Economic analysis of sheep grazing of leafy spurge: Preliminary results
Research Scientist, Research Specialist, Research Scientist, Professor, and Superintendent
1Department of Agricultural Economics, North Dakota State University, Fargo, North Dakota 58105
2Hettinger Research Experiment Center, Hettinger, North Dakota 58639
Leafy Spurge Symposium, Pg 19. Medora, North Dakota, June 29, 1999
Leafy spurge, a widely established exotic, noxious, perennial weed is a major threat to the viability of commercial grazing and to the beneficial outputs of wildlands in the Upper Great Plains. Treatments for leafy spurge are usually based on indicators of physical control, rather than economic criteria. A major benefit to land managers is the identification of economical control methods and an understanding of the economic factors influencing long-term treatment decisions.
The focus of this study was to evaluate grazing scenarios that would most likely be experienced by ranchers adopting sheep grazing as a control method for leafy spurge. The model starts with initial values describing the physical and economic characteristics of an infestation (e.g., infestation size, AUM value). The opportunity cost of no control is measured by estimating the loss of grazing from the initial infestation and the subsequent losses from expansion. The benefits of control include (1) recapturing grazing outputs from current infestations and (2) maintaining existing grazing outputs by preventing infestation expansion. The costs of control included either (1) material, labor, equipment, and lease expenses in the scenarios examining lease arrangements or (2) net returns from sheep enterprises. Net returns (revenues less expenses) from sheep enterprises could be positive or negative, depending upon profitability of the enterprise.
The model estimates the economic viability of using sheep to control leafy spurge by (1) comparing only treatment expenses with treatment returns (i.e., benefit-cost approach) and (2) comparing potential overall losses with sheep grazing versus losses without control (i.e., least-loss approach).
When a sheep enterprise produces positive net returns (enterprise revenues are greater than production costs), leafy spurge control will be economical. However, when a sheep enterprise has negative net returns (production costs exceed revenues), those costs (losses from the sheep enterprise) must be compared to the benefits of leafy spurge control. Likewise, costs of leasing sheep for leafy spurge control must be compared to the benefits of control.
To represent a reasonable range of production possibilities for a new sheep enterprise, eight enterprise scenarios were developed to consider different levels of enterprise performance, debt, and size. Initial budgeting analyses indicated that four out of the eight scenarios examined should/could produce positive enterprise net returns. The initial enterprise characteristics resulting in negative net returns included poor flock performance (e.g., low lambing percentage, light weaning weights) and enterprise debt (e.g., financing the purchase of breeding stock and equipment). Thus, analyses have focused on evaluating the feasibility of the scenarios with negative net returns.
With leafy spurge infestations of 50 to 250 acres, $15/AUM, 0.2 to 0.4 AUMs/acre carrying capacity, and a 15 percent leafy spurge canopy cover, preliminary results indicate that annual sheep enterprise losses down to ($2.30)/ewe would still result in control benefits exceeding control costs over a 10-year period. Adjusting for carrying capacity ranges of 0.4 to 0.6 and 0.6 to 0.8 AUMs/acre, annual enterprise losses down to ($3.85) and ($5.40)/ewe, respectively, would result in control benefits exceeding control costs.
Assuming the same initial conditions (50 to 250-acre infestations, $15/AUM, 0.2 to 0.4 AUMs/acre carrying capacity, and a 15 percent leafy spurge canopy cover), annual sheep enterprise losses down to ($4.70)/ewe would result in less economic loss than no control (i.e., doing nothing to control the infestation) over a 10-year period. Adjusting for carrying capacity ranges of 0.4 to 0.6 and 0.6 to 0.8 AUMs/acre, annual enterprise losses down to ($7.90) and ($11.00)/ewe, respectively, would result in less economic loss than no control.
Preliminary results indicate that using sheep to control leafy spurge can be economical in many situations found in the Upper Great Plains, even when net returns from sheep enterprises are negative. However, further refinement of the model is needed, as some model components are partially based on "best guesses" of range and weed scientists.
Perceptions of leafy spurge by ranch operators and local decision makers: An update
Randall S. Sell, Dean A. Bangsund, and F. Larry Leistritz
Research Scientist, Research Scientist, and Professor
Department of Agricultural Economics, North Dakota State University, Fargo, North Dakota 58105-5636
Leafy Spurge Symposium, Pg 5. Medora, North Dakota, June 29, 1999
This study focused on a four-county area in North Dakota (Bowman and Slope counties) and Montana (Fallon and Wibaux Counties) and represents an update to a similar study, using the same survey that was conducted in 1998. A total of 521 ranch operators and local decision makers (LDM) were surveyed, and 177 completed questionnaires were obtained (34%). The previous questionnaire was distributed to 515 ranchers and LDM in a five-county area in North Dakota (Billings and Golden Valley Counties), Montana (Carter County), South Dakota (Harding County), and Wyoming (Crook County). The survey focused on weed management in general and specifically on the perceptions and attitudes of ranchers and LDM, who may have been directly and indirectly affected by leafy spurge.
Leafy spurge was recognized as the most important weed problem for ranchers and LDM in the four-county area. However, ranchers and LDM in the 1999 survey were less likely to indicate that weeds in general were a major problem for them, or in their area, than respondents to the 1998 survey. The percentage of ranchers in the 1999 survey who indicated having leafy spurge on their ranch was less than the 1998 survey, 41 percent versus 56 percent, respectively. Ranchers in the updated survey area had leafy spurge on approximately 2 percent of operated acreage.
Reasons for not using herbicides included environmental restrictions, inadequate funding, and too large of infestations. Biological control was often not used because the biological agents take too long to work, there was limited access to biological agents, and respondents did not know how to properly use agents. The main reason that ranchers and LDM were not using sheep or goat grazing as a control mechanism was that they lacked the equipment or expertise to include them in their grazing strategies. Other methods such as tillage, planting competing grasses, burning, and mowing were not used because land is not suitable for these methods.
Overall, a vast majority of the respondents were concerned about controlling weeds on rangeland and understood leafy spurge is a long-term management problem. The LDM were more likely than the ranchers to believe that the weed problem in their area was a major problem and that leafy spurge was the most important weed.
The results of this survey indicate that financial constraints on weed control are prevalent. Also, the amount of knowledge needed to adopt various treatment programs appears to be a constraint for both ranchers and LDM. Education and awareness on how to use and where to find biological controls could facilitate more adoption of biological agents to control leafy spurge. Likewise, assistance in obtaining equipment and knowledge of sheep/goat management might enable some managers to use sheep and/or goats to curb further leafy spurge expansion.
The TEAM Leafy Spurge project could enhance adoption of all leafy spurge control methods by addressing concerns exhibited by each of the groups surveyed. By facilitating cooperative efforts between managers of adjoining lands and by pooling resources, perhaps many of the hardships created by leafy spurge can be reversed.