antlerradar
Well-known member
I didn't say exactly that I could make more on a private lease. I said I could pay 16 dollars per AUM more and still make more money on our private. However if I was to lease a similar parcel of land from a private individual I would likely have to pay more than 16 dollars per AUM. As for why people lease public, Simple economic principle of marginal revenue greater than marginal cost. If the marginal revenue is greater than the marginal cost some one will lease it. In years when hay prices are high the cost of our forest lease is greater than the revenue, even at a 1.35 for us. When cattle prices are high or hay prices are low we do better with the forest lease. However selling the cow herd when hay is high and buy back when cattle are high would be very risky so you accept that you are going to make a loss some years. If the price of the forest lease were to increase much I would be looking to sell it to some fool.If people make more money on private leases, then why do they lease from the Government at all? Is it because these better value private leases aren't available?
I used to work for Plumcreek, who were the biggest private landowners in the US. Plumcreek had lots of leases for range cattle in NW Montana. Plumcreek always wanted to get out of the leases, as the cattle were doing more damage than the leases were worth, to fences, creeks etc. I wonder if it's the same for the government?
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