Osborn, James E.

Witkowski, Gerald V.

English

Research Papers in Economics

SOUTHERN  JOURNAL OF AGRICULTURAL  ECONOMICS  DECEMBER,  1974
ECONOMIC IMPACT OF BRUSH  ENCROACHMENT  IN TEXAS
James E.  Osborn and Gerald V. Witkowski
INTRODUCTION  portions  of Texas.  Climate  in the  area varies  widely.
Range  livestock  is important  to the  economy  of  Average  annual  precipitation  (east  to  west)  ranged
the  state of Texas.  Over  4.2 billion  lbs. of beef were  from approximately 37 inches to 12 inches  [13].
produced  in  Texas with a value of over  $1.2 billion in  Some  $1.7 billion worth of agricultural products
1971,  which  was the  greatest for any of the 50 states  were  sold  in  the  area  in  1971  [14].Cash  receipts
[17].  Sheep and  lamb  production in Texas  for  1971  from  farm  marketing  of  livestock  and  livestock
exceeded  200  million  lbs.  and was  valued  at  $43.4  products  accounted  for  $1.1  billion or 65.5  percent
million  which  was  the  highest  of all 50  states  [17].  of  all  farm  marketings  [17].  Significant  growth has
Cash  receipts  from  cattle,  calves,  sheep,  and  lambs  been  experienced in the feedlot cattle sector since the
marketed  in  Texas  in  1971  were  estimated  at  $1.6  early  1960's.  Over  3.2  million  head  of  cattle  were
billion  [17].  sold  from  area  feedlots  with  an  estimated  value  of
Texas' production of range livestock is limited by  $706.6  million  in  1971  [1,  9,  14].  Sales  of crops
the availability of rangeland. In 1967, over 53 percent  represented  approximately  34.5  percent  of the total
of the  land  area  in Texas  was classified  as rangeland  farm marketings.
[22,  p.  20].  Undesirable  woody  plants  which
compete  with  favorable  grasses  for  moisture  and  BENEFITS AND COSTS FOR BRUSH  CONTROL
sunlight  have infested  82 percent  of the grasslands in  Techniques  are  available  that  can  be  used  to
the  state  [11].  It has been estimated that less than 25  control  mesquite.  However,  the  responsiveness  in
percent  of  the  grasslands  have  as  much  as  half the  herbage  production  has  not  been  determined  to the
desirable  forage  plants that once existed and 30 to 35  extent  that  a  long-term  economically  feasible control
percent  have  less  than  one-fourth  of  the  original  program can be recommended.
plants remaining  [11].  A  recent  study of  some  ranches  in  West  Texas
One  of the  effects  of  the  restricted  number  of  indicated  that  the  decrease  in  acres  required  per
livestock marketed  in the state is a reduced income to  animal  unit  after  brush  removal  with four  common
ranchers.  In  a 28-county  Rolling Plains area, incomes  types  of  treatments  ranged  from  5.0  to  9.4  acres
of ranchers  were  estimated to have  been  reduced by  [12].  Data  were  based  on  files  in  the  Great  Plains
$26.2 million annually  [4, p.  136].  Restriction of the  Conservation  Program  that  was  administered  by the
number of range  livestock has  reduced the purchases  Soil  Conservation  Service  as  well  as  data  that  were
of inputs.  The decreased  demand for  range  livestock  collected from ranches.
inputs  has  resulted  in  reduced  incomes  for  the  Results  of an economic analysis of brush control
suppliers  of  these  inputs.  Brush  infestation  has  in  West  Texas  indicated  that  if the  treatment  cost
ultimately  affected  many  of  the  sectors  in  the  exceeded  $10  per acre  for  a high level of infestation
economy  of  Texas  as  various  sectors  have  reduced  (removing 50 to 75 percent of brush), it would not be
purchases  of inputs  after realizing  decreased demands  economically  feasible  without  assistance  from
for their products.  non-ranch sources  [4] .Generally, results of economic
Major  problems  of  mesquite  encroachment  are  studies  regarding  feasiblity  of  brush  control  have
evidenced  in  130  contiguous  counties  in  western  concluded  that  available  treatments  are  marginal.
