2 OCTOBER 6, 2008

Cattle Market & Farm Reports, Editorials
Dec 3, 2008

More beef politics

Montana’s new Democratic senator, John Tester, decided last week that it was time to take on the Beef Checkoff and make it more friendly for cattlemen’s groups that are outside the current contracting loop. Tester’s bill, The Beef Checkoff  Modernization Act, will require the Beef Checkoff to spend 30 percent of their marketing funds promoting only U.S. beef. Never mind that 90 percent of our beef is U.S. born, raised and processed. The timing of this announcement came the day before Country of Origin Labling (COOL) was to be implemented.

Tester also wants producers to hold a vote every seven years to make certain that producers still want to have the program. He will require the creation of an Importer’s Qualified Beef Council that will be maintained by the Secretary of Agriculture and require importer contributions be divided up, half going to the importers council and half going to the Cattlemen’s Beef Board (CBB). Those importer contributions are currently in the neighborhood of $6-7 million.

“Our marketplace is dysfunctional because U.S. producers are forced to pay to market and promote their competitors’ product—imported beef,” said Bill Bullard, CEO of R-CALF USA. “Senator Tester’s bill helps correct this problem by allowing U.S. producers to begin marketing and promoting their U.S. beef to U.S. consumers.” With the current volume of middle meats, it wouldn’t appear that consumers are very concerned about purchasing beef at all, much less U.S. only beef. The Beef Research and Information Act currently requires that “qualified state beef councils” are the ones to collect the dollar per head assessment. This amendment would change that to “qualified beef councils,” which is defined as a beef promotion entity that is authorized by state statute or is organized and operating within a state that receives voluntary contributions and conducts beef promotion, research and consumer information programs and is recognized by CBB as a state promotion entity.

Our friends at R-CALF, Western Organization of Resource Councils, and the United States Cattlemen’s Association have worked with Tester on this bill. And it appears that any state governor could allow these groups to become a state promotion entity.

However, CBB must approve the organization. Tester recited several facts from a Gallup survey conducted as part of the settlement of the lawsuit by the Livestock Marketing Association against the Beef Checkoff. This survey information is already two years old, but at that time, 92 percent of respondents thought CBB should spend some money promoting U.S. beef, where possible. Sixty-six percent would approve of CBB contracting with any entity other than current policy which is to contract with established entities. Eighty-two percent thought there should be periodic votes to ratify the Beef Checkoff. Apparently, Tester’s staff didn’t find the need to have a dialog with CBB or much less Farm Bureau, National Cattlemen’s Beef Association (NCBA), or any other large group representing cattle producers.

The way I read this amendment is that it could essentially destroy the current structure between state beef councils and CBB. I’m not really sure that I care about NCBA’s role in the program. I would prefer the old arrangement when the National Livestock and Meat Board did the promotion. Especially when the office in Chicago, IL, is still there.

CBB has made an effort to contract projects with many more organizations and there is currently a group working on strategy to make some changes to the Act and the Order. Funding is perhaps the greatest problem CBB faces. I see no real benefit to the beef industry if they are forced to live with some of these specified guidelines that are being suggested by Tester and the organizations supporting him. Some of these groups have asked that state beef councils be allowed to earmark their contributions to CBB for specified projects, like promoting only U.S. beef. These proposals will only create more administrative costs for the organization and division among cattle producers. Checkoff funding is already thin and it would not be wise to dilute current budgets further with earmarks. COOL was a mistake and I don’t see any benefit in creating another mistake with the Beef Checkoff. Dividing the industry even more will not create any value. This industry needs to decide what we can do to create a unified effort to create more value for cattle producers.