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Published May 03, 2010, 03:46 PM

The beef with producer groups

STURGIS, S.D. — Fuel, to a seemingly eternal fire, between producers and producer groups has been added recently with a proposal to changes in the structure of the Federation of State Beef Councils. The group making the proposal, The National Cattlemen’s Beef Association, which has housed the federation since the merger of the National Cattlemen’s Association and The National Livestock and Meat Board/Beef Industry Council in 1996, seems to think it should be business as usual.

By: Gary Deering,

STURGIS, S.D. — Fuel, to a seemingly eternal fire, between producers and producer groups has been added recently with a proposal to changes in the structure of the Federation of State Beef Councils. The group making the proposal, The National Cattlemen’s Beef Association, which has housed the federation since the merger of the National Cattlemen’s Association and The National Livestock and Meat Board/Beef Industry Council in 1996, seems to think it should be business as usual. One thing NCBA appears to forget is that, although it represents more cattlemen than any other organization — boasting membership at somewhere around 30,000 producers — the Federation of State Beef Councils is paid for, and funded by, some 956,000 cattle-producing men and women, many of whom are not affiliated with any policy-run organization.

Unless they are an NCBA member, I do not think it is right to comment on how they want to structure their organization, or on the day-to-day business they conduct. Although I would respect and hope NCBA would have comments and opinions toward the federation’s structure, I do not think it is right, nor fair, that they have assumed that they are the only voice that speaks towards that structure.

Our loyalty toward political and policy decisions often blocks our view of what really matters. The cattle-producing sector is in a crisis, according to data compiled by the U.S. Department of Agriculture’s National Agricultural Statistic Service report. It says there were 1.35 million producers in 1988, compared with 956,500 today. Controls because of environmental groups, government regulations and undervalued products that we sell have producers wondering if and when their time will come. One thing each producer will agree on, regardless of organizational loyalty, is that we need to keep the beef industry profitable.

Checkoff funds

The Beef Checkoff, which was conceived through a congressional act and order in 1986, brings forth the idea of building beef demand worldwide through promotion, and research. Although opinions on the effectiveness and legality of the checkoff differ, it was set up with the premise of building beef demand without letting politics get in the way. Every cattle producer pays the same $1 per head, regardless of whether they they sell one or thousands of cattle every year; beef importers pay $1 per beef equivalent. It is not supposed to be owned, nor represented, by any one organization, or group of individuals, but rather the entire beef industry.

When an animal is sold, the seller remits $1. The state beef council where the producer sells the animal collects the dollar, sends 50 cents on to the cattlemen’s beef board and keeps 50 cents for the state. The 50 cents that the state keeps is what recently has come into debate. The state beef council decides what they want to do with the 50 cents, of which a lot goes into the federation toward seats on the board, international promotion, etc. The states also can keep the money to promote various beef promotion and research projects within the state, nationally or internationally.

It appears NCBA needs to learn that the producers, through their state beef councils, not policy organizations, control and have the final say on the Federation of State Beef Councils.

In a survey conducted in 2006 by the Gallup Organization, and funded by USDA, producers were asked, “How, if at all, does NCBA’s involvement in the program affect your opinion of the checkoff?” Only 29.7 percent of the producers answered that they had a more positive opinion of NCBA’s involvement.

With this attempt to singlehandedly take the Federation of State Beef Council’s authority away, by restructuring the federation, it will be interesting to see how producers’ attitudes may change.

Concerns

It appears safe to say that most agricultural organizations have a great deal of concern about NCBA’s proposed governance structure. Several areas of concern were expressed in a joint letter to Secretary of Agriculture Tom Vilsack from several agricultural organizations including American Farm Bureau, National Farmers Union, Livestock Marketing Association, National Livestock Producers Association, National Milk Producers Association and the U.S. Cattleman’s Association. As a follow-up to the letter, Mary Kay Thatcher, director of ag policy for the American Farm Bureau Association, was quoted as saying that “the structure is problematic from the perspective of policy having too much influence, and problematic from the perspective that not every producer is a member of NCBA.”

R-CALF USA CEO Bill Bullard also has said “the proposed changes will give it more access to checkoff dollars, and without those extra dollars, NCBA probably can’t exist.” He goes on to say that “this is all about the future of NCBA, not the future of the checkoff.”

NCBA responded by defending the checkoff and its effectiveness to be a contractor. This was unnecessary because the checkoff and its contracting status are not in question. What it tried to clear up was the statement that everybody within the organizations “House of Delegates” does not have to be an NCBA member, but rather members would consist of, “all individual members of NCBA, members of the Federation of State Beef Councils, Breed Association Affiliates, and invited guests, like members of the Cattlemen’s Beef Board.”

Within its proposal, the House of Delegates holds several important responsibilities, including election of the board of directors (who must be an individual NCBA member), and electing the operating committee (which oversees and approves most checkoff contracts). So, its own defense made it even clearer that it do not want others meddling in the checkoff because the only chance anybody, but someone who is an NCBA member, or a member of an affiliated organization, could belong is if they were one of the few state beef council directors who is not an NCBA member.

Effectiveness

The Beef Checkoff has witnessed many things to be proud of through the years. It has many new cuts of beef that has been developed to meet the fast-paced lifestyle in which we live, it has handled crises such as bovine spongiform encephalopathy hitting the United States in December 2003, there are countless hours devoted to promoting United States beef internationally, and I have yet to meet anybody who does not know the saying “Beef Its What’s For Dinner.” To effectively promote beef, it will take an industry-wide effort, and I feel the checkoff has — and can — deliver results.

With this new proposal from NCBA — which is the largest contractor of the checkoff receiving more than 90 percent of checkoff funds — come many questions. First of all, NCBA must ask itself if it has a right as a contractor to tell the state beef councils how to structure its organization. Secondly, the state beef councils must ask if it wants to continue funding a contractor who apparently can tell it how to spend its producers money, or should it invest in other programs such as the Northeast Initiative, which promotes beef on the East Coast of the United States where checkoff funds are limited, but millions of people live; international programs such as U.S. Meat Export Federation; or simply keep money within its state for promotion or research at its local universities. As NCBA has stated, it is up to the state beef councils to voluntarily invest their money, so it may be time to see who really runs the Federation of State Beef Councils, the producers or their contractor.

Editor’s Note: Deering is a producer from Sturgis, S.D.

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