In 2012, the bureau’s fees for grazing were 93 percent cheaper than the average market rate in 16 Western states ($1.35 versus $20.10 per AUM, which is a fancy acronym for the amount of land needed to support a cow and her calf for a month1).
The bureau’s fees are so much lower than the market price in part because its fees are set at a flat, national rate and can’t be adjusted to match demand in local markets. Plus, the bureau sets that national grazing price using a formula, rather than any kind of bidding system or market appraisals, as some other federal agencies with higher prices2 do. As a result, in 2014, grazing fees covered only 15 percent of the bureau’s costs to maintain grazing lands. The rest of the cost is made up in federal appropriations and covered by taxpayers.