Grazing Lease Program
Arizona Revised Statutes § 37-285.B. states that the ‘annual rental rate for grazing land shall be the amount determined by multiplying the number of animal unit months to be grazed on the land by the true value rental rate per animal unit month as established by the Commissioner.” The rental rate per animal unit month is the rental rate determined by the Commissioner based on the recommendations of the Grazing Land Valuation Commission...”
About the Grazing Land Valuation Commission
The Grazing Land Valuation Commission was initially created in 1994 to determine the true rental value for the state land grazing fee.
The Commission was composed of five members: a professional appraiser, a University of Arizona College of Agriculture professor, a retired employee of an agricultural lending financial institution, a livestock grazer who does not hold a state lease, and a conservationist who represents a Natural Resource Conservation District.
How Grazing Fees Were Originally Determined
The appraisal was prepared using both the market and income approaches. In using the market approach, the Commission determined the typical lease of two years or more of private grazing land during normal years. The Commission also compared all factors that make up the bundle of rights and obligations in the typical State lease.
The factors affecting the determination of grazing fees included the following:
1. All services, equipment and water rights provided by the lessor or lessee.
2. All improvements typically constructed and maintained to facilitate or enhance the use of the land for livestock grazing, wildlife, hunting or recreation.
3. All management and protection services provided by lessor or lessee.
4. The tenure, right to renew, assignability, right to reimbursement for improvements, responsibility for property taxes, right of others to share in the use of the land and ability to control access by others.
5. The size, location, accessibility, condition and carrying capacity of the land being leased and all related costs.
Resulting Grazing Fees Established Since 1996
The Commission recommended that the Land Commissioner set the grazing fee at $2.18 per animal unit month for the 1996-97 grazing year and that this fee be adjusted upward or downward annually, beginning in the 1997-98 grazing year. The annual adjustment was to be based on a factor that is the difference between the “new” five year average beef price index (1997-1993) and the “old” five year average beef price index (1996-1992).
The Land Commissioner did accept the recommendation of the initial Grazing Land Valuation Commission and established the 1996 true value of forage on State Trust land at $2.18 per animal unit month. No subsequent Commissions were appointed.
Grazing fees since 1996 are as follows: