Opportunities for Fairness in Farming – Our opportunity to rethink the beef checkoff

November 17, 2023

Gilles Stockton

The OFF Act is getting real traction and has a number of co-sponsors in both the House (HR 1249) and the Senate (S 557). What these bills aim to do is reorganize twenty-two commodity checkoff programs such that USDA has actual authority to oversee how the money is used. The aim is to ensure that the programs are accountable to the farmers and ranchers who pay the checkoff taxes.

It appears that all of the checkoff programs are plagued by allegations that they are not effective or transparent. The big ones such as eggs, beef, wheat, dairy, pork, soybeans, seem to be particularly poorly implemented. They all need fixing, and the OFF Act is our opportunity get this done.

What the OFF Act would do is stop the practice of awarding contracts to organizations that also advocate (lobby) politically. This is clearly needed. Lobbying is lobbying and running promotions to increase the consumption of eggs, beef, pork, or milk is something entirely different. No organization should do both. (It should be noted, however, that universities which contract to do specific research would be exempted from this lobbying rule.)

The main goal of the OFF Act is to make the checkoffs transparent. It is our money and we should have the right to see how it is being spent. I don’t pretend to understand why some of the checkoff programs, like pecans and kiwis, need to be reorganized, but the beef checkoff is the prime example of what went wrong.

The original concept was that the beef checkoff is a voluntary program run by producers for the benefit of the entire industry. As such, USDA has, from its inception, a minimal oversight authority. But in 1996, when the National Cattlemen’s Association absorbed the Federation of Beef Councils, some livestock producers question how the funds were being allocated and spent. Requests for accountability, were ignored which culminated into a petition drive to have a referendum on the future of the checkoff.

Under the law authorizing the beef checkoff, the only way for producers to question and reform the checkoff is for ten percent of all livestock owners to petition USDA. This petition drive gathered more than enough signatures, but USDA disqualified just enough to reject the referendum.

The failure to get a referendum prompted lawsuits on the grounds that generic promotion of beef violated the free speech of producers who were marketing a specific branded product. Ultimately, the Supreme Court ruled that the beef checkoff was in fact “government speech” and that the First Amendment did not apply. In other words, the beef checkoff is a tax.

However, the Beef Promotion and Research Act of 1985, which still controls the beef checkoff, does not allow USDA the authority or resources for proper oversight. Once the Supreme Court determined that in actuality the beef checkoff is a tax under the administration of USDA; USDA in theory should administrate and have complete oversight. They can’t because they have not been given the means.

This in essence is what the lawsuit brought by R-Calf against the Montana Beef Council (MBC) was about. The MBC was collecting and spending tax monies with no government oversight. R-Calf won and now a USDA employee sits in all of the meetings. But USDA is only signing off, they are not exactly running the program and on the national level there is still little accountability.

It is hard to gauge, but most western ranchers probably have mixed feelings about the beef checkoff. I suspect that many would like to have it fixed rather than eliminated. So, we need to ask ourselves, why did it go so wrong and what will it take to fix it?

According to the 2023 proposed budget for the MBC, they have nearly one million dollars ($982,359) to promote the consumption of beef in Montana. Out of that, half (49.4%) goes for salaries, administration, and producer communications. Another $144,000 is sent to Washington DC, most of which goes to the National Cattlemen’s Beef Association (NCBA) to purchase an extra voting seat on the Federation. For what benefit this might be, is not all that clear. Out of that million dollars, only $218,250 (22%) is actually allocated to promote beef within the state of Montana.

That is the situation in Montana which is open about their budget. When it comes to how the checkoff is being spent nationally, it gets very murky. USDA does not release detailed audits and it is not clear that USDA actually does much auditing. The NCBA which commands 66.7% ($25,720,000) of the funds allocated for national beef promotion is also not very forthcoming about how the money is being spent.

Something has gone terribly wrong. Over the past thirty-six years the staff and board of the MBC have done their best. Serving on the MBC board is a thankless task and we should be grateful that some of our neighbors have been willing to take it on. Yet just as clearly, the program has gone off its tracks. The beef checkoff is not even coming close to accomplishing its primary goal of promoting and increasing the consumption of beef which has fallen from 81 to 59 pounds per person from when the checkoff was first collected.

The Off Act is our opportunity to rethink the beef checkoff, but for that to happen, it has to be included in the coming Farm Bill. The House version (HR 1249) has 16 cosponsors (12 Democrats but only 4 Republicans). Unless, more Republicans sign on, Chairman Thompson (R-PA) of the House Ag Committee (202 225-2171) will not let it come to a vote. We need to tell him to include the OFF Act in the farm bill.

It is not all that different on the Senate side where S 557 currently has five cosponsors. However, in the Senate, there is bipartisan support. Senators Lee (R-UT) and Booker (D-NJ) are the main sponsors. Senators Warren (D-MA), Paul (R-KY), and Gillibrand (D-NY) have also signed on. Those who have not are the all-important Chair Debbie Stabenow (D-MI: 202 224-2035) and Ranking Member John Boozman (R-AR: 202 224-2035). They need to hear from every livestock owner. For good measure, Senators Klobuchar (D-MN: 202 224-2551), Grassley (R-IA: 202 224-6020), and Hoeven (R-ND: 202 224-2551) need to hear from you as well.

Gilles Stockton

Grass Range, Mt.