Year19 Year21 Year23 Year25 Year27 Year29 Year31 Year33 Year35 Year37 Year39 Year01 Year03 Year05 Year07 Year09 Year11 Year13 Year15 Year17 Year19 Year21 Year23 Year25 Year27 Year29 Year31 Year33 Year35 Year37 Year ID NV OR WY Steer Price Heifer Price Source: Cattle-Fax 2012

12 Results of the Sage-Grouse Economic Impact Model Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission

13 Results of the Sage-Grouse Economic Impact Model Season of Use How does a rancher allocate forage among seasons? Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission

14 100% Idaho Base 80% 60% 40% 20% 0% 100% 3/1-4/15 4/15-5/15 5/15-9/15 9/15-10/15 10/15-11/15 11/15-12/15 12/15-3/1 Idaho - No BLM Spring 80% 60% 40% 20% 0% -20% 3/1-4/15 4/15-5/15 5/15-9/15 9/15-10/15 10/15-11/15 11/15-12/15 12/15-3/1 BLM State Deeded Meadow hayland grazed/ hayed Meadow grazed Raised meadow hay Purchased meadow hay Purchased alfalfa hay

15 Changes from Loss of BLM Season of Use BROOD COWS Change in Net Annual Income ($) ID NV OR WY $0 -$10,000 -$20,000 -$30,000 -$40,000 -$50,000 Idaho Nevada Oregon Wyoming Spring Fall Spring and Fall

16 30 Probability of Negative Annual Net Returns BLM Season of Use Percent Idaho Nevada Oregon Wyoming Base No Spring No Fall No Spring and Fall

17 Results of the Sage-Grouse Economic Impact Model BLM Permit Reductions How does a ranch adjust when their federal grazing permit is reduced? Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission

18 Brood Cows Changes from BLM Permit Reductions Change in Net Annual Income $0 -$20,000 -$40,000 -$60,000 -$80,000 -$100,000 Idaho Nevada Oregon Wyoming

19 100 Probability of Negative Annual Net Returns BLM Permit Reduction Idaho Nevada Oregon Wyoming

20 Model Wrap-Up Ranch stays in business unless cash flow forces otherwise 100% BLM reduction forces continual borrowing with negative returns over half the time Representative ranch model Cannot predict how many ranches actually go out of business

21 Final Thoughts Ranchers have opportunities to adjust Opportunities have different impacts

22 Final Thoughts Ranchers have opportunities to adjust Opportunities have different impacts Ranches are heterogeneous Need enterprise budgets for each

23 Final Thoughts Ranchers have opportunities to adjust Opportunities have different impacts Ranches are heterogeneous Need enterprise budgets for each Early spring grazing most limiting grazing season and critical time for sage-grouse chicks

24 Final Thoughts Ranchers have opportunities to adjust Opportunities have different impacts Ranches are heterogeneous Need enterprise budgets for each Early spring grazing most limiting grazing season and critical time for sage-grouse chicks Models assume profit maximization Off-ranch income critical to maintain way-of-life

25 Final Thoughts Ranchers have opportunities to adjust Opportunities have different impacts Ranches are heterogeneous Need enterprise budgets for each Early spring grazing most limiting grazing season and critical time for sage-grouse chicks Models assume profit maximization Off-ranch income critical to maintain way-of-life Major economic impact from public land grazing reductions $ /AUM loss in ranch value This economic impact not recognized Economic and social impacts must be recognized (section 102 of NEPA) Photo courtesy of NRCS

26 Questions? Photo by Digital Wildlife Images Productions, may not be used elsewhere without permission