This report updates the 2018 study “Effects of Depredation and Mexican Gray Wolf Presence on Ranch Returns: Case Study of a Representative Ranch in Arizona” (Bickel et al., 2018). In that study, a representative ranch model was used to simulate the effects of wolf presence on short-term ranch returns for a representative Arizona ranch under a range of scenarios (wolf depredation of cattle, cattle weight loss, additional management costs, etc.). Additionally, it presented an analysis of long-term effects on ranch profitability that could be capitalized into ranch values. Since that study was conducted, conditions have evolved, including the minimum Mexican gray wolf population in the wild, prevailing cattle prices, agricultural input prices, and existing compensation programs. This new study incorporates updated market prices, considers compensation schemes currently available to producers, and combines input from the original survey of affected Arizona ranchers from the 2018 study with responses from a newly-conducted rancher survey.
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Findings
Impacts of wolves on Arizona ranching operations
- While generally at a county or state level, the impacts of wolves are not detectable, a small number of individual cattle ranching operations are heavily impacted by wolf depredation year after year. This finding is consistent with other studies that have found that a small number of producers are heavily impacted while most others experience small impacts or no impacts.
- Nine (9) of 24 Arizona survey respondents report direct impacts of wolf presence through depredation of cattle. 5 respondents reported indirect weight loss impacts only, and 9 reported not experiencing any wolf impacts.
- Wolf depredation of calves reduces ranch revenues by decreasing the number of calves available to sell. The loss of a cow, however, has a multi-year impact equal to the loss of two calves that would have been born had it not been depredated.
- Ranchers report that in addition to direct depredation, wolf-related stress reduces weight gain in calves, leading to lower sale weights, an effect that can occur across the herd.
- Compared to a baseline of no wolf presence, a combination of wolf depredation and wolf-related weight loss can reduce representative ranch revenues by 7% under combined 2% calf depredation and 2% calf weight loss, to a 46% reduction under combined 14% depredation and 10% weight loss. Previous survey responses suggest that, of those affected by wolves, average wolf effects are 2% calf depredation and 3.5% weight loss (Bickel et al., 2018).
- When ranchers incur additional management costs to deter wolf presence, that further reduces ranch returns. For example, combining 2% depredation, 2% weight loss, and average preventative expenditures per cow reduces representative ranch revenues by 19%.
Arizona rancher attitudes towards Mexican wolves and compensation programs
- Arizona ranchers responding to the survey generally agree that the health of their ranching operation is tied to the health of the ecosystem, though views are mixed regarding whether predators are part of a healthy ecosystem.
- Arizona respondents overwhelmingly agree that too much responsibility for ensuring populations of threatened and endangered species is borne by ranchers, and respondents are strongly in opposition to maintaining a healthy wild population of Mexican wolves.
- Arizona ranchers responding to the survey strongly agree that Mexican wolf depredation is a more serious problem than depredation by other large predators, and that Mexican wolf presence is a threat to the ranching way of life.
- Respondents held mixed views regarding whether the economic impacts they have experienced from Mexican wolves are tolerable, and whether they would be more accepting of Mexican wolf presence if compensation covered its full direct and indirect costs.
- Responding Arizona ranchers generally disagree that compensation is adequate to cover the full costs of depredation-related losses (including direct and indirect effects). Respondents generally agree that compensation programs place too much burden of proof on ranchers and that compensation is not timely.
- There were mixed responses regarding whether compensation encourages cooperation between ranchers and wildlife conservation, whether compensation is worth the effort, and whether compensation procedures and requirements are too complex.
Compensation programs
- In cases where depredation is confirmed, current Arizona compensation policies are generally sufficient to cover the direct revenue loss of depredated calves and cows.
- However, if rancher time spent filing for compensation is included in the losses due to depredation, the current Arizona compensation scheme may undercompensate the loss of time, particularly in the case of a depredated cow.
- Generally, the current Arizona compensation scheme is not sufficient to cover the combined effects of multiple depredations, calf weight loss, as well as lost time filing for compensation.
- These results are contingent on depredations being confirmed. If a true wolf depredation is not confirmed due to decay of the carcass, a missing carcass, or other obstacles, that depredation goes fully uncompensated.
Longer-term effects on ranch property values
- The sales value of a working ranch depends on a combination of the production value of ranch operations and other aesthetic or location-specific features of the ranch itself that affect its value as a residential property. Wolf depredations may be expected to be capitalized into the production value portion of the ranch property value.
- Compared to a baseline of no wolf depredation and no stress-related weight loss, the net present value of the production value of the ranch is modeled to decline by $191,000 over 30 years in the “average” 2% calf depredation, and 3.5% calf weight loss scenario. This decline may be expected to factor in the sales price (and 30-year mortgage) of a ranch.
County-level impacts
- For Arizona counties in the Blue Range Wolf Recovery Area (BRWRA), ranching represents a small proportion of the county economy (as measured by Gross Domestic Product - GDP). Moreover, for most agricultural operations, ranching and farming are not a major source of household income. For this reason, severe depredation impacts on individual ranches may not show up in aggregate, county-level statistics.
- Statistical analysis comparing cattle and calf inventories between counties with greater wolf presence and those with low or no presence found no statistically significant reduction in inventories in high-presence counties compared to low-or-no-presence counties.
- Similar analysis of livestock sales found that sales in Catron County, New Mexico did have statistically significant, lower sales than low-to-no presence counties. This negative effect was not found for Arizona counties.
How the study was done
The analysis uses a representative ranch herd planning model to examine the financial impact of different wolf effect scenarios on a representative cow-calf ranching operation in Eastern Arizona. We examine the effects of both a single calf depredation and a single cow depredation on herd dynamics, along with the impacts on short-run annual cash returns under different levels of wolf depredation and stress-induced weight loss across the herd. Finally, we conduct a long-term analysis of returns over total cost across 30 years, including a projection of future costs and returns. Long-term returns over total costs represent a measure of the ranch’s revenue-generating potential as it would be capitalized into ranch property values. We also present the results of a rancher survey, reporting on Arizona rancher attitudes towards wolf presence and compensation programs. Finally, we conduct an analysis of county livestock performance to test for any regional-level effects of wolf presence on the cattle ranching industry.