Editorial in Beef Magazine written by Troy Marshall - Response
by USCA Director Danni Beer

Oct 3, 2008 12:09 PM, by Troy Marshall

Outrage over the distorting of the intentions of the mandatory country-of-origin (COOL) law supposedly led Sen. Jon Tester (D-MT) to introduce a bill that would modify the beef-checkoff program. Called the "Beef Checkoff Modernization Act of 2008," the biggest proposed change is it would require at least 30% of checkoff revenues be spent on promoting U.S. beef. This theoretically would be a way to pull U.S.-labeled product into the system and rectify the problems being experienced with mandatory COOL (See "The Chess Game Of Mandatory COOL" elsewhere in this issue).

Of course, the problem with mandatory COOL has always been that it was a red herring; it was just a chess piece in the game between those who felt the changes occurring in the industry represented opportunity and needed to be dealt with proactively, and those who felt these changes represented significant risk and had to be fought. It was about globalization, value-based marketing and a host of other factors simmering between these two segments for quite some time.

So it's not surprising that the checkoff battle has been resurrected with Tester's legislation, which also includes the call for a producer referendum every seven years, and to put in place a battle for checkoff dollars between the competing interests.

Perhaps this is the time when the industry needs to take a step back and put an end to this conflict. Without question, both sides have valid points.

The checkoff program has already taken steps to increase access to bidding for checkoff dollars and there's probably more that can be done. The checkoff is governed by cattlemen, and opinion polls indicate its success in improving beef demand is well understood and supported by the majority of cattlemen. Thus, spending millions of dollars every seven years to validate this is simply a waste of funds.

The checkoff-funding mechanism must be modernized, as well. Inflation has devalued the original impact of the 1986 legislation by at least half the value of each $1 contributed.

It's not hard to trace back the feud, or the common links with Montana and Tester, the Livestock Marketing Association and R-CALF. Mistakes have been made, powerful individuals have been offended. But this industry can no longer afford this feud.

We have challenges, we have opportunities, and we must resolve these personal and industry differences. Certainly there won't always be agreement, but there is value in having a democratic process, and immense value in speaking with one voice; the stakes simply are too high to continue this internal vendetta.

Perhaps we've all been victims of this vendetta in one form or another, but mandatory COOL and this Tester's proposal illustrate that it's vital the industry create its own solutions and not leave it to politicians who don't understand the dynamics involved.

It's time to stop this vicious cycle. It's time for cattlemen to let it be known that the industry comes first, and we're not going to tolerate any more of these games.

Response to Troy Marshall Editorial

By Danni Beer, U.S. Cattlemen's Association Director, Keldron, SD October 10, 2008

Frankly, I was hoping people would embrace Senator Jon Tester's interest in enhancing the beef checkoff instead of feeling threatened by the idea. Troy Marshall is just plain wrong about some things that need to be corrected.

The settlement in the Livestock Marketing Association v. USDA beef checkoff lawsuit called for an independent survey of thousands of cattle producers across the country. The survey was conducted by Gallup, a respected and well-known international firm. http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5058490 Survey findings were not surprising to most of us. An overwhelming number of the 8,000 producers surveyed said that they wanted the Beef Act changed in some very specific ways. Some of the results are addressed in Senator Jon Tester's Beef Checkoff Modernization Act of 2008.

Senator Tester's bill answers producer concerns in many areas. Senator Tester's legislation does not "resurrect the checkoff battle". If legislation addressing the survey results is passed by Congress it will end "the battle". Making the checkoff more transparent and accountable will likely result in more producer support for an increase in the per head assessment. If the Beef Act is not modernized, no one is optimistic about producer support for any increase.

The accusations of the timing of this legislation being a result of distorted intentions are not true. The process was started a couple of years ago by the late Jim Hanna, a well respected and proactive leader in the cattle industry. Jim studied the changes producers asked for and found ways to improve the beef checkoff. He attended the Checkoff Task Force meetings sponsored by the NCBA. He was disappointed with the task force process and felt the results of the exercise lacked the real, needed changes for the program that the Gallup survey suggested were favored by producers. Just months before the onset of his illness in 2008, Jim was working closely with Tester's office on developing the ideas and language in the Beef Checkoff Modernization Act of 2008. The industry lost a great leader when Jim passed away, but his work lives on through the possibility of checkoff enhancements being implemented.

Marshall writes that the checkoff program has "already taken steps to increase access to bidding for checkoff dollars". However, at the most recent Cattlemen's Beef Board meeting, the budget for the American Cattlewomen's Authorization Request (AR) to hold the National Beef Cook-Off was reduced by $225,000 and the National Beef Ambassador Program was cut altogether. The National Livestock Producers Association's (NLPA) subcontract with the CBB to provide the Beefmobile was eliminated resulting in NLPA being terminated as a checkoff contractor altogether. That leaves the National Cattlemen's Beef Association (NCBA) as the winning bidder of more than 90% of CBB allocated dollars. The 1985-enacted Beef Act language precludes any organization established after 1986 from competing for checkoff contracts. It's time to change that because there are other organizations that could and should be contracting for checkoff funded work. Increased competition for checkoff contracts will only improve the services provided, which will benefit those who pay the bills.

Whether producers like NCBA or not, many feel that a policy organization should not be so closely linked to a mandated producer-funded assessment program. Among other suggestions, the U.S. Cattlemen's Association has suggested that the CBB have the ability to contract directly with the companies doing the work so there is more efficiency and no conflict of interest.

Holding a referendum on the checkoff will hold CBB decision makers accountable. That same referendum could be used for cattlemen to vote on enhancements to the checkoff, such as an increase in the assessment. It is not a waste of funds to provide a democratic voice for those who foot the bills.

I do agree with Mr. Marshall about one thing. COOL does relate to globalization and value-based marketing. If the U.S. beef industry wants to remain competitive we had better begin with the largest beef market in the world - the United States of America - and we better start working together to accomplish that competitive edge.

Marshall attempts to reduce these public debates about improving the checkoff to a "feud" or an "internal vendetta". I believe the legislation brought forth was an attempt to enhance the program by advancing ignored ideas and to promote our product - U.S. beef - not to start a feud, rather, it's just good business.

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