Report

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.

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.

• Visits to Lake Mead and Lake Powell have decreased as lake levels have fallen. Changes in access to key recreation sites at both lakes are associated with changes in visitation – as launch ramps, marinas, and navigational access points are closed, visitation tends to decrease.
• Visitation to Lake Powell appears more sensitive to lake levels than for Lake Mead, perhaps because Lake Mead is close to the Las Vegas metropolitan area, where local visitors may be less deterred by changes in lake levels. 
• Declining lake levels are estimated to result in negative regional economic impacts ranging from $3 million to $16 million at Lake Mead and $23 million to nearly $30 million at Lake Powell, under various lake level scenarios. These impacts occur as a result of changes in visitation and total visitor spending.
• The losses in economic benefits to recreationists range from a low estimate of $4.5 million at Lake Mead to a very high estimate of $83.6 million at Lake Powell.  
• Policies and programs to keep the lakes at levels that avoid cutbacks, such as the DCP, can provide additional economic benefits to recreationists and to recreation-dependent local economies.

Consumer surplus measures the economic value of the benefit or “well-being” that recreationists get from visiting a site. For goods and services that are not bought or sold, in this case access to outdoor recreation opportunities at Lakes Mead and Powell, economic value is estimated as the difference between what someone would be willing to pay to visit the lakes and what they actually pay. Benefits are often measured in terms of the dollar value of economic benefit recreationists derive per trip. When people take fewer trips due to low lake levels, they get fewer benefits. This study estimates the changes in consumer surplus as a result of fewer recreation visits when lake levels fall. Based on a range of previous per-visit estimates, changes in the value of recreationist benefits range from -$4.5 million for lake levels dropping from 2018 levels to DCP Tier 1 at Lake Mead to -$83.6 million for lake levels dropping from 2018 levels to minimum power pool level at Lake Powell.

Table 1. Estimated change in user benefits with reductions in lake levels at Lake Mead & Lake Powell (millions)

The regional economic impacts of declining lake levels at Lakes Mead and Powell are estimated using a three-step process (Figure 1). First, the effects of lake levels on visitation are estimated. Second, changes to visitation and total visitor spending are estimated using various lake level scenarios. Scenarios are based on lake levels identified by the Drought Contingency Plan (DCP). Finally, impacts to the regional economy are estimated using economic impact multipliers from the National Park Service.

Changes in user benefits also rely on estimated changes in visitation under DCP-based lake level scenarios. Benefit transfer is then used to estimate changes in user benefits, combining visitation estimates from this study with a range of existing water-based recreation use value estimates. Use values used in this study reflect low, middle, high, and very high estimates of economic value per trip for water-based recreation.

Foreign exports contribute to demand for Arizona-grown agricultural products, including primary agricultural production, agricultural input supplies, and food and fiber products. The main products exported by Arizona agriculture and agribusiness include crops such as grains (mainly Durum wheat), vegetables and melons (mainly lettuce, cauliflower, spinach, and celery), tree nuts (pistachios and pecans), fruit (dates), cotton, and alfalfa. Livestock exports, which are minor, are primarily comprised of beef cattle. Agricultural inputs like pesticides, fertilizers, and farm machinery are also exported, as well as processed food including dairy products, meat, and all other food products. The study estimates the direct contribution of exports in these industries to the state economy. In addition, it estimates economic activity supported through multiplier effects in industries outside of agriculture and agribusiness.

Since March 2025, Arizona agriculture is facing the prospect of new taxes on imported inputs (tariffs), along with retaliatory tariffs – new taxes on goods exported from Arizona to other countries. At the time of writing, the level and extent of these new taxes confronting Arizona businesses remains uncertain. The economic modeling approach used in this study is not designed to estimate the myriad impacts of tariffs on Arizona’s agricultural economy. However, it does identify agricultural sectors that depend more heavily on export revenues and those most sensitive to increases in input costs. This provides a baseline of data to inform future trade policy analysis.

Including multiplier effects, Arizona exports of agricultural commodities and food and fiber products contributed $1.85 billion in output (sales) to the state economy in 2022.

The direct contribution of agricultural exports includes $571.4 million in sales by primary agriculture, $111.6 million by agricultural input suppliers, and $509.8 million by food and fiber processing industries. In addition, these exports directly and indirectly supported:

• 7,475 jobs and $373.2 million in labor income (business owner income plus employee compensation);
• $679 million in state GDP (value added); and
• $167 million in tax revenues.

Combined, China, Canada, and Mexico accounted for 62% of Arizona’s agricultural exports.

