Ohio checkoff increase falls flat

Oct 26, 2012

In late September, Ohio cattlemen voted on whether or not to increase the state’s checkoff fee from $1 to $2. The results of that vote were compiled and released Oct. 18; the referendum did not pass on a close margin.

Of the 674 votes, 47 percent were in favor of the increase and 53 percent were against it. Reportedly, the 53 percent no vote represented 49 percent of the marketed cattle in the state while the 47 percent yea vote represented 51 percent of the state’s cattle.

“It is disheartening to learn the referendum did not pass,” Sam Sutherly, Ohio Cattlemen’s Association (OCA) president, told the Ohio County Journal. “The Ohio Beef Council has an outstanding history of leveraging Ohio beef producers’ checkoff dollars to the fullest extent to promote our product to Ohio’s 11.5 million consumers. These results indicate there is more work to do to effectively communicate how existing checkoff funds are used to increase beef demand.

“I would like to thank OCA members and all beef producers who turned out in support of the increase. In doing so, you’ve proven your care and concern for the future of our industry and understand the need to increase our beef promotion efforts.”

Not everyone thought the move was disheartening. Darol Dickinson, director of R-CALF, called the Ohio vote and the similar California referendum voted down in August “votes of no confidence.”

“The results of these two referendums demonstrate that independent cattle producers are not convinced that they will receive a dollar-for-dollar return should their current assessment be increased.”

R-CALF worked in concert with affiliate Buckeye Quality Beef Association to get ballots out to producers prior to the vote.

“Most of the cattle producers I talked to were completely unaware that a referendum was taking place,” said Dave Hutchins, a director of Buckeye Quality Beef Association.

“They were all thankful that I brought them a ballot but this clearly shows there was very little transparency in the Ohio Beef Council’s attempt to raise our checkoff assessments.”

R-CALF, in partnership with the Humane Society of the United States, is currently embroiled in a lawsuit against the National Cattlemen’s Beef Association, accusing the checkoff contractor with misuse of funds.

The vote

Anyone who had sold a beef animal subject to the checkoff in the year prior to the late September vote was entitled to participate. This included children under usual voting age who sold an FFA or 4H steer, to anyone who brought cattle into Ohio to sell them. Each person was entitled to vote once and numerous voting places were available, including absentee ballots.

The referendum was motivated by two primary facts of today’s market: the size of the beef herd and inflation. The current beef herd is at its lowest point in 60 years, meaning there are far fewer cattle changing hands. Since the Beef Checkoff Program derives its income by collecting $1 on every head of cattle every time it changes hands, fewer cattle mean fewer transactions, and fewer transactions mean less funding for checkoff programs.

The issue of inflation is another problem which spurred the referendum. Due to inflation over the recent decades, the current dollar is only worth 47 cents compared to the buying power of the 1985 dollar. Because of both of these issues, the Beef Checkoff Program claims it no longer has the funding necessary to promote beef and combat the attacks of animal rights activists. The act which brought the checkoff into existence and made the per head collection mandatory specifically prohibits the use of checkoff funds for lobbying. Legislative efforts have, of course, become a favored tactic of animal rights groups against livestock interests.

The Beef Checkoff Program funds are used in a number of ways to benefit the beef industry as a whole. From broad-based marketing programs aimed at improving public demand to research and innovation, the checkoff funds benefit the industry and its participants.

Fifty percent of checkoff dollars gathered in any given state goes to fund international campaigns and initiatives. The other 50 percent goes to that state’s specific checkoff program to directly target that state’s audience and promote the state’s beef.

According to OCA, even had the Ohio checkoff increased to $2 a head, Ohio still would have been the smallest checkoff program in the state. Both the pork and lamb industries have checkoff-type programs which charge more for their programs relative to the value of their products than does beef. It is estimated the current Ohio checkoff program brings in roughly $300,000.

Ohio is not the first state to consider an increase in the state checkoff fee. Eight states have already passed checkoff increases, and several other states are considering seeking an increase, including Kentucky. As mentioned, California recently considered a checkoff increase but it also failed to reach the required majority of votes to pass. — Kerry Halladay, WLJ Editor