Allocation Scare Resources

Economics is the science that deals with the efficient allocation of scarce resources among competing uses. In the context of rangelands, 1) what are some scarce resources and 2) what are some potential competing uses?

  • Scarce resources = Natural (rangeland, water, mineral rights); Human (labor and management); Other (fence, trucks, finances).
    • Competing Uses = Wildlife competing with cattle for forage; grazing competing with urban sprawl; windmill projects competing with brush control or fence projects.

How are private and public rangeland managers 1) different and 2) similar? In what ways can they both benefit from the use of economic analysis?

  • Private = Maximize income over time. Public = Sustain yield of forage over time.
    • Both groups need to achieve efficient allocation of scarce resources among competing uses.
    • To evaluate trade-offs and alternative project investments due to limited financial resources.
    • Both groups need the tools of economic analysis to achieve efficient allocation of scarce resources between competing uses.
    • Lack of sufficient resources to implement all improvement projects means selecting among all possible alternatives can be difficult.
    • What usually begins as a biological problem ends up being an economic decision.

How does the economic principal of “comparative advantage” help explain why rangelands are used for grazing?

  • A particular product will be produced in a given area because the resources available in that area make it advantageous for production of the product there than in any other area.
  • The law of comparative advantage explains why numerous other areas can out-produce the rangeland in almost any other commodity, but rangelands are at LESS of a comparative economic disadvantage with livestock than with other products. They are grazed because there is no productive alternative.

You were recently hired as a Ranch Manager by an absentee ranch owner. Currently, rangeland management on the ranch relies on solely on income generated from beef cattle production. However, the owner’s main reason for hiring you because of your diverse knowledge of multiple use rangelands. Besides cattle production, the owner has tasked you with diversifying the ranches income streams from sustainable rangeland use. The owner has suggested the following enterprises:

  • Hay production
  • Stocker livestock enterprise
  • Seed stock cattle enterprise
  • Sheep/goat production
  • Wildlife hunting/fishing
  • Photography/camping & recreation

Given the business’ scarce resources as well you and your employees time constraints, you can’t implement all of the alternatives. Pick two (2) enterprises that you would add to the ranch. 

A. Describe how you would integrate them into the ranch system along with the cow herd.

B. What are the pros/strengths and cons/weaknesses involved in each?

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