Valuing Soil Health Benefits for WY Ranchers. Holly Dyer John Ritten John Tanaka David Taylor Kristie Maczko Jennifer Moore-Kucera

Transcription

1 Valuing Soil Health Benefits for WY Ranchers Holly Dyer John Ritten John Tanaka David Taylor Kristie Maczko Jennifer Moore-Kucera

2 Ranch A Ranch B VS. From the Journal of Integrated Pest Management. Bull Creek Ranch, Buffalo WY.

3 Research Objectives 1. Build economic model showing how practice responses benefit WY ranchers

4 Research Objectives 1. Build economic model showing how practice responses benefit WY ranchers Soil Structure Forage Quantity

5 Research Objectives 1. Build economic model showing how practice responses benefit WY ranchers 2. Establish rancher benefit trajectories over time

6 Research Objectives 1. Build economic model showing how practice responses benefit WY ranchers 2. Establish rancher benefit trajectories over time 3. Better understand policy s role to promote ecosystem services on private rangelands

7 4/1/2015 Calving 5/1/2015 1/15/2016 Winter feed 4/1/2016 Available grazing on State & BLM 5/1/ /31/2015 lands 5/1/2015 Available grazing on private leased and deeded range land 11/30/ /15/2015 4/30/2016 Available grazing on raised meadow 2015 Jan Mar May Jul Sep Nov 2016 Mar /15/2015 Weaning Ranch Calendar 10/31/2015 Livestock go to market and are sold

8 Ranch Characteristics Land Resources Owned Land Resources Leased or Purchased Units Number of Units Deeded Rangeland AUMs 1,076 Alfalfa Hayland (w/aftermath grazing) Acres -- Meadow Hayland (w/ aftermath grazing) Acres 793 State AUMs 538 BLM AUMs 3,756 USFS AUMs -- Privately Leased AUMs 500 Purchased Alfalfa Hay Tons 1000 Purchased Meadow Hay Tons 1000 Livestock Resources Brood Cows # Head 590 Replacement Heifer Yearlings # Head 100 Bulls # Head 38 Table 1. Representative central WY ranch characteristics.

9 Ranch Efficiency Measures Calf crop (calves born as % of Jan 1st cow inventory) 95% Min cow replacement rate 15% Max % heifer calves retained for sale as yearlings 80% Bull replacement rate 25% Cow-to-Bull Ratio 18:1 Calf death loss 4% Cow death loss 2% Bull death loss 1% Steer calf sale weight 440 lbs Heifer calf sale weight 390 lbs Heifer yearling sale weight 800 lbs Cull cow sale weight 950 lbs Cull bull sale weight 1800 lbs Table 2. Representative central WY ranch efficiency measures.

10 Quantifying Effects of Soil Health on Cattle Production in Central Wyoming Objective: Maximize Net Present Value of future stream of profits Subject To: Land availability Time Livestock price market Soil health conditions on privately-owned rangeland

11 Quantifying Effects of Soil Health on Cattle Production in Central Wyoming Objective: Maximize Net Present Value of future stream of profits Subject To: Land availability Time Livestock price market Soil health conditions on privately-owned rangeland Tool to do this: Multi-period Linear Programming Model (MLP) Characteristics: 35-year planning horizon Incorporate price variability Using parameters typical of central WY

12 Quantifying Effects of Soil Health on Cattle Production in Central Wyoming Objective: Maximize Net Present Value of future stream of profits Subject To: Land availability Time Livestock price market Soil health conditions on privately-owned rangeland Tool to do this: Multi-period Linear Programming Model (MLP) Characteristics: 35-year planning horizon Incorporate price variability Using parameters typical of central WY KEY: Transform forage production to mimic increased soil health over time

13 The Model Transfer From t-1 Forage and Crop Production Land Available Transfer From t-1 Livestock Raising Transfer From t-1 Livestock Marketing Crop Sales Transfer From t-1 Cash Sources Cash Uses Minimum Cash Reserve Table 3. MLP Model illustration adapted from Torell et al study.

14 Method for Modeling Forage Changes from Soil Health Variation Static Models: 1. Soil health conditions producing 25% of forage capacity 2. Soil health conditions producing 100% of forage capacity

15 Method for Modeling Forage Changes from Soil Health Variation Static Models: 1. Soil health conditions producing 25% of forage capacity 2. Soil health conditions producing 100% of forage capacity Dynamic Models: 3. Variable forage production based on linear soil health transformation 4. Variable forage production based on logistic growth soil health transformation 5. Logistic growth forage production from improved soil health conditions over 105 years (three 35-year horizons).

16 Static Models: Good vs. poor soil health conditions Healthy site Forage Production Value (per acre) Degraded soil health site Low Soil health over time High

17 Dynamic Models #3 and #4: Linear and Logistic Transformation Forage Production Value (per acre) Practice A Practice B Low Soil health over time High

18 Dynamic Models #5: Logistic Transformation over 105 Years Third 35-year interval Practice B Forage Production Value (per acre) Second 35-year interval First 35-year interval Low Soil health over time High

19 Results Main areas of interest in analyzing results: 1. Number of cows retained each year Trends between cows retained and increased forage production 2. Annual Profits Ice Slough (Fremont County, WY).

20 Results VS. Table 4. SH Profit Contributions Over 35 Years Minimum $ 303, Average $ 308, Maximum $ 316,820.17

21 Average Number of Brood Cows Retained Effects on Annual Cow Numbers Baseline Logistic SH Improvement Years Linear SH Improvement Full-Potential Forage Production

22 Number of Cows Retained 540 Annual Cow Numbers for Ranch Implementing Logistic Growth Soil Health Improvement Strategy Years

23 Net Present Value of Annual Revenues (in millions) 2.9 Effects on Total Profits over the Planning Horizon % 100% Linear Transformation from 25% to 100% Soil Health

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25 What do soil health practices on private rangelands mean for ecosystem services? Rocky Mountain Region rangeland.

26 Average NPV Maximum Profits (in Thousands) Differences between Static and Dynamic Models' Average NPV of Maximum Total Profits $250 $232.9 $200 $150 $100 $104.8 $50 $38.8 $36.7 $- Linear vs Baseline Logistic Growth (35 years) vs Baseline $1.4 LG First 35 years vs Baseline LG Middle 35 years vs Baseline LG Final 35 years vs Baseline

27 Limitations Only including rancher benefits as Gross Benefits Excludes aesthetic value and wildlife habitat Assuming there is no cost of implementing a practice Don t take into account impacts from increased forage quality NRCS programs are process-based rather than outcome-based

28 Limitations Only including rancher benefits as Gross Benefits Excludes aesthetic value and wildlife habitat Assuming there is no cost of implementing a practice Don t take into account impacts from increased forage quality NRCS programs are process-based rather than outcome-based Implications Private landowner benefits are dependent on.. Starting soil health conditions How practices impact soil health over time (functional form) Changes in soil health impact forage production over time Public ecosystem service benefits not included in model Conditions exist when NRCS compensation necessary

29 Thank you! Questions? Upper Green River Valley, WY.