Wolves and sacred cows
State tax credit for ranchers another unfunded mandate
Rep. Bob Jenson (R-Pendleton) thinks ranchers need a new state tax credit for cows lost to wolves and now all other predators, too.
The cost is estimated at more than the $100,000 already allocated to pay ranchers for losses. So it’s important to understand how serious the wolf and other predator damage really are.
In 2011, the livestock inventory in Oregon was about 2.29 million cattle and calves, beef cows, sheep, horses and mules. The top five counties in eastern Oregon, including Malheur, Morrow, Harney, Klamath and Lake counties, produced about 568,000 cows.
The total number of cows lost to wolves last year was 20. So if you do the math, you find the overall percentage of cows lost to wolves in eastern Oregon in 2011 was about 0.001 percent (1/1000 of 1 percent) of the state inventory.
It was recently reported in The Observer that cows rustled near Woodland, Wash. were valued at about $1,500 each.
Using this value, the total cost of cows lost to wolves in 2011 was about $30,000. The value of cows produced by ranchers in eastern Oregon was then about $852 million. So, 0.004 percent of total industry revenue was lost to cattle ranchers due to wolf predation last year, which looks pretty insignificant to me.
Assuming an eight-month grazing season in 2011, ranchers in eastern Oregon paid the BLM about $11.2 million in grazing fees to use roughly 8 million acres of public land, a return to the federal budget of about 70 cents per acre per year.
If the total value of cows produced was $852 million and feeding them on public land cost $11.2 million, the ranchers’ gain was 76 times more than they paid to feed them (a 7,600 percent profit).
It goes without saying ranchers rely on grazing allotments or leases in eastern Oregon to make a living.
It also goes without saying the land they use is the natural home to wolves, coyote, mountain lion, bobcat, eagles and many other predators. They make their living on the same public land used by the rancher.
Animal predation is a normal business risk ranchers take when they choose to graze their cows on public land. Mr. Jenson’s bill proposes a publically funded insurance program to cover risk of damages to the ranchers unattended livestock.
Mr. Jenson provides no means for funding his bill. So I offer the following method that does not place the burden on taxpayers.
Ranchers are the largest users of public land. I propose placing the financial burden and responsibility for predator loss directly on the rancher, who is the principle land user and economic beneficiary of grazing activity, not the public.
Grazing fees on public land were first set by Congress in 1966, 46 years ago.
In 1966, fees were set at $1.23/AMU. In the last 46 years, the cost for an AMU has risen to $1.35/AMU, about 10 percent. That’s 22 cents per year, a rate far less than inflation.
To replace the $100,000 the public now provides for wolf predation, grazing fees would have to increase 5.4 cents, to $1.44/AMU. A 5.4 cent/AMU increase would cost the ranchers in eastern Oregon $100,000 annually or 0.001 percent of the value of cows they feed on federal and state lands in Oregon. Additional costs would then be offset by more grazing fee increases.
Last week, I paid $5.49 a pound for hamburger at the supermarket. I remember in 1966, hamburger cost about 29 cents a pound. So hamburger prices have increased 1,793 percent (about 38 percent per year) while federal grazing fees have risen only 10 percent. Fees for every activity on public land have been either created and/or increased significantly in the last 46 years for the general public, so why not for the rancher?
For the price of one pound of hamburger at $5.49 a pound, a rancher can feed about four cows or 20 sheep for a month on public land. To me, as a public land user and retired business owner, it seems the rancher occupies a pretty enviable spot now, without any more tax breaks. So “Where’s the beef?”
Mr. Jenson proposes a new tax break at the same time he bemoans the hard work ahead to make cuts to solve our existing $100 million state budget shortfall.
I view Mr. Jenson’s bill as completely irresponsible. It’s a bad idea. It sets up yet another unnecessary, unfunded and costly tax break for the exclusive benefit of ranchers. That’s pure beef barrel politics at its best.
All in a time of unprecedented state budget deficits and tax revenue shortfalls in Oregon. Mr. Jenson and his bill are why I will vote the “no incumbent” ticket this fall.
David N. Whitson lives in La Grande.