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Troy Marshall

November 20, 2014

9 Min Read
NFU “Clarifies” Its Beef Checkoff Position, Hangs Vilsack Out To Dry

The National Farmer’s Union (NFU) confused a lot of people recently with its latest pronouncement that seems to have taken the beef checkoff discussion in a whole new direction. 

At first blush, it seems that NFU made a major shift in its position toward the beef checkoff. In short, NFU now is saying it doesn’t want two checkoffs; it wants one checkoff, but wants the current effort, created by the 1985 Beef Promotion Act and Order, to be repealed.

Recall that NFU was part of a beef checkoff task force seeking ways to make the program better. Also keep in mind that it was NFU that had the political IOUs and capital to sabotage the process by removing itself from the working group just as it had reached consensus and was putting forth a proposal to reform the beef checkoff. It was NFU along with USDA Secretary Tom Vilsack that orchestrated this political drama, where NFU asked the Secretary to create a second checkoff via the ’96 generic checkoff act. 

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Vilsack dutifully announced that he would do just that in September. Then this week, NFU seemingly cut the legs out from under Vilsack, shocking the Beltway by saying it would not support the second checkoff. 

NFU’s apparent change of direction has left everyone in the beef business trying to figure out who’s on first and what’s on second, as the old comedy routine goes. With NFU now saying it supports reform but will not support Vilsack’s proposal to create a duplicative, separate beef checkoff, it leaves Vilsack with essentially no support from the beef industry. 

It’s true Vilsack may defy essentially the entire industry and go forward with his proposal to create a government-run, second beef checkoff. But that was supposed to be political payback to NFU, and now NFU is saying it doesn’t want it. It puts Vilsack in a real quandary.

NFU’s position based on a great fallacy

NFU, to its credit, essentially admitted that its problem with the checkoff is based on what it perceives as the great fallacy that was created with the formation of the merged National Cattlemen’s Beef Association (NCBA). As I’ve said in previous columns, the merger was a tremendous success in that it created the infrastructure needed for the industry to effectively build beef demand and compete in an ultra-competitive marketplace. 

The irony of this success is that it created confusion. There are two organizations essentially with the same name – the policy side and the checkoff side. NCBA’s policy side is the cattle industry’s largest member organization; by anyone’s metrics, it’s the most powerful voice for cattle producers in Washington, D.C. Of course, on the policy side, NCBA has largely disagreed with NFU and its positions. 

Thus the rub, and despite the fact that independent audits show that:

  • The firewall between the checkoff side and the policy side has been maintained,

  • The policy side, if anything, has subsidized the checkoff side,

  • And that the creation of NCBA on the checkoff side greatly increased efficiencies and overall effectiveness of the beef checkoff.

However, many feel that somehow, some way, NCBA’s policy side is benefitting directly or indirectly from the checkoff program. They believe they can hurt NCBA’s policy side by hurting the checkoff side. 

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Here’s the bigger rub: when the industry looks at the programs conducted by the beef checkoff, the conclusion is that the beef checkoff has greatly benefitted producers, and the primary problem is that the program is underfunded. That’s followed closely by the fact that the beef checkoff is burdened by excessive oversight and government control that hampers the beef industry’s effectiveness in promoting its product.   

The opponents of NCBA’s policy side have the goal of reducing the funds, because they believe NCBA is benefitting from the beef checkoff; if not monetarily, then in other ways. As a checkoff contractor, NCBA receives 93% of the funds from the checkoff. That, however, can be misleading, because the overwhelming majority of that money is simply pass-through funding; that is, NCBA contracts with advertising agencies and media outlets on advertising buys, with universities on research, and with other third parties for work done on behalf of the beef checkoff.

So we’re actually fighting over a very small pool of money. But, then again, the money isn’t the crux of the fight. Emasculating NCBA is.

