John Nalivka: The ranch production value of grazing – an example
August 10, 2016
As I stated in my previous article, the interdependence of all resources used by the ranch are integral to the overall performance of the operation, its productive capacity, and ultimately, it economic value and sustainability. Consequently, it is difficult if not impossible to begin separating any of the aspects of a successful grazing operation. The continued maintenance of this balance is necessary and the need for harmony is particularly evident in the forage resource with regard to season of use and forage quality. This harmony (sustainability) is jeopardized by drought, fire, and decisions concerning Federal land grazing, just to name a few. Any disruption in the total resource balance of a ranch, for whatever reason, will lead to the destabilization of the operation. If a disruption is long term or becomes permanent, and if management is unable to take compensatory action, then ultimately, the economic viability of the ranch is at risk. This is true for any ranch, of any size, located anywhere in the United States, but is critical in the Western U.S. where decision concerning Federal lands grazing are often out of the control of the rancher.
The following table presents an example from an analysis I completed in 1993. While the values have changed with the market and cost structure, the methodology would be the same. I have provided a scenario using today's projected values to show a comparison. Using the estimated value of $399 per Federal AUM shown in this example yields a total value of $67,912,593 on the 170,207 AUMs of Federal grazing that I referenced in a previous article that could be affected by designating the Owyhee Canyonlands in Owyhee County, Oregon a national monument.