James E. Osborn is professor and  Gerald V. Witkowski is research assistant  in agricultural economics at Texas Tech University.
95That  is, although the brush can be removed,  resulting  site  per  resource  area  were  determined  from  soil
in  increased  capacity,  net benefits in  terms  of profit  surveys  of sample  counties  in  seven  of the  resource
are low.  areas  for  determining  herbage  yields.  For the  other
Alternative  uses  of  rangeland  are  limited.  With  four  resource  areas,  range  site  composition  and
marginal investments  by the public sector, significant  productivity  of  rangeland  were  based  on  data
economic  impacts  may  be  realized.  However,  this  applicable  to  the  areas,  since  soil  surveys  were  not
project  should be evaluated  with other priorities  and  available.
associated  benefits  for  investment  by  the  public  Mesquite  infestation  data  for Texas  are available
sector.  by  acres  with  the  associated  levels  of canopy  cover
The  purpose  of this  study  was  to  estimate  the  which  is  classified  as low (0 to  10 percent), medium
economic  impact  of  mesquite  infestation  on  the  (10  to  20  percent),  and  high  (20  to  100 percent)
economy  of  the  state  of  Texas.  An  interindustry  [21].  Although  it  is  recognized  that  brush
model was  used to determine the economic  effects of  encroachment  on  rangeland  reduces  the  production
mesquite  encroachment  on  Texas  rangelands.  The  of  desirable  herbage,  a  functional  relationship
reduction  in  output  of the range  livestock sector was  between mesquite infestation and herbage production
used  to  estimate  the  economic  effects  on  other  has  not  been  scientifically  determined  for the study
sectors in the economy.  area.  A  study for  another  area  was  completed  such
HISTORICAL PERSPECTIVE OF INTERINDUSTRY  that herbage yields could be estimated for the canopy
^^~ANALYSIS  ~covers  [16].  It  was  estimated  that  herbage  yields aNALYSIS declined  by  12,  36,  and 86.5  percent,  respectively,
Interindustry  analysis  was  developed in the early  for  low,  medium,  and  high  canopy  covers  in  low
1930's by Wassily W. Leontief.  Leontief determined a  rainfall areas  [4].
national  model  of the United States  which estimated  It  was  assumed  that  30  percent  of  the
national  input  patterns  [5].  Models  of  regional  brush-infested  acres  was  required  for  wildlife  and
economies  in  the United States  have been  developed  browse  [10,  p.  20].  In addition,  it was assumed that
from  Leontief's  national  model.  However,  regional  50  percent  of the  annual herbage  production would
input  patterns  may  be  different  than  national  not  be  utilized  in  order  to  sustain  rangeland
patterns.  productivity  [3,  4,  p.  69].  Herbage  available  for
Interindustry  studies  for  nine  regions  as well  as  annual  utilization  was  expressed  in  'terms  of
for  the  state of Texas  were  completed in  1972  from  megacalories  of  digestible  energy.  Requirements  of
survey  information.  In  the  regional  study  for  the  megacalories  of  digestible  energy  for  annual
Texas  High  Plains,  Osborn  and  McCray  estimated  maintenance  of  a  CPU  as  recommended  by  the
direct,  indirect,  and  "stemming-from"  effects  from  National  Research Council  was used  [4,  6].  Herbage
irrigation for the Texas High Plains economy  [8].  available  for  annual  utilization  and  megacalories  of
digestible  energy  for  annual  maintenance  of  a  CPU
PROCEDURE  were used to estimate  the  number of CPU that could
Estimation of the total economic  effects of brush  be associated with the encroachment  of brush.
