Feb 6, 2009

All aboard


Last week was the big National Cattlemen’s Beef Association (NCBA) annual meeting. Crowds were down a bit, along with the market. Selling beef was on everyone’s mind and the Beef Checkoff Program was getting a great amount of attention. The Cattle men’s Beef Board (CBB) realizes they need to make a few changes to the Beef Act and Order and, of course, they are trying to figure out how to get some additional funding to promote beef. The $1 per head, mandated in 1986, has lost nearly 55 percent of its buying power.

CBB assigned a subcommittee the responsibility of coming up with a plan to streamline the organization and come up with a strategy for passing a new referendum which would increase the assessment to $2 and allow it to be increased later to $3. The task force asked nearly all producer groups to make comment on better ways for CBB to function.

There was a series of nine amendments the subcommittee proposed. Some of the recommendations include opening up the eligible contractor base, giving states the ability to organize regional beef councils, expanding the time CBB board members could serve, along with other procedural measures.

What makes this thing interesting are some of the issues that can be performed outside the limitation of the Beef Act and Order. The committee report emphasized the producer comments that the structure of the Federation of State Beef Councils (FSBC) be clarified in order to strengthen the industry stakeholder understanding. It was also suggested that there be a clear separation between FSBC and NCBA in order to gain further support for the checkoff. This was an issue they are apparently going to forward to the NCBA’s Governance Task Force.

Another suggestion was to amend the structure of FSBC so State Beef Council (SBC) money would flow to CBB rather than NCBA. It was also recommended that there be a periodic producer referendum, suggestions were somewhere between every five to 10 years.

One of the more contentious issues was about setting aside funding to promote U.S. born and raised beef. There has been much debate on this issue and CBB says there is nothing that would prevent the various SBCs from co-sponsoring U.S. beef promotion, so no direct allocation for U.S. beef promotion was required.

Ironically, NCBA passed a resolution supporting promotion of U.S. born and raised beef in their policy division board meeting. A number of those present weren’t terribly fond of many of the suggestions in the package. They thought many of the suggestions would add additional burden to the program and make it less efficient and cost more in the long run. One element NCBA members didn’t like was to exempt any animal that sold for less that $50 from the checkoff. They felt that there would be a lot of dairy steer calves that would be exempt and they didn’t want to let the dairy industry off the hook. The CBB executive committee passed the nine recommendations to change the language of the Beef Act and Order and forwarded the amendments to the secretary of Agriculture by a 70 to 18 vote. Many of the other recommendations regarding FS- BC will be forwarded to the NCBA Governance Committee for consideration.

The NCBA Governance Committee was established to streamline the decision-making process at NCBA. One of the committee members said they would have suggestions to improve NCBA’s structure by the next annual meeting—a year away— which is a demonstration in itself of how long it takes NCBA to make decisions. The goal is to transform NCBA into a nimble organization that is able to respond rapidly to the changing business climate.

This is going to be an interesting episode to watch between NCBA, CBB and FSBC. It will still take several years to increase funding as a result of the nationwide producer referendum process. Accomplishing the task will require the work of NCBA and other organizations who will be responsible for selling it to producers.

A quicker way to accomplish it would be turning the states loose to expand their funding efforts and then send any additional funds to FSBC. These checkoff changes appear to have the ability to divide our industry further. One thing is certain and that is nothing will happen to the checkoff unless all the cattle groups are on board. — PETE CROW