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Rangeland in Eastern Oregon
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The Department of State Lands (DSL) manages approximately 638,000 acres of rangeland located primarily in central and eastern Oregon.
Much of this land is arid or semi-arid and contains vegetation consisting of grasses, grass-like plants, forbs and shrubs suitable for grazing. Therefore, nearly all of the rangeland managed by DSL is leased to ranchers.
DSL currently has 44 leases involving large blocks of rangeland. It also has leases on approximately 100 smaller "isolated" parcels. Together, these leases have a carrying capacity of about 62,000 animal unit months (AUMs).
DSL manages this rangeland under administrative rules (OAR 141-110-0000 through 141-110-0180) adopted by the Land Board in 1994 and amended in 1995. Staff in DSL's Bend office is responsible for administering this rangeland as well as working with the lessee to improve the condition of this asset.
The five major blocks of rangeland in eastern Oregon on which most of the larger leaseholds are situated were formed in 1982 through a major trade of state-owned parcels with parcels belonging to the United States Bureau of Land Management.
They are located:
- near Jordan Valley
- north of Burns Junction (Stockade Block)
- in the vicinity of Wagontire
- in the vicinity of Hampton
- north of Lake Abert
This was done to form units of rangeland that could be much more efficiently managed by both agencies than many smaller, widely scattered parcels.
Forage Lease Rate Calculation
DSL utilizes a crop share approach to determine the compensation due for grazing rangeland.
The AUM rental rate charged by DSL is derived by the formula "G" x "CC" x "S" x "P" where:
"G" = animal gain per month which is fixed at 30 pounds.
"CC" = marketable calf crop which is fixed at 80%.
"S" = state share which is fixed at 20%.
"P" = is the average weighted calf price based on the USDA Oregon agricultural price data indicating the average statewide sales price of calves for the preceding one year period based on an October through September year.
Since adoption of the administrative rules governing the leasing of state-owned rangeland, DSL's AUM fee has been:
1995 $3.33
1996 $3.43
1997 $2.62
1998 $3.21
1999 $3.72
2000 $3.64
2001 $4.36
2002 $4.52
2003 $4.16
2004 $4.32
2005 $5.03
2006 $5.60
2007 $5.80
DSL manages its rangeland parcels through the use of rangeland management plans. These plans are developed by Department staff in consultation with the lessee and other interested parties such as the Oregon Department of Agriculture, Oregon Natural Desert Association, and the Oregon Department of Fish & Wildlife for each non-isolated rangeland parcel. They contain, among other things, grazing schedules by pasture, specific management objectives for the leasehold, and describe lessee flexibility during annual plan operation. Once drafted, the plan is circulated widely for public comment.
Final Report of the Director's 2004-2006 Grazing Fee Advisory Committee
Background
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The Department manages about 634,000 acres of rangeland in Southeastern Oregon primarily in Lake, Harney and Malheur Counties. The lands are considered to be assets of the Common School Fund, a fund established at statehood to provide financial support for Oregon’s public K-12 schools. The State Land Board (Board), consisting of the Governor, the Secretary of State and the State Treasurer, are the trustees of the Fund and direct the policies of the Department. Much of the land is leased for grazing. There are 143 lessees, each operating under contract with the Department and annually paying fees based upon the carrying capacity of the leasehold and a formula adopted by the Board and implemented by DSL. The last fee formula change was in 1995; the fee itself is adjusted annually in accordance with the provisions of the formula.
In 2004 the Secretary of State’s Audits Division released an audit of DSL’s rangeland management program. The scope of the audit was to determine if DSL was maximizing long-term income generated from rangeland assets. The report did not explore rangeland characteristics that limit potential revenue or the required costs of administration. The Audits Division found that the grazing fee had not been periodically reviewed as required by the Board’s rules; was not maximizing revenue; and recommended that the fee be increased to approximate lease rates reported by the USDA National Agriculture Statistics Service (NASS) for private non-irrigated grazing lands.