encroachment  on  the  economy  of  Texas  required  Total  output  was  estimated  for  1967,
several  steps  in  the  procedure.  Herbage  production  above-average,  average,  and  below-average  levels  of
that  was displaced  by mesquite  encroachment  on the  herbage  production. Estimated costs for the CPU that
rangeland  was  estimated.  Production of herbage  was  would  utilize  the  herbage  were  delineated  into  52
converted  to  costs  and  revenues  for  production  of  processing  economic  sectors.  It  was  assumed  that
beef from  cow-producing  units (CPU). Costs for CPU  production of calves from this herbage would be used
were  delineated  into  the  economic  sectors  in  the  to  decrease  imports  of feedlots into the  130-county
interindustry  model.  Total  economic  effects  on the  study  area.  That  is,  the  direct  requirement  for
economic  sectors  were  estimated  for  the  State  of  imports by feedlots  in the final payments section was
Texas with the interindustry relationships.  decreased.  In  addition,  direct  requirements  by
Herbage  yields  for  livestock  production  were  feedlots  from  range  livestock  in  the  study  area
estimated  for  above-average,  average,  and  increased.  The  Leontief  matrix  was  inverted  to
below-average  situations  for  each of the  11  resource  determine  final  demand  and  output  multipliers  for
areas  in  the  130-county  study area.  Herbage  yields  the four herbage situations.
were  available  for  above-average  and  below-average
amounts of rainfall by range  site in each resource area
[18,  19,  20,  21].  Estimates  of acreages in each range  Potential  rangeland  productivity  in  the
96W￿  2  /)  Primary Study
Area
Figure  1.  AREA WITH SIGNIFICANT  ENCROACHMENT  FROM MESQUITE
130-county  area  was  estimated  to  be  reduced  by  450 Ibs. each).
encroachment  of  mesquite  by  an  equivalent  of  Effects  of mesquite  infestation  on  total output
11,562,273  acres  of  non-infested  rangeland.  This  of the  Range  Livestock  Sector  (RLS) were estimated
acreage  of  rangeland  was  estimated  to  support  by using each of the threelevels of herbage production
1,374,528  CPU in  an average  year (Table  1). Annual  (Table  2).  In  a  year  when  an  average  herbage  yield
loss  of  marketable  calf production  was an estimated  was  available,  the  total  output  for  the  RLS  in  the
470.1  million Ibs. (approximately  1,045,000 calves at  130-county  area  was  estimated  to  be  reduced  by
97
Figure  1.  AREA  WITH SIGNIFICANT  ENCROACHMENT  FROM  MESQUITE~~~~~~~~~~~~~~~~~~~~~~~~~~A
130-county  area  was  estimated  to  be  reduced  by  450 lbs.  each).~~~~~~~~~AC
encroachment  of  mesquite  by  an  equivalent  ~of  fetMfmsqieifsainAnttlotu
encrachentof  esqute  y  a  eqivalnt  ofEffctsof  msqute  n etatin o  toa  otpuTable  I.  ESTIMATED  REDUCTIONS  IN COW-PRODUCING  UNITS  AS  WELL AS  MARKETABLE  POUNDS
OF CALVES  FROM ENCROACHMENT  OF MESQUITE  IN  130 COUNTIES,  TEXAS
Marketable  Pounds
Cow-producing  of  Calves
Herbage  Production  Units  (million  pounds)
Above  Average  1,793,321  613.3
Average  1,374,528  470.1
Below  Average  924,372  316.1
Table  2.  ESTIMATED TOTAL  OUTPUT  FOR THE RANGE  LIVESTOCK SECTOR, TEXAS
Total  Output
Herbage  Production  ($  Million)  Percent  of  1967
1967  799.9  100.0
Above  Average  986.9  123.4
Average  943.2  117.9
Below  Average  896.3  112.0
Table 3.  ECONOMIC ACTIVITY ASSOCIATED  WITH THE RANGE LIVESTOCK SECTOR,  TEXAS
Increases  in
Economic  Economic
Output  Activity  Activity
Herbage  Production  Multiplier  ($  billion)  ($  million)
1967  4.16  3.3
Above  Average  4.22  4.2  832.5
Average  4.21  4.0  638.0
Below  Average  4.20  3.8  429.3
S143.3  million.  Reduction  in  output  of  $143.3  The  output  multiplier  for  the  Range  Livestock
million  was approximately  1'/.9 percent  of the  1967  Sector  for  1967  was estimated  to be 4.16 (Table  3).'
