Cattle Today

Cattle Today

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by: Wes Ishmael

Democracy is a beautiful thing, but it's not necessarily pretty.

Witness the Supreme Court's decision to overturn a U.S. Court of Appeals ruling that had found the federal Beef Promotion and Research Act (the beef checkoff) in violation of the First Amendment.

The checkoff challenge that led to the Supreme Court decision began in 1998 when the Livestock Marketing Association (LMA) began a petition drive to force a new referendum.

Well, actually it began with LMA's threat to petition for a referendum in 1996 when members of the National Cattlemen's Association and the National Livestock and Meat Board approved merging the two organizations, a merger that LMA opposed.

Depending on whom you talk to, that wasn't even the first step. Folks in this camp claim it really all began in 1992 when LMA opposed the National Cattlemen's Beef Association (NCBA) request to use checkoff dollars to fund a study on strategic alliances within the industry. Based on LMA's opposition, the Cattlemen's Beef Promotion and Research Board did not fund the request.

However it began, and for whatever the reasons, the mystery to most producers is why LMA claimed a desire to give producers a vote on whether or not they wanted to retain the checkoff, when every independent study conducted since the program began in 1987 indicated that the vast majority of beef producers continued to support the checkoff.

That mystery remains. Following the Supreme Court announcement, Randy Patterson, LMA president, issued a statement expressing the organization's disappointment in the ruling. "We started the fight wanting to give producers the right, through a referendum, to say whether they wanted to continue to support the beef checkoff. We remain committed to that idea and hope that the Cattlemen's Beef Board, and other industry organizations will join together, to seek a change in commodity promotion laws that will allow periodic referendums on these programs," said Patterson.

Besides the ongoing majority support expressed by producers in independent studies, the LMA couldn't muster enough valid petition signatures to force a referendum. So, both the ongoing producer support for the checkoff and the lack of producer support for repeating a referendum for a program they continued to desire would indicate to most folks there was no basis for the resources squandered to address a pointless argument.

In Patterson's same statement, he explained, "LMA has always supported promotion of U.S. beef, and research. That has not changed with this decision, and we will work to assure that the beef checkoff reflects the best of what the cattle industry, including America's livestock markets, have to give."

Huh? The organization is against the checkoff as it exists, yet supports it?

Perhaps another of Patterson's statements is the most telling: "LMA started this effort to give America's producers greater say over how their checkoff dollars would be spent, and by whom. We hope that message will not be lost with the U.S. Department of Agriculture, the Cattlemen's Beef Board and other beef industry leaders. We hope they try and become more inclusive of differing views, and make sure that producers large and small, and from every sector, have a greater voice in checkoff affairs (more later)."

For whatever reason, LMA and the National Cattlemen's Beef Association (NCBA) got crossways over something back when. Since NCBA is one of the primary contractors for programs funded by checkoff dollars, arguably, LMA attacked the checkoff in order to attack NCBA.

Before the dissenters in the crowd write off this and what follows as a livestock market bashing: Livestock markets are an essential and integral part of the cattle business. Not only do they allow folks to market their wares in a competitive atmosphere, often times the local market-more specifically, the local livestock market operator-are able and trusted allies in much more than marketing, also helping with selection and management decisions, disseminating industry information, and the list goes on.

Nor, is this and what follows a love-fest for NCBA. Like most organizations with any history, they do plenty right, but they can also make you madder than a badger with a toothache.

This is about an organization representing livestock market operators that, again arguably, has a bone to pick with a organization that the Beef Promotion and Research Board uses as a contractor. Incidentally, NCBA is one of only a handful of eligible contracting organizations that have ever applied to contract beef board projects.

The Potential Destruction

"I am extremely pleased that the U.S. Supreme Court overturned the lower courts' decisions and ruled in favor of the beef checkoff program," says Agriculture Secretary Mike Johanns. "This is certainly a win for the many producers who recognize the power of pooled resources. As this administration has always contended, USDA regards such programs, when properly administered, as effective tools for market enhancement."

"We believe this is a victory for all cattlemen in the U.S.," explains Al Svajgr, Beef Board Chairman, who is also a producer from Cozad, Nebraska. "Now it is more critical than ever that we come together as an industry to support the checkoff's educational, research and promotional programs aimed at increasing demand for beef at America's dining tables. We would call on the LMA and WORC to join us in these efforts, with an eye toward increasing long-term profitability for all segments of our industry."

Likewise, Myron Williams, emphasizes, "It's clear that a majority of cattlemen and agricultural groups recognize that checkoff programs are good for local beef industries and economies. Cattle-Fax estimates that the beef demand gain in just the past seven years has added about $250 per head to the value of fed cattle and $200 per head to the value of calves. Consumers are willing to pay more for the high-quality beef we are producing." Williams is a cattleman from Wall, South Dakota, who serves as chairman of NCBA's Federation of State Beef Councils Division.

Indeed, majority ruled and the checkoff continues, but LMA's damaging illogic should not be forgotten by the industry.

Do you realize what the checkoff-every producer who has ever contributed to the checkoff-has been able to accomplish?

•The Beef Demand Index-a measure to true consumer beef demand-has increased 25 percent since 1998.

•Increased demand since 1998 has added approximately $22/cwt. to the price of fed cattle, according to Cattle-Fax.

•More than 2,100 new beef products were introduced at retail since 1998.

•Since the checkoff-funded Beef Value Cuts research and promotion program began in 1996-think flatiron steaks and whatnot-the value of the Chuck and Round have increased 60 percent and 32 percent, respectively. That following a decline in Chuck and Round Values of 24 percent and 25 percent, respectively between 1988 and 1993.

•Checkoff-funded foodservice advertising has generating $68 of advertising from food service partners for every checkoff dollar invested between 2001 and 2004.

And that's just the tip of the iceberg. Bottom line, according to an econometric model used to assess the economic impact of checkoff dollars last year, every dollar invested by producers has yielded $5 back to the industry.

Yet, LMA was apparently willing for the industry to forgo such leverage.

Patterson said LMA hoped USDA and the Beef Board would become more inclusive and give producers more say. Well, the beef board is comprised of 108 producers from 40 states (42 if you include the importer section), representing 11 production sectors-no packers on the board-with the cow-calf sector having far and away the most representation, followed by feeders and stockers. The Secretary of Agriculture appoints these producer board members, but appointments are made from a pool of nominations submitted by producers. Any board members I've ever talked with have been more than open. Whether or not the board ends up collectively doing what an individual producer hopes is not a reflection of closed doors and ears. It's democracy at work, meaning that all have a say, but the majority will decide. That's the first rule you accept of participating in a democracy if you also are willing to reap its rewards.

Of course, LMA is the same organization that last February called for the Canadian border to remain closed until, among other things, Country of Origin Labeling (COOL) was fully implemented and trade with Japan, South Korea and Mexico had resumed. Yes, it does seem ironic that an organization representing businesses founded on competitive trade would seek to limit it.

(The information in this article is the opinion of Huntin' Daylight's Wes Ismael and does not neccessarily reflect the views of this newspaper)


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