What often happens in long-running disputes is that over time the origin of the disagreement is forgotten. A good example of this is the beef industry's “family feud” over the national beef checkoff, which is currently before the U.S. Supreme Court. The nine Justices are weighing an appeal of a lower court ruling that the checkoff violates producers' First Amendment rights to free speech and association.
While the future of the checkoff is now cloaked in the legitimacy of a constitutional question, most folks have forgotten the whole mess began when the Livestock Marketing Association (LMA) was omitted from the Strategic Alliance Study conducted by the National Cattlemen's Association (NCA) in 1992.
This study, in which no checkoff dollars were used, was designed to learn what efficiencies a more streamlined beef production and marketing system could achieve. It ended up becoming a prototype for today's 40 or so value-based, beef marketing alliances.
In such value-based alliances, the various segments communicate among each other and coordinate efforts in order to deliver a more valuable end product, thereby generating more revenue for each segment in the chain. These value-based alliances, which generally involve some form of retained ownership, often bypass the auction market segment.
LMA's discomfort with the industry's direction finally boiled over in January 1998. That's when National Cattlemen's Beef Association (NCBA) President Clark Willingham in a BEEF magazine interview appeared to take a swipe at auction markets' role in a new value-based system — something he later said was a misinterpretation.
LMA responded by immediately calling for a referendum on the checkoff. In the end, it turned out LMA didn't have enough valid signatures of 10% of beef producers required by law for the USDA Secretary to call a referendum.
LMA then moved to the courts, suing USDA in District Court to force a referendum. When the U.S. Supreme Court in U.S. v. United Foods in August 2001 ruled the mushroom checkoff unconstitutional under the First Amendment, LMA amended its case to cite those principles. District Judge Charles Kornmann subsequently ruled the beef checkoff unconstitutional.
The 8th Circuit Court of Appeals later affirmed Kornmann's verdict, followed by a refusal by the full 8th Circuit to rehear the case. In February 2004, the U.S. Justice Department asked the Supreme Court to review the decision, which the Court agreed to last May. Oral arguments were presented last fall and a decision is expected any time.
Changes are coming
As Walt Barnhart writes in his page 34 article, “Go-Time For The Checkoff,” regardless of how the question is decided, changes to the program are likely. Even if the checkoff is upheld, the industry can't sustain this fierce infighting.
The sad thing is the checkoff is very popular among producers. Surveys conducted since its inception consistently indicate support levels of 70% or better.
Research also shows the more producers know and understand about the checkoff, the more likely they are to support it. One of the checkoff program's most nettlesome problems, however, is many producers are ignorant of the checkoff's workings and don't care to learn. That leaves some fertile ground for all kinds of myths and mischief, which anti-NCBA groups gleefully propagate.
One of the prominent myths is that the policy/dues side of the NCBA controls checkoff dollars. The myth is that if the checkoff dies, so does NCBA (the dues division), which is untrue since membership dues support the dues division — not checkoff funds.
An umbrella organization
Many folks also don't realize “NCBA” is the umbrella organization. Under that umbrella are the dues division (whose members devise policy and whose staff lobbies to get that policy passed) and the checkoff division (which helps decide promotion and research direction and spending). The law forbids the use of checkoff dollars for lobbying.
This arrangement was devised when NCA and the National Live Stock and Meat Board merged in 1996. The idea was to bring the two organizations closer together for a more unified focus, as well as better coordination of programs and improved cost efficiencies.
That the plan worked well is attested to by the resurgence of beef's position in consumers' minds and on the dinner plate. But, having undergone years of internal warfare, perhaps it's time for the industry to do with a little less efficiency — if it will move the industry forward by resolving some internal conflicts. Perhaps it's time for the dues/policy division to distance itself from the checkoff side of the NCBA apparatus.
Perhaps it's time for the state beef councils — organizations that function within the states where the dollars are collected — to take on a larger role. This could remove some of the impersonality of a more nationally focused program and provide more home-state accountability, It would also buffer a major factor anti-NCBA forces like to exploit.
It's likely some efficiency would be lost with the revamping, but the industry would be farther ahead. A unified — perhaps slightly more inefficient — industry charging ahead with one message could likely outperform a disunited, but more efficient, industry torn by internal strife.