The Bureau of Land Management and the Forest Service are cutting the federal grazing fee for western pasture lands more than 12% this year. The new fee, which takes effect March 1, falls to $1.56/AUM, down from $1.79 last year. BLM says rising production costs — especially higher fuel prices — overshadowed increases in cattle prices and private lease rates. The fee applies to more than 26,000 grazing permits and leases on public land administered by the two agencies.

At the state level, grazing fees on state-owned lands are headed up. After holding base rates unchanged last year, grazing leases with the Colorado State Land Board are increasing 5.5% in 2006, and again in 2007. This year's rates range from $6.65/AUM to $9.68/AUM. State officials cite rising private lease rates and strong beef market prices for the increase.

In neighboring Nebraska, grazing rates on state-owned land are also generally up — despite USDA's reported 2.2% average decline for leases on privately owned pasture. State leases for sandy soil pasture range from $18.50/AUM in Nebraska's southwest panhandle to $26.50/AUM in the north-central region. Hard, silt-clay pasture in the eastern third of Nebraska is priced at $22-$27.50/AUM.

Ron Vance, field supervisor with the Nebraska Board of Educational Lands and Funds, says the agency sets grazing rates based on surveys of local private leases.

Private leases on central Nebraska's Sand Hills are running $24-$30/AUM, reports Lex Madden, manager of Torrington Livestock Markets, Torrington, WY.

Though pasture lease rates will eventually trend higher as the cattle herd rebuilds, most experts agree it makes more sense for expansion-minded producers to rent pasture rather than buy.

“If you can find good land a reasonable distance to your overall operation, lease it,” counsels Richard Sullivan, an appraiser with Farm Credit of Missouri in Springfield.

“The consensus among producers is that land is priced too high for what a cattle herd would reasonably be expected to support,” says Matt Diersen, a South Dakota State University Extension economist in Brookings. “The cattle herd size is getting larger, which will lower returns from running cattle. You wouldn't want to set yourself up to pay record prices for land or pasture rent as the herd starts rebuilding.”

2006 cattle grazing rates for privately owned land
  Average monthly rate by payment method1
State/Region Animal unit2 One-year change (%) Cow-calf One-year change (%) Per head One-year change (%)
Arizona 8.00 0.0 N/A N/A 9.50 5.6
California 15.40 6.2 20.50 5.1 17.00 9.7
Colorado 14.50 7.4 16.00 6.7 14.30 2.1
Idaho 12.50 2.5 14.60 2.8 13.00 3.2
Kansas 13.50 3.8 16.50 0.0 14.00 3.7
Montana 16.20 1.9 18.70 7.5 17.30 6.8
Nebraska 22.50 -2.2 27.50 0.0 25.00 -0.8
Nevada 12.20 15.1 12.50 4.2 12.50 4.2
New Mexico 9.50 -2.1 11.50 -3.4 10.80 -1.8
North Dakota 13.70 5.4 16.00 12.7 14.50 7.4
Oklahoma 8.00 0.0 10.00 0.0 8.00 -5.9
Oregon 13.00 0.0 15.70 4.0 12.80 2.4
South Dakota 18.40 4.5 21.90 1.9 19.50 1.6
Texas 9.40 -6.0 9.00 -16.7 9.90 1.0
Utah 11.60 -1.7 13.60 -1.4 13.00 -0.8
Washington 9.70 -10.2 12.50 0.0 12.20 13.0
Wyoming 14.80 6.5 17.00 6.3 15.50 8.4
17 Western states average 13.20 0.8 15.20 -0.7 14.00 2.2
16 Western states (excluding Texas) 14.60 2.1 17.60 2.9 15.60 2.6
11 Western states3 13.70 3.0 16.20 4.5 14.60 5.8
9 High Plains states4 13.00 0.0 14.80 -2.0 13.80 1.5
1Average rates based on January Cattle Survey indications of monthly lease rates for private, non-irrigated grazing land. Rates over $10 are rounded to the nearest dime. 2Includes animal unit plus cow-calf rates. Cow-calf rate is converted to animal unit (AUM). 1 AUM = cow-calf rate(0.833). 3Eleven Western states are AZ, CA, CO, ID, MT, NV, NM, OR, UT, WA, WY. 4Nine High Plains states are CO, KS, NE, NM, ND, OK, SD, TX, WY. N/A indicates insufficient data. Source: USDA