Paying above the final sale price will definitely create some perverse incentives.
What incentive would a rancher ever have for preventing the wolves from killing the steers? If the wolves don't kill a steer, well then there's the hassle of taking it to market and getting market price. If the wolves kill the steer, then they get market price plus 5%, and don't have to even find a buyer.
There is a serious danger in feeding wild animals and ranchers are smart enough to know it.