The National Academy of Sciences report also said the Bureau of Land Management has flawed estimates for the number of horses and burros on federal land and that the herd is likely growing by 15 to 20 percent a year.
The report recommended alternatives ranging from contraception to "self limitation" - leaving the animals be and letting nature thin the herd through crowding and competition for food.
The BLM, which commissioned the study, said in a prepared statement that it welcomed the findings, but wanted a chance to consider them in depth.
The statement warned that there are "no quick or easy fixes" to the problem of managing the herds, estimated at about 31,000 horses and 6,000 burros on 179 herd management areas spread over 10 states. Almost half of the herd areas are in Nevada; about half of the burros are in Arizona.
But others called for action in light of the report.
"BLM cannot continue to spend 70 percent of the program's budget on roundups and long-term corralling," said Rep. Raul Grijalva, D-Tucson, in a statement. "This report is a needed wake-up call that should lead to the corrective actions I've been requesting for years."
Under the bureau's "gathering" program, horses are rounded up and offered for adoption, but BLM typically finds homes for only a portion of the 8,000 animals gathered in a year. The rest are put out to pasture at government expense - about $40 million in one recent year, according to the report.
Arizona has seven herd management areas with an estimated population of 502 wild horses and 3,194 burros, according to BLM estimates. The study recommends that the numbers should be much lower, around 240 horses and 1,436 burros.
In a conference call Wednesday, authors of the report said that because of the bureau's failure to properly manage the wild horse and burro ranges, the population of those animals is growing at 15-20 percent per year.
The report also faults BLM for a lack of consistency in how wild horse and burros are being managed. It said the determinations of appropriate herd sizes, for instance, lack scientific support and standards of method.
"There's also concern about the health of the animals themselves, as well as the range land," said Guy Palmer, a Washington State University professor who chaired the commission that did the study.
The report contended that no matter how much land is allocated for wild horse and burro populations, they will continue to expand beyond those boundaries.
"Less than 10 percent of range land goes to wild horses; the rest goes to livestock," said Anne Novak, executive director of Protect Mustangs, a California non-profit.
The report said expanded use of contraceptives is one option to keep wild horse populations down, but the authors were concerned about possible costs and how effective contraceptives would be.
But Palmer noted that, given the population growth in the West, "the practice of putting the horses in a separate pen will not be effective without an increase in spending."
Opponents of the BLM "gathers" cheered the findings, but were cautious.
"Contraception can lower herd size and prevent the terrible practice of ‘warehousing' wild horses," said Grijalva's statement. "There's no reason not to start meaningful contraception efforts immediately."
Novak worries such a move would be counterproductive.
"Manmade sterilization and contraceptives would domesticate horses and wipe them out. Nature should take care of it," she said. "How is a human going to look at a group of horses and decides who lives?"
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