The market really has determined what the price will be. There is probably no other use for that land other than grazing. If the ranchers can't use it, no one else will pay the government for use of the land and the government loses out on that money. It isn't subsidizing the ranchers, it is the fact that the government is getting something for which there would be no other use. The public benefits from lower beef prices.
I would appear that, at least to me, that the land being referred to is the government rangeland, not private land. However, I believe that you will still find that the ability to graze private land would be the same as the prevailing AU rate charged by BLM. The market for cattle is fixed by demand for the product and not the cost to raise it. Paying higher prices for grazing would negate the profitability to the rancher.