NFU wants beef checkoff split

Mar 16, 2012

National Farmers Union (NFU) delegates want the agriculture secretary to separate the Federation of State Beef Councils (Federation) from the National Cattlemen’s Beef Association (NCBA).

Wrapping up the NFU policy resolution just outside of Omaha, the delegates voted to recommend separation of the Federation from any policy organization to better provide accountability for the checkoff.

Coupled with those proposals, NFU delegates also want to ensure no organization would receive contracts adding up to more than 50 percent of the checkoff dollars annually.

Further, NFU delegates want any increase in the $1 checkoff to be tied to periodic referendums. NFU calls for the rewrite of the beef checkoff act to house the program with other mandatory checkoff programs.

NCBA and the Cattlemen’s Beef Board disagreed over a similar argument regarding the role of the Federation last year before leadership changes at the beef board. Some other groups also have called for the Federation to be broken off from NCBA, but Federation leaders have rejected such requests.

In an email to DTN, NCBA President J.D. Alexander stated that NCBA and other stakeholder organizations, including NFU, had met last September and in January to discuss ways to make improvements to the checkoff.

However, NFU members did not bring up most of the issues they outlined in their recent policy resolution at either of those earlier meetings, Alexander stated.

“The (September and January) meetings resulted in USDA publishing a proposed amendment to the Beef Promotion and Research Order that would remove the contractor eligibility date to allow industry organizations that were created after 1985 to contract with the Beef Promotion Operating Committee. NCBA will submit comments to USDA in support of the proposed change,” Alexander stated.

Alexander also stated that last year, the Federation adopted a charter that gives them more independence within the NCBA structure. He also noted growing support for the checkoff among producers.

“An independent survey of producers conducted by the Beef Board in December 2011 shows that support for the checkoff is higher than it has been in the last 18 years, with 76 percent of producers indicating support for the current program. Four in five producers say that the beef checkoff is of value to them and two of three believe it is well managed,” Alexander stated in the email.

The beef checkoff discussions were among the lengthiest debates at the conference as NFU delegates also debated changes to dairy policy and went section-by-section through the policy book.

The Oklahoma Farmers Union tried to tone down the checkoff language, particularly regarding checkoff referendums, citing that in a tough cattle market, it would be difficult to pass a referendum supporting the checkoff.

Yet, state leaders want to see reforms in the way the checkoff is operated. They argued one organization, NCBA, has too much control of the purse strings and NC- BA’s views tend to run counter of groups such as NFU.

Delegates also noted that a lot of advertising dollars are spent in states that actually have more cattle than people. “A lot of the money we pay for that checkoff check actually goes to advertise to us to convince us the checkoff is working,” said Richard Oswald, Missouri Farmers Union president and a DTN contributor.

Wayne Soren, vice president of the South Dakota Farmers Union, concurred with Oswald, citing a recent column breaking down advertising spending by the checkoff.

“A big part of our checkoff is convincing us we need the checkoff, which doesn’t do anything for us producers who want to sell beef,” Soren said.

In dairy policy, NFU called for an increase in the dairy support purchase price that would factor in the cost of production.

“Our language that we have would address the cost of production,” said California Farmers Union President Joaquin Contente. “Right now we have a volatile, nonfunctioning market. You have to have something in there that creates competition in order to achieve the value that farmers right now are not receiving.”

While the debate over dairy was long but civil, Contente said there were heated exchanges in the convention hallway trying to work out language on the resolution.

NFU delegates also stated that more action is needed by USDA and the Department of Justice to examine the lack of competition and price discovery in the dairy industry.

There has been more talk about creating a margin insurance program for dairy that would protect milk producers from differences between the price of milk and cost of production. NFU called for a premium subsidy to help the smaller farmers pay for such insurance.

Also, areas such as California and Idaho that are not under the federal milk marketing order should be brought back into the program. NFU delegates also remain opposed to forward contracts in the dairy industry as well, citing the vertical integration in poultry and hog operations as reason to avoid forward contracts.

The delegates also oppose including dairy in the Trans-Pacific Partnership negotiations.

NFU delegates rejected a resolution calling for federal standards for poultry production methods for the purpose of harmonizing conflicting state regulations and transitioning toward more humane, enriched colony cages for layer hens. Farmers said that would lead to more regulations and the likelihood of expanding to cover other livestock as well.

Delegates backed a proposal to include in the farm bill a supply management proposal for grains. The Market-Driven Inventory System would create a voluntary reserve on major commodities in which producers would put grain into storage for a fee and an assured payment at 60 percent more than the target price, which would be raised. — Chris Clayton, DTN