There are 610 million acres of public lands in the United States, a majority of which are located in the West. Many of our clients operate cattle ranches that also rely on public land leases for forage for their cattle.
These public leases are composed of either US Forest Service (USFS) lands, Bureau of Land Management (BLM) lands, or State lands. For 2019, the grazing fees for USFS and BLM lands are lowered. But first, a quick review on how these pubic lands are used in ranch management.
Mirr Ranch Group authored an article for the Rocky Mountain edition of The Land Report explaining public lands’ role in ranching. As an example we discussed the sale of the Sandy Ranch which we listed and sold. See excerpt below:
“A historic ranch in Utah right next to Capitol Reef National Park, the Sandy Ranch is a high desert outfit that runs about 1,000 head on 6,970 deeded acres. A cow-calf pair per every seven acres in the middle of the desert? This is where public lands takes a role. Sandy Ranch leases a total of 242,000 from the BLM and USFS, and suddenly the math makes more sense!”“Public Lands Primer,” The Land Report, 2018 Rocky Mountain Issue, Author: Ken Mirr
Public lands leases are beneficial to the operational income generated by a property. In order to realize these potential earnings, landowners need to be aware of the fees associated with grazing permits.
- These fees apply towards an AUM (Animal Unit Month) which is the use of public lands by one cow and her calf, one horse, or five sheep or goats for a month.
- The amount is based on current land lease rates, beef cattle prices, and the cost of livestock production
- The fee is applicable to 16 Western states including Colorado, Wyoming, Utah, Montana, and New Mexico.
The federal grazing fee for USFS and BLM lands is based upon a formula that was established by Congress in the Public Rangeland Improvement Act of 1978 and has remained in use under a 1986 Presidential Executive Order. It states:
- The lease fee cannot fall below $1.35 per AUM/HM
- Any adjustment cannot exceed 25 percent of the previous year’s fee
Starting in March of 2019, the grazing fee will reach the lowest possible rate at $1.35 per AUM.
- This new amount represents a 5% decrease from 2018 which was priced at $1.41 per AUM
- The federal grazing fee will be applied to almost 18,000 permits ran by the BLM and around 6,500 leases ran by the USFS.
If you want to learn more about what public lands leases do for cattle ranches, check out our blog; 6 Things to Know When Buying a Ranch with a Public Land Lease
Check out more about the fee change on the Bureau of Land Management’s website.