Dec 09 2014 December 9, 2014 December 9, 2014 NoComment by Mike Callicrate

Reminder: Comments on USDA’s New Checkoff Proposal due tomorrow Dec. 10

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To: R-CALF USA Members and Affiliates

From: Joe Pongratz, Checkoff Committee Chair

Date: December 9, 2014

Subject: Reminder: Comments on USDA’s New Checkoff Proposal due tomorrow Dec. 10

Background: Since the 2010 confirmation by an independent accounting firm that the National Cattlemen’s Beef Association (NCBA) had breached the financial firewall that was supposed to protect producer Beef Checkoff Program dollars from abuse, R-CALF USA has been both persistent and extremely aggressive in calling on the Secretary of Agriculture to take immediate steps to suspend all contracts between the NCBA and the Beef Checkoff Program and to prohibit any policy-oriented organization from receiving any checkoff funds.

We were ignored. But that didn’t stop us from continually providing evidence that the national Beef Checkoff Program was rife with corruption, abuse and conflicts of interest. We were still ignored.

Then, recently, R-CALF USA publicly disclosed that the Secretary’s hand-picked checkoff working group was proposing to double the checkoff assessment. This caused the proverbial bull manure to hit the fan.

The Secretary’s working group quickly disbanded, R-CALF USA members voted for a resolution to end the current national Beef Checkoff Program because it had become too corrupted to fix, and the Secretary proposed to establish an entirely new beef checkoff program which would entail having two checkoff programs running simultaneously until one or the other was voted down in a referendum.

This seemingly crazy plan is not without precedent. The national Honey Checkoff Program was first established in 1987. But honey producers complained it was being mismanaged. In 2008, USDA responded to producer concerns by establishing a new national Honey Checkoff Program under the 1996 Generic Checkoff Act. Honey Producers then voted in a referendum to keep the new program and the old program was terminated.

The Secretary appears to be applying the Honey Checkoff model to the Beef Checkoff Program.

Action: We have until December 10, 2014 to provide comments on the Secretary’s proposal. R-CALF USA is preparing comments right now but we are urging all our members to submit individual comments as well.

To submit your comments, go to: http://www.regulations.gov/#!documentDetail;D=AMS-LPS-14-0081-0001 and click on the blue box in the 2:00 o’clock position near the top of the page that states: "Comment Now!"

For your information, below are some of the highlights that will be included in R-CALF USA’s comments and you may want to bring some of them up as well.

Any new beef checkoff program:

  1. Must require the termination of the existing program before it is started.
  2. Must strictly prohibit any lobbying group and its subsidiaries from receiving any checkoff funds.
  3. Must require the board to contract directly with service providers that will conduct research and promotion, but not with any lobbying group.
  4. Should not increase producer assessments above the $1 per head they already pay unless two thirds of producers agree to increase the rate in a national referendum.
  5. Must enforce a prohibition against conflicts of interest in contracting and in all decision making.
  6. Board members should be elected by producers, not appointed by the Secretary.

Other thoughts:

  1. The facts show that the rate of checkoff collections in brand-law states where brand inspectors are required to collect the checkoff fee on all country sales is much higher than in non-brand states where collection is based on the honor system. This tells us that when given a choice under the honor system, U.S. producers choose not to pay the checkoff. This contradicts claims that there is overwhelming support for the current checkoff and that producers want to pay more.
  2. The current Beef Checkoff Program has been operating for 29 years and generates about $80 million per year, for a total cost of $2.3 billion. During those past 29 years, per capita beef consumption fell over 25 pounds, from just over 79 pounds per person in 1985 to just over 54 pounds today. But, per capita consumption of poultry increased over 45 pounds per person during that same time period and the poultry industry does not have a checkoff program. This shows that the current national Beef Checkoff Program has not been effective at encouraging more consumption of beef.
  3. The checkoff funded study that claims an $11.20 return for every dollar invested does not square with the nearly 1/3 drop in per capita consumption of beef. The higher prices that producers are now realizing are a direct result of cattle numbers that are the lowest in 70 years and a steadily increasing U.S. population.

Your comments are extremely important, even if all you say is that you are dissatisfied with the current program.

To submit your comments, go to: http://www.regulations.gov/#!documentDetail;D=AMS-LPS-14-0081-0001 and click on the blue box in the 2:00 o’clock position near the top of the page that states: "Comment Now!"

Thanks for your help!