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Friend or foe?

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Oct 5, 2017

What side are checkoff opponents really on?

Pete Crow

Feeder cattle prices have remained strong going into the fourth quarter of the year, calves are trading around that $175 mark and yearlings are hanging tough at the $150 range. You can blame it all on good old beef demand.

Retailers are featuring lots of beef and the foreign markets look very good. Fresh beef exports to Japan were up 55 percent after they decided to impose their 50 percent tariff on frozen beef last August. We all thought that was going to do some damage. There is good honest demand for U.S. beef. So far, this year we’ve processed 1.3 million more cattle and there are another million head of calves coming to the market this fall. Certainly not the story we had last year.

Do you suppose we can give some credit to the beef checkoff and their investments in foreign marketing, or working with the health industry to debunk many health myths about beef? I would say so. But there are groups that want to destroy the beef checkoff because they are opposed to the National Cattlemen’s Beef Association and some of their policy positions, even though policy and the checkoff have nothing to do with each other.

Last week the Organization for Competitive Markets (OCM) filed a complaint with the Office of Inspector General at USDA claiming that the Oklahoma Beef Council (OBC) was using checkoff dollars to promote a new checkoff that would go directly to the OBC for their discretionary use; this proposed checkoff is refundable to producers. Oklahoma cattle producers will vote on the measure this month and then there is a designated voting day at local extension offices on Nov. 1.

The OBC has been under the gun from some of these anti-checkoff activists because they had an employee embezzle $2.6 million over a 10-year period. Clearly the OBC has been taking a lot of potshots over the episode. The employee, Melissa Morton, was a long-time worker who gained the trust of management and the board and started writing checks to herself—791 in all—at an average of $3,287 each. The irony is that the OBC has been audited every year by a third-party accounting firm and one year during the fraud, they were audited three times by an independent auditor including the IRS, yet no one caught it.*

The mistake was made and the OBC has put measures in place to ensure it doesn’t happen again. In a statement last week, the OBC board issued a response that said Morton was falsifying financial documents, bank statements and checks to cover up her crimes. They obviously charged her with fraud and conducted forensic audits to figure out exactly what measures she took to cover her tracks, and to place safeguards so it can’t happen again. Morton has pled guilty and is awaiting sentencing. OBC is aggressively pursuing recovery and restitution.

Right now, OBC is an easy target for the OCM to pick on, especially with the upcoming producer referendum on a second dollar checkoff. The board also said, “Finally, to be clear, the OBC is not involved nor has it funded the ‘Vote Yes’ beef checkoff referendum process in Oklahoma, led by a coalition of Oklahoma beef and agriculture organizations.”

Why would the OCM go after the beef checkoff in Oklahoma, or any other state for that matter when its run by producers to promote their product? That’s been the age-old question ever since the checkoff started. Could it be something to do with the Humane Society of the U.S. (HSUS)? We know that HSUS has been funding some of the legal work for the OCM because OCM doesn’t have the funds to do it. After looking at OCM’s IRS 990 tax forms for nonprofit organizations, it showed they had revenues of $25,168.

It would be hard for OCM to maintain a staff and payroll. They list Joe Maxwell as their director, who is also HSUS vice president of outreach and engagement. He is also a hog producer who has been cited for over 100 inhumane violations on his hog operations. Angela Huffman is OCM’s communications director, a position she apparently serves for HSUS, as well. Could it be that these two activists are on loan to OCM from HSUS? It looks kind of strange to me.

There are clearly a lot of beef producers who feel that they have benefited from the beef checkoff. Many states are working to set up separate state beef checkoffs. Texas cattlemen approved one last year, which is refundable to producers. But we also need to recognize that several of these beef activist groups need to be called out and recognized for what they are. HSUS is not animal agriculture’s friend. — PETE CROW

*Edit (Oct. 9): This originally read "The irony is that the OBC has been audited every year by the Cattlemen’s Beef Board and one year they were audited three times by an independent auditor, yet no one caught it." It was brought to WLJ's attention that these details were not correct. We apologize for the mistake and welcome reader feedback on the accuracy of both our news items and factual details in our opinion pieces.

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