Volume 40, No.2, Winter 2021

Securing a Future for Wolves in the West

Addressing the financial liability, creating an economic asset

This special edition of PERC Reports uses the hit television show “Yellowstone’s” portrayals of the Rocky Mountain West to examine real-world western issues. Explore the full issue here

“That’s $1,800 I can’t stand to lose,” rancher Randy Paulson tells Steve Hendon, a livestock agent for the Montana Livestock Association, during Season 2 of “Yellowstone” (Episode 4). Hendon is at the Paulson ranch to investigate a dead cow supposedly killed by wolves. Once Hendon confirms the loss was in fact a wolf kill, he asks Paulson whether he’s called the state wildlife agency. 

“They ain’t coming,” Paulson responds, explaining that his neighbor, Jerry Hayes, has a history of hacking up his own cattle and blaming wolves in an attempt to tap into a state program that compensates ranchers for cattle lost to wolf depredation. Hayes’ history of “crying wolf” has poisoned the perception of wildlife authorities, who now hardly believe wolves are even present in the area.

Hendon assures Paulson that he’ll be compensated, then leaves to visit Hayes. Upon Hendon’s arrival, Hayes shows him a mangled cattle carcass, what he calls a wolf kill. Agent Hendon is skeptical, and a gory weed trimmer found nearby reveals Hayes’ attempt at fraud. When Hendon moves to arrest Hayes, the man’s teenage son pulls a shotgun on the agent. After the boy refuses to drop the weapon, Hendon shoots and kills him.

Rancher Randy Paulson (left) shows livestock agent Steven Hendon (center) a cow killed by wolves, as Kayce Dutton (right) looks on. ©Paramount Network

The tense scene illustrates the messy realities of livestock compensation programs, which have been adopted in several western states as wolves have recovered over recent decades. In the Greater Yellowstone Ecosystem in particular, compensation programs have reduced political opposition to wolf recovery under the Endangered Species Act by shifting the financial cost of wolf damages from ranchers to the public.

When wildlife agencies compensate ranchers for livestock lost to depredation, they help address the financial liability associated with wolves. Compensation programs do not, however, create any incentive for landowners to support wolf recovery—in other words, wolves are still not an economic asset for ranchers and other property owners. For that to occur, ranchers would not only have to be made whole when they suffer depredations, they would also have to be rewarded for the mere presence of wolves. 

Under a payment-for-wolf-presence scheme, increases in wolf populations would translate into larger and more widespread cash payments to livestock producers. Combined with depredation compensation payments, such a dual strategy could reduce the risk of wolf presence and create a benefit from their continued recovery, thereby shifting wolves into the category of economic asset and securing their future as a part of western ecosystems. 

Wolves Return

Like elk, deer, pronghorn, and bison, gray wolves were nearly hunted to extinction in the United States to make room for European settlers and their livestock. While the large ungulates would eventually find a constituency among sportsmen who would advocate for their recovery and conservation, wolves were slow to find any champions. The canids’ potential to kill cows, sheep, and the big-game animals preferred by hunters kept wolves in the crosshairs, and their deaths were viewed as an economic and ecological good. Even Aldo Leopold, the father of the American land ethic, admitted that for a time he believed killing wolves and conservation were synonymous.

Leopold would eventually admit he was mistaken, and in 1978 the country would too. That year the multi-century effort to exterminate wolves in the lower 48 states came to an end when the country’s remaining gray wolves, then largely confined to small portions of the upper Midwest, were listed under the Endangered Species Act. 

Protection under the act brought restrictions on the killing of wolves. It also meant that efforts began to place wolves on the road to recovery, pulling them back from the edge of extinction by restoring populations where ecologically and politically feasible.

Compensation programs do not create any incentive for landowners to support wolf recovery. For that to occur, ranchers would not only have to be made whole when they suffer depredations, they would also have to be rewarded for the mere presence of wolves.