• The entire Rest of Asia accounts for 28% of export sales, followed by Europe (9%), Mexico (4%), and the Rest of the World (2%).
• Certain commodities have particularly specialized destinations. For instance, 100% of vegetables and melon (primarily lettuce) exports are destined for Canada and Mexico. Alfalfa is predominantly exported to China and Saudi Arabia, with 97% of total exports going to these two countries.
• While Mexico is not a major export destination for Arizona agriculture, agricultural imports from Mexico through Nogales contribute significantly to Arizona’s economy, approaching a billion dollar industry in 2020.
  What did the study find?

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Agricultural industries in the state vary widely in their dependence on exports for sales revenues.

• Exports account for 88% of Arizona cotton sales, 39% of fruit sales, 24% of other crops and hay sales, and 9% of vegetable and melon sales.
• Overall, exports account for 8% of Arizona agricultural sales, including primary agriculture (on-farm crop and livestock production), agricultural input suppliers, and food and fiber manufacturers.
• 48% of Arizona’s agricultural exports come from primary agriculture, 43% from food and fiber manufacturing, and 9% from input suppliers.
• Because Arizona cotton production is the most export-dependent, this sector would be relatively more vulnerable to retaliatory tariffs or foreign import restrictions.

Estimated Foreign Exports of Agricultural Products by Arizona (Value), 2022 USD

While it is beyond the scope of this analysis to measure how proposed tariffs might affect agricultural business owner income, we can measure how increases in non-labor input costs from tariffs (holding prices and other factors constant) would reduce business owner income.

• A 5% increase in non-labor input costs would lower business owner income by 16% for primary agriculture, 63% for farm input suppliers, and 69% for food and fiber manufacturers.
• An 8% increase would erase all business owner income for agricultural input suppliers and food and fiber manufacturers and reduce farm income by 25%.
• These negative income effects would be reduced if farmers and food and fiber manufacturers pass higher costs on to consumers through price increases, and if farm input suppliers raise the prices they charge farmers. While raising prices for Arizona food and agricultural commodities would reduce the negative business income effects of input cost increases, this would also contribute to food price inflation.

This study uses the IMPLAN input-output model to estimate the economic contribution of agricultural exports from Arizona. Modifications were made to IMPLAN’s industry production functions for primary agriculture industries in Arizona, as national averages do not accurately reflect local production practices and spending patterns. Value of state-level agricultural exports were estimated using data from the USDA Economic Research Service and USA Trade Online from the U.S. Department of Commerce to most accurately reflect export of Arizona-produced agricultural products, excluding commodities consolidated in Arizona but originating from other states and exported through Arizona.

• Through visitor spending in local economies, Arizona's state parks contributed an estimated $449 million in sales to the state’s economy, $272 million to Arizona's Gross State Product (the state equivalent of Gross Domestic Product), and supported an estimated 4,200 jobs statewide.
• Since the 2014 economic impact study, total expenditures by non-local visitors to Arizona State Parks are estimated to have increased by over 20%. While non-local expenditures per visit actually decreased between 2014 and 2020 (by 6%), visits to Arizona State Parks grew by nearly 30%, leading to higher overall spending in the state.
• At the county-level, the study considered the economic impacts of non-local visitors to state parks making expenditures in and around the parks (results next page). The largest county-level economic impact was in Mohave County with roughly $83 million in sales, including multiplier effects, and an estimated 945 jobs. State parks are located in 13 of Arizona’s 15 counties, excluding Greenlee and Maricopa Counties.

Statewide Economic Contribution, Including Multiplier Effects—All Visitor Spending

County Economic Impacts, Including Multiplier Effects—Non-Local Visitor Spending

The COVID-19 pandemic led to a decrease in Arizona State Park visits in calendar year 2020 compared with visits in calendar year 2019, with overall visits down by 7.6%. Excluding historic state parks and Kartchner Caverns which were closed temporarily for safety precautions, however, visits to all other parks were in fact 1% higher than in 2019. Visits to historic state parks and Kartchner Caverns were 50% lower than in 2019.

This study relies on a survey of visitors to Arizona State Parks between July 2019 and September 2020 which col- lected information on visitor spending and origin. Average visitor spending patterns were developed for each park to estimate both non-local and total visitor spending occurring in and with- in 50 miles of each state park. Visitors are considered local when they reside within the same county as the park or if they reside in zip codes that fall within a 50-mile radius of the park. Total spending for each park is esti- mated using annual state park visita- tion statistics and average visitor spending patterns, accounting for the fact that not all visitors report spend- ing in every category. Regional and state economic multiplier effects were estimated using the IMPLAN 3.1 model and data.

