Checkoff Reform On The Way, Vows USDA Secretary Vilsack

Following the most comprehensive study ever rendered regarding return-on-investment (ROI) on beef checkoff assessments, Cornell University’s Harry Kaiser concludes that each dollar invested in the beef checkoff program between 2006 and 2013 returned about $11.20 to the beef industry. That’s according to a press release from the Cattlemen’s Beef Board (CBB), the entity that oversees the program.

I’m a big fan of the beef checkoff program. In fact, in the interest of full disclosure, I write press releases for the South Dakota Beef Industry Council, and I’m proud to be a part of a producer-run program that helps promote and sell beef around the world.

That said, with fewer cattle and cattle producers in the U.S. these days, the pool of funds collected via the checkoff program is at an all-time low, never mind the decreased buying power due to inflation. This puts added pressure on how those dollars should be used for maximum effectiveness, as well as sparking conversations about whether it’s time for the industry to raise the assessment from $1/head of cattle sold to $2/head.

 

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Of course, any time you try to reach consensus among an independent-thinking and self-reliant bunch like U.S. beef producers, you’ve got a challenge on your hands. It’s no secret that opinions among cattlemen’s organizations and checkoff stakeholders vary regarding the best way to utilize checkoff dollars and which organizations should be able to contract their services through the program.

All this jockeying for position and internal bickering has apparently gotten the attention of USDA. In a recent speech presented at a fly-in event by the National Farmers Union (NFU), USDA Secretary Tom Vilsack shared his frustrations and said he’ll use his authority to make necessary changes to the program.

According to the Kansas Ag Network, “NFU voted to leave the working group because of what it called an inability to get anything accomplished or moved forward. Vilsack noted the issues with the checkoff are both the amount of money to be raised and the decision-making process about how it is spent and who spends it. The $1/head collected on the sale of live domestic and imported cattle has not been raising enough money in recent years since cattle herds are smaller. Vilsack urged the working group to resolve the problems within the group to reach a proposal.  The National Cattlemen’s Beef Association (NCBA) has proposed raising the checkoff to $2, but other farm and cattle groups have said they will not agree to that unless the process for managing the checkoff is made more transparent and other groups can get part of the checkoff budget.”

Here is what various organization spokespeople have to say about the issue:

  • NCBA President Bob McCan said, “We will continue to work with other industry organizations to look for ways to maximize the efficiency and effectiveness of the program. However, we should be careful about jeopardizing a beef checkoff that has overwhelming support from producers, and is having terrific success domestically and internationally.”
  • “If the checkoff is to grow and thrive, substantial reforms are needed,” said Jon Wooster, president of the U.S. Cattlemen’s Association. “Secretary Vilsack remarks indicate the administration is committed to seeing this process through. We certainly look forward to engaging fully with USDA in revising the beef checkoff in a manner that addresses long-standing issues with the program and in ways that serve the interests of all U.S. cattle producers.”
  • “The secretary isn’t alone in his disappointment about the lack of progress in changing the beef checkoff. It’s been a long slog and we’re skeptical this group of 10 associations can ever sing ‘Kumbaya’ without some kind of intervention,” said Mary Kay Thatcher, an American Farm Bureau Federation official.
  • Meanwhile, a statement from CBB said, “We will follow the rules of the act and order, whether they change or remain the same.”  

After NFU’s self-removal from the checkoff working group, the organization listed the following reforms necessary for its buy-in to the checkoff:

  • The CBB must have the authority to carry out checkoff projects on its own, similar to other checkoff oversight boards.
  • The CBB must be allowed to enter into checkoff contracts with non-policy organizations and private companies, such as ad agencies and public relations firms, in order to prevent policy-driven organizations from using checkoff dollars to fund overhead for political activity.
  • The beef checkoff must be completely refundable.
  • A referendum on the continuation of the beef checkoff must occur every five years, and NFU’s board recommended that USDA “consider rewriting the beef checkoff program” under the generic Commodity, Promotion, Research and Information Act of 1996.

What do you think about the proposed reforms? Do you feel these changes are necessary to make the checkoff better? Or are you satisfied with an $11.20 ROI? What are some working solutions to resolve the industry’s internal bickering? Share your thoughts in the comments section below.

The opinions of Amanda Radke are not necessarily those of Beefmagazine.com or the Penton Farm Progress Group.

 

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