The Committee and its Task
The Director of DSL determined that the fee formula was in need of review. An advisory committee was appointed by the Director and consisted of the following members who represented a variety of interests, such as DSL, lessees, a rangeland economist, a rangeland scientist, a local government official, public interests and a school beneficiary:
- John Tanaka, Oregon State University, Cove, range economist
- Larry Larson, Oregon State University, La Grande, range ecologist
- Tom Clemens, Bend, citizen
- Martine Andre, Arock, lessee
- Joe Flynn, Plush, lessee
- Dan Nichols, Harney County Commissioner, Diamond
- George Grier, citizen, Springfield
- Diana Oberbarnscheidt, Bend, representing school beneficiaries
- John Lilly, Assistant Director, Department of State Lands
- John Lilly also served as Chair of this Committee, which was called the "Grazing Fee Advisory Committee", and facilitated much of its discussions.
The Director sought recommendations from the advisory committee regarding the existing grazing fee formula. The Director plans to review the recommendations and report any change in them to the Land Board along with DSL’s recommendations for action. No new formula or fee for forage use of rangelands is to be imposed until the Land Board has approved a change in its administrative rules (OAR 141-110).
The Grazing Fee Advisory Committee (Committee) was specifically asked to:
- Review the Secretary of State’s audit report findings as to the grazing fee;
- Analyze whether the current rate reflects at least a fair market value rental rate; and
- Make recommendations to the Director concerning the fee formula.
The Committee held six, day-long meetings between September 2004 and May 2005. Each meeting allowed for public comment. In addition, the Committee dedicated the afternoon of one meeting (Burns-January 2005) to public testimony. During the course of the Committee’s work, it heard from a variety of individuals including current lessees; DSL staff; Charles Hibner of the Secretary of State’s audit staff; Bruce Eklund of the U.S. Department of Agriculture’s National Agricultural Statistics Service (Oregon State office); and Bend-La Pine School District board member Nathan Hovkamp.
The Committee compiled, reviewed and discussed numerous reports, studies and information from other states and Oregon applicable to the Committee’s "charge".
The Committee reached consensus on the following recommendations:
- Recommendation 1. The Committee recommends that the current fee formula remain in place and that DSL collect supplemental data about the leases sufficient to evaluate the formula factors prior to the next scheduled review that shall be no later than 2008. However, recommendations 4 and 5 address minimum fees.
- Recommendation 2. The Committee recommends that DSL compile private land lease data (including data about services provided and their costs) for the SE Oregon counties for grazing lease lands comparable to DSL leaseholds. Comparable properties will be those of similar size, productivity, forage quality, improvements, access etc. Adjustments may be needed to make sites/rates comparable.
- Recommendation 3. The Committee recommends that if DSL is to meet its Trust mandate in the management of rangelands, then it must explore and implement, where feasible, other alternatives for revenue production including but not limited to:
- Charging for public outdoor recreation opportunities including but not limited to, guided hunting or controlled hunts; and
- Leasing for alternative energy exploration/production.
- Recommendation 4. The Committee recommends that DSL amend the grazing fee formula rule to limit the annual AUM fee to no less than $4.25 per AUM.
- Recommendation 5. The Committee recommends that DSL amend the rangeland management rules to set the minimum grazing fee at the amount necessary to recover the Department’s cost of lease administration of those small leases.
- Recommendation 6. The Committee recommends that the current Range Manager position be established as a permanent position in the DSL budget and that there be added to the budget such seasonal positions as are necessary to continue the range inventory and improvements work. (Note: The 2005 Legislature authorized the Range Manager as a permanent position.)
- Recommendation 7. The Committee recommends that a new committee be formed for the next review (2008) of the fee formula with representation from the public, lessees and beneficiaries. The composition of the Committee should be such that there is equal and balanced representation from among the interests. In addition, the services of a third party facilitator, with an understanding of grazing permit/lease issues, are recommended in order to allow DSL to more freely participate in discussions.
Next Action
The Director is expected to present her recommendations for action on the Advisory Committee's report to the Land Board at its June 13 meeting in Salem. A copy of the Director's report will be available prior to the June 13 meeting.
Report
TOC and Main Report (935k) 
Appendix A (9.2 mb)
Appendix B (4 mb)
Appendix C part 1 (4 mb)
Appendix C part 2 (4.5 mb)
Appendix D part 1(6.85 mb)
Appendix D part 2(6.5 mb)
Appendix E (1.3 mb)
Appendix F (1 mb)
Draft Reports (2.4 mb)
Press Clippings (774k)
Public Comments (222k)
June 13 Land Board Agenda Item on Grazing Fee (120k)
.: Additional Information
 Rangeland Audit
For additional information about DSL´s rangeland program, contact the agency´s Bend office.
State-owned land near Juntura
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