One buck or two?Written by Jennifer Womack
Casper – “One buck or two?” is just one aspect of the discussion on potential changes to the mandatory national beef checkoff program.
Late January a Beef Board Executive Committee issued its recommendations for changes to the beef checkoff. The 13-page document includes both the suggestions that were considered and adopted and a discussion on some of those that weren’t.
Dianne Kirkbride of Cheyenne served as vice chair of the committee that reviewed the checkoff program at the request of the USDA. “We invited people to come talk to the Beef Board about what they see as necessary changes,” says Kirkbride, noting there was a fairly large response from the numerous entities with an interest in the checkoff’s future. “We went through every single comment that came in and we addressed it.”
Kirkbride says, “Most of us realize we’ve got to make some changes. The main change is the money. We’re at a point where we’re unable to do so many programs.” Of those projects that are being carried out, she says, “I think we’re not doing some of them as adequately as we’d like, but we just don’t have the money.”
Money is the first issue addressed in the document that recommends increasing the assessment from one dollar to two and the authority, following approval from the Secretary of Agriculture and a producer referendum, to incrementally increase the checkoff assessment to $3 per head. According to the CBB report, “the average carcass weight of fed cattle has increased from 647 pounds in 1986 to 771 pounds in 2007, a 19 percent increase.” The report adds, “Also, it takes $2 to purchase the same amount of goods and services in 2008 that cost $1 in 1986, and it takes $4 to purchase advertising in 2008 with the same frequency and reach as it did in 1986.”
“This means,” says the CBB report, “that the assessments we now collect are worth half as much as they were in 1986, yet we have 19 percent more beef per animal to promote. Put another way, we would need to collect $2.38 per animal today to have the same buying power we did in 1986.” The CBB report also points out that numerous challenges — BSE, increased competition from poultry and pork, anti-meat and activist groups and more — that either weren’t present or less prevalent in 1986 when the beef checkoff was first approved.
Also put forth as a means of “improving the checkoff,” is the opportunity for a referendum on the beef checkoff every seven years. A referendum would be held if at least 10 percent of the producers sign a petition at their local Farm Service Agency or Extension office, or more than 20 percent of the producers in any one state request a referendum.
“A periodic producer referendum is an already existing provision in the law,” says U.S. Cattlemen’s Association President Jon Wooster. “We are, however, pleased to see that the committee’s proposed increases in the per head assessment will be subject to a producer referendum.”
The report also recommends expanding the contracting authority within the Act to allow for “any national, non-profit, industry-governed organizations.”
With some state beef councils expressing a desire to combine with beef councils in neighboring states for added efficiency, the CBB report recommends changes to make that possible. “However,” says the report, “the recommendation would continue to require that there only be one qualified beef council for each state or region. Therefore, there could not be the possibility of two beef councils operating within the same state.”
In changes that don’t require modification to the Act and Order, the CBB says there’s some concern over the relationship between the Federation of State Beef Councils and NCBA’s Policy Division. The report puts forth the idea that this subject could be handled within the industry.
Despite a great deal of urging to limit beef checkoff dollars, or a portion of those dollars, to promoting only U.S. beef the CBB report doesn’t recommend taking this step. Stating that beef councils already have the authority to promote U.S branded beef the report says, “there are significant amounts of beef product, such as hamburger, which are not 100 percent ‘U.S. Beef.’”
“This is a particular disappointment,” says Danni Beer, USCA Director and COOL Committee Chair. “Cattle producers have achieved mandatory country of origin labeling, which will mark U.S. beef as a product of the United States. The 2006 Producer Attitude Survey showed an overwhelming number of producers in agreement that at least a portion of checkoff assessments should be used to promote U.S. born and raised beef. While we appreciate the committee’s work, producers can rest assured that USCA will be working with Congress and the Obama Administration to ensure that at least a portion of checkoff funds will be devoted to a marketing program that supports domestic beef.”
“The Producer Attitude Survey conducted in 2006 showed that more than three-quarters of the 8,002 respondents felt the per-head assessment of $1 should not be raised,” says Wooster. “USCA has made it clear that we will not support any increase in the per head assessment until meaningful reforms in the program are implemented, including allowing a portion of checkoff funds to be used to promote exclusively U.S. born and raised beef and a clearer separation is made between the mandatory checkoff and policy organizations.”
Kirkbride says the changes that require amendments to the Act and Order have been forwarded to the USDA. Given the recent change in administration, she’s unsure when the agency will take action on the checkoff. Changes to the Act and Order will require the action of Congress, a measure that will open the checkoff for additional debate.
“We have got to make some changes to be able to keep the program going and doing the things we as beef producers need it to do,” says Kirkbride. For those with questions she adds, “I’m certainly willing to visit with people.”