Over the last two decades the western US has been in an historic drought. As a result, policymakers have been grappling with how to allocate limited or declining water supplies. Water experts expect agricultural producers to shoulder large reductions in water use because agriculture is typically the largest water user in most regions. Water experts expect agriculture, typically the largest water user, to shoulder large reductions in order to adapt to water shortages. In Arizona, where 96% of harvested cropland is irrigated and agriculture accounts for about 75% of the state's water use, crop producers are particularly vulnerable to water cutbacks. 

For communities where agricultural water supply reductions are imminent and/or agriculture plays an important role in the regional economy, the potential economic impacts of water cutbacks to irrigated agriculture are a serious concern not only for agricultural industries, but to the wider community. T

This study presents results from two previous case studies (Bickel et al., 2019, 2020) that estimate the potential regional economic impacts of agricultural water supply cuts to two crop producing regions in Arizona: (1) Pinal County and (2) Graham and Greenlee counties. These two regions represent areas of the state with relatively high probabilities of surface water shortages which could trigger cutbacks to agriculture. Assuming that producers would respond to cutbacks by fallowing land, or taking it out of production, the studies estimated reductions in acreage, farm gate sales, farmer income, as well as the resulting economic multiplier effects from farmers purchasing fewer inputs from local businesses and employing fewer farm workers.

Since these case studies, conditions on the Colorado River have worsened and the Drought Contingency Plan (DCP) has hastened and increased the anticipated water supply reductions taking place in Pinal County.

• Fallowing irrigated crop acreage in response to water cutbacks would affect farmers and regional economies in Arizona, albeit in different ways. 
• Agricultural producers would face decreased sales as well as decreased production costs because they are no longer purchasing inputs needed for growing and harvesting. Therefore, direct effects to agricultural producers would be lower net revenues, profit, or income for their individual operations.
• Reduced spending on inputs and labor would also affect the broader county economies, resulting in decreased in income in non-agricultural sectors. This would happen as a result of agricultural producers purchasing fewer inputs and farmers and agricultural workers earning and spending less income on consumer goods and services in the regional economy..
• In Pinal County, a hypothetical irrigation supply cutback of 300,000 acre-feet would lead farmers to reduce county cotton acreage by 75%, resulting in a $80.7 million gross revenue reduction for farmers and 448 fewer jobs county-wide.
• In Graham County, a 20% irrigation supply reduction would lead to 23% of county cotton acreage being fallowed, a $5.3 million gross revenue reduction for farmers, and 23 fewer jobs county-wide.
• In Greenlee County, a 20% irrigation supply reduction would lead to 18% of county alfalfa acreage being fallowed, a $323,000 gross revenue reduction for farmers, and 1 fewer job county-wide.

The first case study focuses on Pinal County in central Arizona. Pinal County is a leading agricultural producer in the state, with important agricultural goods including cotton, milk, cattle, alfalfa, and other livestock feed and forage. With average annual precipitation in Pinal County ranging from only 8 to 10 inches per year, the availability of irrigation water is of utmost importance to crop production. Broadly, water supplies for Pinal County agriculture come from groundwater, surface water from the Colorado River transported by the Central Arizona Project (CAP), surface water supplies from the Gila River, and reclaimed water. CAP water has become an important source of water for irrigated agriculture in parts of Pinal County, but many agricultural users in the county have low priority water entitlements. As such, Pinal County agricultural producers are some of the first and most affected by surface water cutbacks triggered by declining Colorado River supplies. The study modeled a hypothetical reduction in irrigation water supplies of 300,000 acre-feet (AF). At the time of the study, this was roughly the anticipated cutback under a Colorado River Basin Tier 1 shortage. The Arizona Drought Contingency Plan (DCP), however, hastened and increased the volume of these water cutbacks with Arizona’s CAP losing an additional 192,000 AF under a Tier 0 Colorado River Shortage per the Lower Basin Drought Contingency Plan (now occurring if Lake Mead elevation falls below 1,090 feet). The total Tier 1 Colorado River Shortage reduction, declared August 2021, is then 512,000 AF for 2022, prior to any mitigation commitments.

The second set of case studies focuses on Graham and Greenlee Counties in southeastern Arizona. Top agricultural goods produced are cotton (in Graham County) and cattle and calves (in Greenlee County). Irrigated agriculture in both counties relies, in part, on waters from the Gila River fed by the Upper Gila Watershed. The Upper Gila Watershed has experienced chronic drought conditions and is expected to face both higher temperatures and lower precipitation under the effects of climate change, resulting in decreased surface water supplies. The study modeled a hypothetical reduction in irrigation water supplies of 20% for both counties.