Stocking Rate Decisions Are Not Related to What You Paid for Your Land or Pickup

Abstract

Acommon approach to mitigating the effects of high xed costs is to increase production activi- ties to “spread” those costs. This strategy is of- ten useful to businesses that are dependent on large amounts of machinery and facilities to add value to raw materials and whose actions to increase production do not limit the supply of those raw materials—that is, they are able to take advantage of slack capacity. However, it is often inappropriate when talking about businesses with a natural resource base of limited carrying capacity, such as grazing operations that depend on biological conversion of forage resources for their income. When animal numbers are so high that the marginal return doesn’t cover marginal costs, you can nd yourself in a hole that you have dug for yourself. And the rst law of holes is this: When you nd yourself in one, stop digging.

DOI: 10.2458/azu_rangelands_v35i5_frasier