It would take nearly another decade before active efforts to recover wolves in western states gained traction. In 1987, the U.S. Fish and Wildlife Service, in partnership with the National Park Service and state wildlife agencies, published a Northern Rocky Mountain Wolf Recovery Plan, which laid the groundwork for reintroducing the species to Yellowstone National Park.

As part of the environmental impact statement for the plan, the federal government held 61 open houses, 22 public hearings, and more than 30 presentations, and it collected more than 160,000 public comments on the idea of Yellowstone wolf reintroduction. One thing was clear from all of this input: Ranchers who lived near the park’s boundaries in Wyoming, Montana, and Idaho worried the wolves’ return would harm their livelihoods through depredation of sheep and cows. Some even sued the federal government to keep the reintroduction from moving forward.

Rancher concerns were not unfounded. Livestock losses to wolves had the potential to cost a rancher thousands of dollars each year. Moreover, this estimate accounted only for cattle that could no longer be sold for slaughter. It did not include costs that are more difficult to measure, such as stressed and underweight calves and the emotional toll placed on ranchers.

Out of these concerns, and in an effort to reduce the political opposition to wolf reintroduction and recovery inspired by them, the first programs to compensate livestock producers for animals killed by wolves were initiated.

Paying to Prey

Compensating livestock producers for financial losses stemming from the presence of an endangered species was a fledgling practice in 1995 when the holding pens were opened and 14 wolves were released in Yellowstone.

Almost since the passage of the Endangered Species Act in 1973, property rights advocates had argued that implementing the law could result in a “taking” of private property under the 5th Amendment. As such, they believed that the federal government should compensate private citizens in such cases. Nevertheless, these claims had largely failed to gain traction in the courts.

It was not the federal government, however, that stepped in first to compensate Yellowstone-area ranchers for lost livestock—it was conservation organizations. Defenders of Wildlife established the first wolf compensation program, which reimbursed livestock producers 100 percent of the fair market value of a certified loss to wolves, up to $3,000. Funded entirely by private donations, the organization paid out more than half a million dollars to livestock producers in the Greater Yellowstone area to compensate them for the loss of approximately 1,500 animals between 1995 and 2009. The program’s focus then shifted to implementing conflict-avoidance tactics like range riding and fladry, and the compensation payments ended.

The end of the Defenders of Wildlife compensation program did not, regrettably, signal an end to wolves killing livestock. By 2009, wolves had begun to disperse farther from the park, with their numbers in the Greater Yellowstone Ecosystem having grown to several hundred, creating the potential for more livestock losses.

Wolves inside Yellowstone National Park feed on a carcass. ©Yellowstone National Park

That year Congress authorized the Wolf Livestock Demonstration Project and appropriated $1 million to the Fish and Wildlife Service to make grants to wolf-range states to compensate ranchers for stock lost to wolves. This federal program boosted state-administered programs in Wyoming, Montana, and Idaho that arose in the wake of Defenders’ reorientation.

Wyoming had begun to compensate livestock producers for losses from bears and mountain lions as far back as 2003, and it added wolves to the mix. Wyoming is unique in two ways. First, compensation is limited to lost calves and sheep, with losses requiring verification by agents of the Department of Game and Fish. Second, compensation is awarded at 3.5 times the market value of the lost animals, a multiplier intended to account for missing animals that may have been lost to carnivores but whose remains were never found. Following the delisting of wolves as endangered species in 2012, claimants must also allow wolf hunting on their land to be eligible for compensation.

Idaho’s compensation program pays for losses of any type of livestock but only if they exceed $1,000 in value. (USDA Wildlife Services verifies losses.) Claimants are paid the first half of their claims immediately, and the second half is withheld until the state knows it has received enough funding from the federal Wolf Livestock Demonstration Project to cover its obligations.

In Montana, a Livestock Loss Compensation Fund is financed by state appropriations and covers not only cattle and sheep, but also horses, llamas, swine, mules, and livestock guard animals, like dogs. To be eligible for compensation, ranchers must be current on their per capita fees, a state assessment on all livestock. (They must also have wolf kills confirmed by USDA Wildlife Services.)

