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Published August 18, 2014, 10:10 AM

Beef groups differ on check-off revamp

The three-year attempt to make recommendations to Congress to revamp the Beef Checkoff program might be in trouble.

By: Jerry Hagstrom, Agweek

WASHINGTON — The three-year attempt to make recommendations to Congress to revamp the Beef Checkoff program might be in trouble.

Recently, the 11 groups that make up the Beef Checkoff Enhancement Working Group apparently came up with a set of recommendations some members view as a last attempt at consensus.

R-CALF USA, which is not a member of the group, issued a warning that other farm groups plan to agree to a proposal it considers “smoke and mirrors,” while some participants in the working group said no agreement would be announced until this fall or winter, if ever.

In addition, Chandler Keys, a former National Cattlemen’s Beef Association vice president who now represents Brazilian-based meat company JBS and other clients, wrote on July 29 that there are so many problems associated with the national check-off that producers should abandon it in favor of state check-offs.

The working group was established in response to a proposal to raise the beef check-off —from $1 per head each and every time an animal is sold to $2 per head — and complaints the check-off was benefiting the National Cattlemen’s Beef Association, which has been close to the management of the check-off dollars.

The group is supposed to make recommendations to Congress, since congressional action is the only way to make major changes to the program under the 1985 law that established it as a way for producers to engage in research and promotion efforts. Congressional farm leaders have told the group it would be impossible to make changes without a broad consensus.

The working group consists of the Livestock Marketing Association, National Livestock Producers Association, U.S. Cattlemen’s Association, National Farmers Union, American Farm Bureau Federation, American National CattleWomen, Meat Importers Council of America, National Milk Producers Federation, National Cattlemen’s Beef Association, Federation of State Beef Councils and Cattlemen’s Beef Board.

The other groups decided to exclude R-CALF USA, formally the Ranchers-Cattlemen Action Legal Fund, and United Stockgrowers of America, a ranchers’ group based in Montana that made its reputation advocating for country-of-origin labeling.

R-CALF USA says the other groups excluded it because it “would not even consider an increase of the check-off assessment to $2 until the ongoing abuses and conflicts of interest within the Beef Checkoff Program were fully resolved.”

The other groups note that R-CALF USA had filed a lawsuit in August 2012 against U.S. Department of Agriculture, Agriculture Secretary Tom Vilsack, the Cattlemen’s Beef Board, Beef Promotion Operating Committee and Agriculture Marketing Service regarding the operation of the Beef Checkoff Program.

NCBA says the 11-member working group “has made several recommendations” that have been “subsequently implemented,” including “expanding of contracting authority and a new joint committee structure.”

The proposal

The working group has not released the details of its proposal, but R-CALF USA says it included raising the check-off to $2, with all or part of the second dollar to be refundable, and establishing a system under which 10 percent of producers could vote every three, five, seven or 10 years to initiate a referendum, as well as make other changes to management.

“R-CALF USA views this new proposal as nothing more than smoke and mirrors — a diversion designed to stall any meaningful effort to restore for U.S. cattle producers a program that effectively and efficiently promotes beef and is accountable to the producers who fund the program,” CEO Bill Bullard said to members, “If you are a member of any of the above listed organizations, please contact their leadership as quickly as possible to urge them to reject this ill-conceived proposal.”

Conflict of interest

The new management structure would heighten the conflict of interest with NCBA and allow the other groups to apply for check-off funds, the memo says.

But it appears the organizations within the working group are not moving so fast.

NCBA’s board, which met recently in Denver, approved a motion for the working group “to continue their work and bring back the Memorandum of Understanding regarding enhancing the national Beef Checkoff to the NCBA board of directors for action.”

Chandler Goule, a National Farmers Union senior vice president, says, “Discussions to reform the beef check-off are ongoing among industry groups. NFU is committed to ensuring that strong oversight is part of the beef check-off. No final decisions have been made, either by NFU leadership or among the other organizations.”

‘Ongoing discussion’

Jess Peterson is the Washington representative for the U.S. Cattlemen’s Association, which was formed after a disagreement with R-CALF USA.

“There are several key items that are being worked out and remain part of an ongoing discussion,” Peterson says. “If, or when consensus is reached, a public letter and statement will be made.”

He adds there is a “good chance” a resolution will be announced this fall.

Rudy Arredando of the National Latin Farmers & Ranchers Association says his group is against the proposal.

“The obvious lack of imbalance in this process excludes the small and independent beef producers and is terribly unfair,” Arredando says. “We are opposed and need a robust representation in any and all deliberations impacting on this industry.”

Reduced income

The decline in the number of beef cattle has reduced the check-off income, and during its meeting, the Beef Board unanimously approved a $40.2 million budget for fiscal year 2015, down 2.6 percent from $41.3 million in 2014, which itself was down 4.2 percent from 2013, the board said in a news release.

Of that $40.2 million for fiscal year 2015, about $37.5 million will be available for funding of the contractor proposals that make the operating committee’s final cut in September. The remainder of the budget covers other check-off expenses, including evaluation, program development, USDA oversight, and program administration.