My View From The Country

Future Of The National Beef Checkoff Remains In Doubt

What's ahead for the national beef checkoff? A draft report from the Beef Checkoff Enhancement Working Group suggests revising the system so more contractors can be involved and increasing the producer contribution to $2.

Several years ago, it appeared that the national beef checkoff would be destroyed, thanks to a cadre of people who set their sights on turning the program into a pawn in a political chess match. However, overwhelming support among producers, the program’s success, and calmer heads prevailed; the checkoff seemed to be once again moving forward, working on building beef demand and avoiding becoming a political football. 

As an outgrowth of this near calamity, however, the industry formed what was called the Beef Checkoff Enhancement Working Group. This group consisted of representatives from all of the major players; it was a three-year process geared to creating an industry-wide consensus on recommendations for overhauling the nation’s beef checkoff program.

This group recently produced a draft memorandum of understanding. The consensus is to revise the system, making it easier for organizations to become contractors. It also would raise the checkoff from $1 to $2, if passed in a producer vote, with the additional $1 being refundable to contributors who request it. There were also a number of other suggestions to improve the efficiency and effectiveness of the program.

Considering the wide array of membership in the group, it’s not surprising that no member was totally satisfied with the result or comfortable with the degree of change proposed. But that’s what consensus and compromise ultimately means – no organization is totally satisfied with the result. These members now will go back to their memberships to present the result and seek approval; that won’t be an easy task.

After all, several of these organizations were adamantly opposed to the checkoff in principle; not surprisingly, groups like the National Farmers Union have already come out strongly against the consensus document and called for USDA to act on its own. An obvious question, of course, is whether USDA even has the authority to act on the checkoff, as the act was passed by Congress.

In essence, the working group was created to satisfy a request of Congress, which made it clear that any changes to the checkoff would be very difficult to accomplish without broad industry consensus. But it isn’t just the few anti-checkoff groups that have expressed concern about the document. The program’s most ardent supporters still believe that the biggest problem with the checkoff is the limitations USDA places on the program. And when one reads what USDA disallows – even claims backed by good science, it’s obvious that the dollars are not being used in a way that is conducive to effective marketing. 

A recent study showed an $11.20 return on every $1 invested in the checkoff. And despite beef prices continuing to increase, consumers haven’t curtailed purchases. Nevertheless, the national checkoff program does have flaws, but it appears that the most likely action will be to take no action at all.

We’re currently seeing a trend where individual states will actually collect the badly needed extra dollars and then control and oversee the spending of those dollars. This system utilizes the tremendous infrastructure that was created via the formation of the National Cattlemen’s Beef Association, where the checkoff side would become a more efficient entity to carry out the goals of the checkoff. 

 

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The opponents of the checkoff believe the current Washington administration is its best bet to act unilaterally. They realize that producers generally overwhelmingly support the checkoff, and it’s unlikely they’ll see another administration so politically aligned with them.

The recommendations undoubtedly address some of the problems and would improve the funding and efficiency of the checkoff. But when any national program is controlled by the government, it will inevitably continue to be controlled by politics, as well as by people who have anything but the best interests of the industry at heart. 

With broad-based producer support of the checkoff, it may be a case where the best-case scenario – to the dismay of all those who wish to improve the checkoff – is to do nothing at all. Individual states increasing their own checkoff assessments and then allowing their producers to decide where and how it will be spent may be the best alternative, especially if those dollars are collected outside of the act and order. This gives them more control to use the dollars in the most effective manner possible.

On the positive side, those groups that have tried to create an issue with the checkoff by inferring that checkoff dollars are somehow used to support the policy side of NCBA seem more and more like shrill voices in the wilderness. While nobody who has looked at the program believes that the firewall has or will be crossed, it also has become obvious that one of the reasons that NCBA receives the vast majority of the projects isn’t simply because they have created an organization to do the majority of the projects more efficiently than most. There is also the issue that an organization must subject itself to intense government oversight with no gain to the organization; how many groups are willing to do that?

As one industry observer told me, “The consensus report won’t satisfy anyone, but undoubtedly will improve the checkoff.” Does it go far enough? No. If all the work of the working group goes for naught, will it be a disaster? No. Many of the suggestions will be incorporated or implemented by the various states as they increase control of their checkoff.

Perhaps there is no greater testament to the work that was done than that nearly every organization will have to work to get the support of its membership. The groups that have been committed to its demise are the ones that are most vehemently disagreeing with its suggestions.

The good news is that while there remains a minority who wish to destroy the checkoff, there’s also a large majority who wish to improve it and it will be more difficult at this point to destroy the checkoff than to fix it. That’s true even if both appear to be uphill battles.

The opinions of Troy Marshall are not necessarily those of beefmagazine.com or the Penton Farm Progress Group.

 

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Discuss this Blog Entry 1

John R. Dykers, Jr (not verified)
on Aug 22, 2014

All the dollars come out of the pocket of 'the producers', cattle people raising cattle. "The Industry" that profits from the improvement in beef consumption includes all the feeders, packers and retailers who don't put any money in.
Please write about the dollars and who they come from and who they go to. Follow the money. Then we can all know better what to support. When you waffle instead of straight talk about the money, you lose credibility.
Support is easy with current high live cattle prices, but input costs are rising and will soon rise even more rapidly.
johndykersmd@dykers.com

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What's My View From The Country?

As a fulltime rancher, opinion contributor Troy Marshall brings a unique perspective on how consumer and political trends affect livestock production.

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Troy Marshall

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock...

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