In total, these private, federal, and state programs have paid ranchers in Wyoming, Montana, and Idaho more than $6.5 million since 1995 to cover the costs of livestock lost to wolves. This has been a sufficient investment to dampen political opposition to reintroduction, discourage illegal wolf killings, and pave the way for the Yellowstone wolf’s delisting under the Endangered Species Act. For wolf recovery to be resilient, however, new tools will need to be employed that make wolves an economic asset to livestock producers while simultaneously limiting the economic liability they create.

Paying for Presence

The millions of dollars in compensation payments made to livestock producers over the past quarter century have not resulted in a vocal or appreciable increase in support for a larger wolf population among rural residents of Greater Yellowstone. This is illustrated by everything from liberal wolf hunting seasons and low tag prices in states like Wyoming to recent legislation in Idaho that could set the stage for harvesting up to90 percent of that state’s wolves. Across the region, the intent seems to be to keep wolf populations depressed at a level just above the Endangered Species Act recovery target of 10 breeding pairs, a number scientists believe is just large enough to keep wolves from going extinct but too small to play their historical role in the ecosystem.

Indeed, the experience around Yellowstone corresponds with research from Wisconsin that indicates that compensation payments, while welcomed, do not improve wolves’ popularity among rural residents. These findings came into stark relief last year when more than one-third of the wolves in Wisconsin were killed by hunters—nearly double the offtake authorized by the state wildlife agency.

One possible way to increase support among rural residents for larger wolf populations is by offering rural landowners, not livestock producers exclusively, cash payments in exchange for wolf presence.

It may be possible to increase support among rural residents for larger wolf populations by continuing to mitigate the economic liabilities wolves create for livestock producers while also exploring the potential for wolves to become an economic asset. One possible way is by offering rural landowners, not livestock producers exclusively, cash payments in exchange for wolf presence.

The Mexican Wolf/Livestock Coexistence Council is currently piloting such a program. The public-private partnership makes cash payments to landowners in Arizona and New Mexico based on a number of factors, including whether a landowner’s grazing area overlaps with known Mexican gray wolf territory, the number of wolf pups in the area that survive the year, the number of livestock exposed to wolves, and the extent to which the applicant has implemented voluntary measures to avoid wolf-livestock conflicts.

Programs such as this one create more of an incentive for livestock producers and other landowners to tolerate and even desire higher wolf numbers than compensation payments alone. While the program is novel, and its ultimate success remains an outstanding question, its potential to support ongoing wolf conservation in the Southwest might inform similar approaches in the Greater Yellowstone Ecosystem.

Pay-for-presence programs are ripe for public-private partnerships that allow them to achieve necessary scales. While private capital can play a role, one possible way to harness public funding that has been suggested is via a “conservation fee” assessed at Yellowstone and Grand Teton National Parks. Researchers have estimated that such a fee could generate up to $13 million annually. If such a program was put in place, a portion of the funds collected could be dedicated to a payment-for-wolf-presence scheme.

Paying for Persistence

Compensating livestock producers for animals killed by wolves has been a key tool in the recovery of the species in the Greater Yellowstone Ecosystem. The model recognizes the financial liabilities created by the presence of the species and shifts the economic burden from ranchers to the general public. In the process, it has softened resistance to wolf reintroduction and decreased the likelihood of illegal wolf killings.

Simply addressing the costs associated with wolves, however, is not enough to deliver support for larger, more resilient populations of wolves that are capable of playing the species’ historical role in the ecosystem. Ensuring a persistent wolf recovery likely requires turning wolves into an economic asset for livestock producers. Pay-for-presence programs represent a novel approach worth exploring and evaluating further to secure the future of Yellowstone wolves—and to avoid the types of scenes depicted in “Yellowstone.”

Explore the Full Issue

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