Potential Economic Impacts of the Managed Haying and Grazing Provision of the Conservation Reserve Program

Abstract

A survey of 480 Conservation Reserve Program (CRP) fields from across 14 states in the Great Plains region was completed to estimate the economic impacts from a policy change in the managed haying and grazing provision of the CRP. The study was designed to determine whether the new grazing and haying provisions of CRP would dramatically impact the price of beef and state economies. The study examined the economic feasibility of the haying and grazing activity, given the reduction in rental payments, estimated the amount of beef and hay likely to be produced annually in each state under several haying and grazing scenarios and estimated the impact of these expanded activities on beef production. The economic impact of the changes in production for hay and beef on states' economies was measured. The results were evaluated to decide if additional analysis was needed for local markets. The results suggest that the policy changes represented by the various haying and grazing scenarios result in a small change, both in terms of current production levels and economy wide impacts. This analysis adequately reflects the magnitude of the changes likely to occur in the output of hay and beef from each of the haying and grazing scenarios at the state level. Because the scenarios considered only a one in three to one in ten year haying or grazing management scheme for the CRP acres, the results of this study cannot be extended to a continuous haying and grazing activity.