Creating policy

The original checkoff act specified that checkoff contractors need to be cattle organizations. While it’s true that groups like NFU can, have applied, and even received funding to, execute programs approved by the Beef Board, the reality is that the merger did what was intended; it created an organization with the expertise and infrastructure to execute demand-building programs at a very competent and efficient level for the industry.  

NFU doesn’t want a fairer process to compete for funds. It knows it isn’t competitive. Nor does it have the expertise or desire to conduct checkoff programs in the first place. NFU simply wants to have what NCBA created without giving NCBA the credit for doing it. Thus, the beef checkoff is, and always has been, great political hay for groups opposed to NCBA to insinuate that NCBA’s policy side is somehow benefitting from checkoff dollars. The struggle is that they need NCBA to continue to conduct the programs with the same effectiveness and efficiency that it has been. 

NFU’s frustration with the three years the checkoff working group spent looking at ways to improve the checkoff was because the group actually wanted to improve the checkoff, not kill it. The bottom line is this: while there were a lot of little things to do, the biggest positive change that came from the working group was a proposal to increase funding. That, of course, doesn’t bring comfort to those who believe NCBA’s policy side is benefitting somehow from the checkoff.

NFU’s clarification of its policy was in some ways a little ominous, as it indicated it wanted one beef checkoff and would not support the absurdity of having two duplicative checkoffs at the same time. NFU hinted it would support the government taking over the checkoff once the ’85 Act is repealed. 

However, enjoying overwhelming support of cattle producers, the checkoff would be impossible to kill via a referendum. Nor is there the political will in Washington, D.C., to repeal the checkoff. That leaves NFU in the position of being able to complain about the current system without the burden of having to deal with being responsible for any changes that would hurt producers and the industry in general. 

It appears we’re back to trying to move forward with the changes proposed by the working group, or NFU’s proposal to leave the current checkoff in place until it can be repealed and replaced with what NFU wants. It’s rather surprising, however, that NFU asked for this huge political favor, executed the gambit, and then realized it had put itself in a politically untenable position. 

I would like to be a fly in the wall in Vilsack’s office; I imagine he is none too happy about sticking his neck out to reward a group for political reasons, just to be left by that group hanging out on a branch all by his lonesome. I see no way Vilsack can save face and retreat, yet he has no incentive to move forward, either. 

A possible solution – a name change

How about this solution? It can all be fixed with a name change. 

The issue has never been about the checkoff structure; it has always been about politics and sharing the name between the checkoff and policy sides of NCBA. So, we fix the problem not by changing the structure of the beef checkoff—the structure stays the same, the offices stay the same, the staffing is unchanged because it works and works amazingly well. 

Instead, NCBA’s policy side changes it name back to the National Cattlemen’s Association (NCA) and/or NCBA’s checkoff side changes its name to something like National Beef Checkoff Organization. I realize those suggestions are still too similar, but if we are going to continue to waste political capital over false perceptions created by a name, while everyone fundamentally agrees on the results and the structure created, then why not fix the names? 

I’m only partly joking. NFU, R-CALF, U.S. Cattlemen’s Association, Humane Society of the United States, and all the others that disagree with NCBA’s policy side will not be satisfied with a name change. The implication that the firewall is somehow being broken has political legs. It is a perception that provides political benefits regardless of whether it has a basis in truth or not. 

NFU actually has given Vilsack an out to stop the process of defying the industry and creating a second beef checkoff. The question now is will he take it? I suppose NFU should be given kudos for taking the right stand and saying that two checkoffs is an absurd idea. The rest of the industry, though, is justified in wondering, after being deceived and politically sabotaged by NFU, just what NFU’s strategy is from here? 

Perhaps it was simply the leadership getting out in front of its membership and getting reeled back in. The surprising thing about this process is that it seems that’s been the case for nearly every organization involved. Maybe it’s a lesson that grass roots organizations need to keep in mind— the grassroots tend to be more pragmatic and less ideologically driven than those they elect to lead.

The opinions of Troy Marshall are not necessarily those of beefmagazine.com and the Penton Agriculture Group.

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