A push to change the beef checkoff law is going to come down to a combination of a leap of faith and a lack of trust for a cattle industry with a long history of fights over the checkoff.
The vote Thursday by the Cattlemen’s Beef Board seeking congressional changes to the checkoff led to praise by one cattlemen’s group seeking to reform the checkoff, while leaders with the National Cattlemen’s Beef Association were more skeptical, even though NCBA’s federation division implements checkoff programs and NCBA members have traditionally been chief defenders of the checkoff.
Members of the U.S. Cattlemen’s Association were largely ecstatic by the Cattlemen’s Beef Board action, which would seek a producer referendum to increase the checkoff from a $1-per-head assessment to $2, as well as open up the checkoff contracting to other non-profit, industry groups that currently are not eligible for checkoff dollars.
“This is a change that producers have actively sought in their checkoff program,” said USCA President Jon Wooster, a San Lucas, CA rancher. “A periodic producer referendum is an already existing provision in the law. 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 CBB laid out some recommendations that will go to USDA and potentially to Congress to change the Beef Act, as well as industry recommendations that can be changed without amending the law.
Some ranching groups, including the U.S. Cattlemen’s Association and the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA), have touted promoting U.S.-born-and-raised beef. According to a 2006 Gallup Organization survey of 8,000 cattle producers, 92 percent of those polled either strongly agree or somewhat agree that the checkoff dollars should be used only to promote U.S.-born-and-raised beef.
“We feel like they should have one more point: born, raised and processed in the U.S., with a portion of checkoff dollars going to promote those products,” Wooster said.
The CBB stated the checkoff already allows cost-share spending to promote branded products, including branded products touting beef born and raised in the U.S. Still, the U.S. Cattlemen’s Association wants a portion of the checkoff set aside to promote generic products matching country-of-origin labeling of born, raised and slaughtered in the U.S.
“We’re going to support our policy, which is basically to use a portion of the checkoff dollars for the born, raised and slaughtered in the U.S. products,” Wooster said.
Despite surviving a legal challenge in 2005, the checkoff has been under duress over the past year as the cattle herd retracts. The USDA cattle inventory report released Friday bore out some of the numbers. All cattle and calves are two percent less than a year ago. The calf crop is two percent smaller and cattle on feed are down seven percent as well. The beef cow herd is the smallest since 1963.
Last September, the Cattlemen’s Beef Board and Federation of State Beef Councils Operating Committee cut $6 million from the checkoff budget, then came back later and cut another $1.4 million. This week, the Operating Committee went even further and cut an additional $2.5 million earlier this week as well. The budget for 2009 is now set at $41.7 million.
One of the biggest issues surrounding the checkoff is the role and relationship of the Federation of State Beef Councils, which is effectively known as the NCBA Federation Division. Made up of state beef councils from across the country, the group serves as the checkoff side of NCBA. Despite the defense made that NCBA keeps a “firewall” between the checkoff and policy side, it’s still a source of discord among cattle producers.
That discord led the Cattlemen’s Beef Board to recommend that the Federation of State Beef Councils break away and become an actual separate entity from NCBA.
“There is this perception out there,” Charles Miller, a Cattlemen’s Beef Board member from Kentucky, said at the meeting Thursday. “All of this didn’t come from the ‘fringe groups.’ A lot of this came from our circle of friends.”
Miller noted that NCBA doesn’t have to listen to the Cattlemen’s Beef Board recommendations. However, NCBA has created a new governance committee to look at changes in structure.
That idea of splitting the federation and policy aspects of NCBA has been a sore spot for checkoff critics in the industry, but backers maintain that when the checkoff was created in the 1980s, uniting the federation and policy under NCBA established one plan, one budget and one long-range vision for the industry.
“If we do what they want, we are starting back where we were before 1985,” said Alan Albright, an Iowa producer and chairman of the NCBA Federation Division. “And that’s something we can’t live with.”
To increase the checkoff assessment and open it up to other groups for funding, it’s going to take the entire industry working together, Albright said. He thinks right now there may be too much division within the industry to make the push. It’s also going to require a lot of resources from NCBA’s policy division, which can lobby Congress. The federation and Cattlemen’s Beef Board members are restricted from lobbying.
“CBB has got the right to send recommendations to USDA, but really, if you are going to have a change, the policy side has to carry the water,” Albright said. Right now, NCBA may be reluctant to heavily invest resources into such an effort. “This is going to cost the policy side a lot of money just to get this thing going.”