- Research Hub
Idaho, Oregon, and Wyoming are examples of western states where many ranches are dependent on federal grazing. The Public Lands Council’s federal grazing permit database indicates that there are 1,381 federal grazing permits in Idaho representing 1.8 million AUMs of grazing (Idaho Cattlemen’s Association, 2021). For Oregon there are 2,026 federal grazing permits representing 1.4 million AUMs of grazing (Oregon Cattlemen’s Association, 2021). For Wyoming there are 1,982 federal grazing permits representing 2.4 million AUMs of grazing (Wyoming Stock Growers Association, 2021). The combined total for the three states is 5,389 federal grazing permits representing 5.6 million AUMs of grazing. This represents 28 percent of the total authorized federal AUMs of grazing. During certain seasons of the year, this grazing is the primary source of forage for many area ranches. In recent years, the use of federal lands for livestock grazing has become increasingly controversial with some organizations calling for the complete removal of all livestock grazing from public lands (Western Watersheds Project, 2021). The objective of this analysis is to estimate the economic impact of removal of federal grazing by cattle on the combined three-state economy in terms of direct and secondary economic activity, labor earnings, and employment.
A two-step analysis was used to estimate the economic impact of removing federal grazing in the three states. In the first step, the economic impact at the ranch level was estimated using a set of profit maximizing recursive linear programming models for cattle ranches in the study area that use federal grazing. Individual ranch models were developed for each of the primary Major Land Resource Areas (MLRA) located in the region to estimate profit maximization over a 40-year time-period. The ranch models estimated the change in gross livestock sales and hay sales when federal grazing is removed. In the second step of the analysis, the aggregated change in livestock and hay sales from the ranch level models was then entered into a 2019 IMPLAN model for the three-state area to estimate the economic impact of removing federal grazing on the overall economy of the region.
Ninety-seven of the 104 counties in the three-state area (Idaho, Oregon, and Wyoming) had some federal grazing. This represents 93 percent of all counties in the study area. Although federal grazing AUMs are present in most counties, the majority are located in more rural areas of the states such as Owyhee County in Idaho, Malheur, Harney, and Lake Counties in Oregon, and western counties in Wyoming. The top 10 counties in the three states account for 77 percent of the total federal AUMs in the area. The three-state IMPLAN model estimated that the $186.2 million reduction in direct economic impact would result in secondary economic impact (indirect and induced) reductions of $374.3 million (-43 percent) for a reduction in total economic impact of $560.5 million (-37 percent) annually. In addition, the IMPLAN model estimated that total employment would decrease by more than 4,000 jobs (- 41 percent) and that labor income would decrease by $205.4 million (-50 percent).
While federal grazing is economically important to the ranching sector, it is also economically important to other sectors in the neighboring communities such as feed stores, veterinarians, and bulk fuel dealers. It also illustrates the importance of considering secondary impacts when evaluating the economic importance of an industry. The results indicate that a $1.00 of decrease in direct sales from a reduction in federal grazing causes a $3.01 decrease in total economic activity throughout the study area including a $2.01 decrease in secondary impacts. Additionally, the results show that labor income decreased (-50 percent) by more than employment (-41 percent) which indicates that not only were there less jobs without federal grazing but that the remaining jobs were lower paying. The annual loss of more than 4,000 jobs from removal of federal grazing is significant, particularly to rural parts of the three states where most of this grazing occurs. Agriculture is relatively more economically important in these areas and opportunities for alternative employment are more limited. Results presented herein represent a lower bound in terms of the economic impact of a loss of federal cattle grazing. Since ranchers rank quality of life factors above profit maximization, the assumption of continued operation seems reasonable. However, some ranches may not be able to remain in production long term if their operations are not economically viable without federal grazing. A survey of ranchers holding federal grazing permits in Wyoming found that approximately 60 percent of small cow-calf ranchers (average herd size = 134 cows) felt that their operation would remain viable if their federal grazing permits were lost (Lind, 2015). On the other hand, only approximately 20 percent of large cow-calf ranchers (average herd size = 836 cows) felt that their operation would remain viable without federal grazing permits. If some ranches do not stay in operation, the negative economic impacts could be substantially higher. How much higher would depend on how many ranches go out of business and what happens to the private lands associated with these ranches. This conversion could potentially involve up to 6.0 million acres of private land in Wyoming alone. Predicting when individual ranchers might cease operation, foreseeing alternative land uses, and estimating net economic impacts of these potential alternative land uses are difficult questions beyond the scope of this analysis, but such impacts would likely be significant, especially in rural communities predominantly dependent on ranching and related enterprises.