by Corey Geiger, Managing Editor
Frustrated by the entire beef industry's inability to come together and enhance the Beef Checkoff program that dates back to 1985, USDA Secretary Tom Vilsack told members of the "Beef Checkoff Enhancement Working Group" this past Tuesday that he would take action. That news came via a press conference held by the National Cattlemen's Beef Association (NCBA).
After listening to the audio from the NCBA press conference and reading follow-up reports from other outlets, it was clear the USDA Secretary was disappointed with the lack of progress by the work group. As a result, he told the industry that he would issue rules to enact a supplemental beef checkoff program. That program could be up and running in January 2016, but it may be up to three years before there is even a producer vote on the matter. Federal law in the 1996 Generic Commodity Promotion Act supports all these concepts.
How did the beef industry get to this point?
In our mind, the lack of consensus by the Beef Checkoff Enhancement Working Group and the fact that the National Farmers Union and the U.S. Cattlemen's Association walked away from the bargaining table was the final straw that led to Secretary Vilsack's decision last Tuesday. That work group had met three times since the Secretary sat down with them last December. At that December sit-down meeting, the Secretary asked the 11-member organization to get behind one idea that the entire beef industry could support. As of yet, that hadn't happened.
The Secretary told industry representatives that he planned to use rules in the 1996 Generic Commodity Promotion Act to run the supplemental checkoff which could collect another $1 on top of the $1 already collected via the 1985 Beef Checkoff, which needs an act of Congress to change.
Certainly, there are other issues surrounding the 1985 Beef Checkoff. That program was written in a fashion that checkoff funds controlled by the Cattlemen's Beef Board (the dairy equivalent of DMI) are distributed through contracts approved by a 20-member operating committee made up of 10 members from the Cattlemen's Beef Board and 10 members from the Federation of State Beef Councils. As DTN's Chris Clayton reported, the federation is a division of NCBA and shares offices and other expenses.
That is one of the principal reasons that the National Farmers Union walked away from the negotiation table as it pointed out in a release, "The Cattlemen's Beef Board must have the authority to carry out checkoff projects on its own, similar to other checkoff oversight boards."
For dairy producers unfamiliar with the beef checkoff but familiar with the dairy checkoff, that might be a confusing point. Let's bring it to full clarity. The fact that the National Cattlemen's Beef Association controls the Cattlemen's Beef Board's purse strings is like the National Milk Producers Federation controlling Dairy Management Inc. (DMI) checkoff dollars.
As for the plan moving forward, Forrest Roberts, the CEO of NCBA, had this to say last Friday, "There will be an opportunity for all stakeholders in the beef industry to provide comment on this new order over the next several months.
"And based off of that input, he (the USDA Secretary) would issue the new (checkoff) order and that order would be implemented for a period of up to three years before there would be a producer referendum on whether or not there was support to continue," said Roberts.
As for the sticking points, who controls the funds moving forward and the extra $1 per head are some of the key issues. But so, too, are provisions for producer refunds and just how a referendum on the 1985 would ever take place.
To be clear, NCBA isn't thrilled with the latest plan by the USDA Secretary.
"After participating in these meetings for over three years, I was really surprised by the Secretary's announcement," said immediate past NCBA president, Scott George, who is a beef and dairy producer in Wyoming.
"As I've come home and stared talking to other producers and explaining what he is proposing, they are shocked and quite honestly surprised. Most of them have responded and are saying, ‘Now, wait a minute. We are going to have a supplemental or parallel program in addition to the one we already got? Isn't that inefficient and uncoordinated? We already have a system for collecting checkoff, we already have a system for oversight and we already have contractors doing work. Why do we have a supplemental checkoff . . . Why don't we enhance the one we got?'" summed up George.
We will be covering this topic more in the coming months.