total  output  of  the  RLS  for  the  state.  Similarly,  For each  dollar of production  by the Range  Livestock
mesquite  infestation  reduced total output of the RLS  Sector,  it  was  estimated  that  $3.16  of  additional
an  estimated  $187.0  million  and  $96.4  million,  economic  transactions  would  be generated  to  suppo;rt
respectively,  when  above  and  below-average  herbage  production  requirements.  For  above-averale
yields were evaluated.  production,  the  output  multiplier  was  4.22.  The'
This  is  an  output  multiplier.  It  is  the  sum  of  the  interindustry  coefficients  for  a  sector  divided  hy  its  iiltri;lt.ilcoi
interind ustry  coefficient  171.
98output  multiplier  for  above-average  herbage  Reduction in herbage by mesquite encroachment
production  situation  was  greater  than  the  1967  was  estimated  to  be  equivalent  to  from  924,000  to
situation,  since  it  was  assumed  that  increased  1.8  million CPU in a  130-county West Texas area. An
production  of feeder  calves  could be used to reduce  interindustry  analysis  was  made  to  estimate  total
imports by feedlots.  economic  effects.  Total  output  of  range  livestock
Total  economic  activity  generated  by  the  RLS  could  be  increased  from  an  estimated  12  to  23
was  calculated  by  multiplying  the  output multiplier  percent  without  the  incidence  of  mesquite.  In
by  its  corresponding  output.  Economic  activity  addition,  it  was  estimated  that  total  economic
generated  by the  RLS  in  1967  was  estimated to be  activity  in the state  was decreased from $429 million
$3.3  billion  (Table  3).  That  is,  for  the  state  Range  for below average herbage production to $832 million
Livestock Sector to produce $799.9 million of output  for above average herbage production when compared
in  1967,  $3.3  billion of output  was required from all  to economic  activity in  1967.
processing  sectors. Of the $3.3 billion, $799.9 million  Adjustments  are  being  made  throughout  the
was  direct  from  RLS  and  $2.5  billion  was  indirect  study  area  to  this  impact.  Private  investment  in
from  supporting  industries.  Economic  activity  industry  is being  delayed or discontinued throughout
increased  by  an  estimated  $638.0  million,  or  the  area.  The  result  is  a  regressive  attitude  in  the
approximately  19  percent  when  total  output  private sectors.
associated  with  average  herbage yields  was evaluated  In  the  public  sector,  decision  makers  have  a
with  its  output  multiplier.  Economic  activity  decreasing  base  on  which  to  establish  a  repayment
corresponding  to  above-  and  below-average  RLS  schedule  for  capital  improvements.  In  many
outputs  was  estimated  to  be  $832.5  million  and  situations,  declining  sources  for  tax  bases  provide
$429.3 million, respectively.  problems  for  local governments that have established
debt  retirement  schedules.  Refinancing  and/or  new
SUMMARY ~~SUMMARY  ~bond  issues  may  be  required  for  some  local
Range  livestock production in Texas is important  governments.
to the state's economy as well as to the United States.  Results  of this analysis  are limited by  numerous
A primary  source  of input in the production of range  factors.  Assumptions  that  are required  to conduct an
livestock  is  rangeland.  However,  encroachment  of  interindustry  analysis  may  establish  some  inflexible
mesquite  on  rangeland  has become  a  major  problem.  aspects  in  terms  of constant  prices  and  technology.
Productivity  of herbage  on  rangeland  has  decreased  Increases  in  beef  production  with  a  high  level  of
during  recent  years.  This  fact  has  increased  the  brush  control may  have an impact on prices  of beef.
requirement  of  supplemental  feeding  for  cattle  on  However,  changes  in  beef  prices  could  not  be
rangeland.  evaluated with the interindustry analysis.
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100

ECONOMIC IMPACT OF BRUSH ENCROACHMENT IN TEXAS

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