Some Iowa beef producers want more input in checkoff spending

Checkoff money is spent on research, communication, marketing and promotions

Erin Jordan
Published: January 23 2014 | 3:30 am - Updated: 29 March 2014 | 2:31 am in

Some Iowa beef producers say a program that takes $1 from each head of cattle they sell should be voluntary so they can yank contributions if they don’t like how the money is being spent.

At issue are tens of millions of dollars in Beef Checkoff money paid each year to the National Cattlemen’s Beef Association, a trade association that has lobbied against some programs supported by small-scale beef producers.

“The Farmers Union wants to make sure the checkoff is used to benefit family farmers,” said Marvin Shirley, 76, who raises cattle with his son-in-law near Minburn.

Shirley took a break between feeding the herd and helping the veterinarian determine which heifers are pregnant. Raising cattle is an expensive business, especially in ice-cold winters such as this one, in which animals need more food to stay warm.

When Shirley sells his cattle, $1 from the sale of each cow will go the Iowa Beef Industry Council. That group splits the money with the national Cattlemen’s Beef Board (CBB), created in 1985 to administer the national Beef Checkoff.

Uses of checkoff money

Checkoff money is spent on research, communication, marketing and promotions that include the campaign “Beef. It’s What’s For Dinner.” The funds can’t be used to influence government action or policy.

A 2012 industry-funded survey showed 75 percent of 900 producers approved of the checkoff.

National checkoff revenue fluctuated between $44 million and $50 million from 1991 to 2008, but has declined since. The CBB collected $39.7 million in 2013, the first year in two decades the checkoff fell below $40 million.

The bulk of checkoff funds in recent years has gone to the National Cattlemen’s Beef Association (NCBA), a Denver, Colo.-based not-for-profit that tries to grow consumer demand for beef and increase profit for producers.

The $36 million in checkoff contracts the NCBA was awarded in fiscal 2012 made up 60 percent of the organization’s revenue that year.

Lobbying is part of the NCBA’s mission. The group’s website says the NCBA “works to advance the economic, political and social interests of the U.S. cattle business and to be an advocate for the cattle industry’s policy positions and economic interests.”

The NCBA lobbied against country-of-origin labeling, a 2009 requirement that meat packers label meat with where cattle were born. The organization and other opponents argued in a lawsuit filed last summer that revisions to the labeling plan would hurt trade relations with Mexico and Canada.

“The market should determine labeling, not government,” the NCBA website says.

But farmers such as Shirley want country-of-origin labeling because they believe consumers prefer buying meat raised in the United States. Shirley said the NCBA is speaking on behalf of large packing plants, not family farmers.

But NCBA leaders said they do not use checkoff funds for lobbying. Employees must track their time to specific projects to make sure they aren’t billing the CBB for activities not allowed under the checkoff law, said Kendal Frazier, the NCBA’s chief operating officer.

“To misuse checkoff dollars is a felony,” he said. “I don’t know of any NCBA staff members who are interested in going to jail.”

Audits mixed

The CBB ordered an independent audit of the Beef Checkoff in 2010. That audit, narrow in scope, found some misuse of checkoff funds by the NCBA.

The group was required to return $216,000.

Another audit, this one by the USDA’s Office of Inspector General, last March determined that checkoff funds were collected, distributed and spent properly. The audit did recommend better oversight of the checkoff by the Agriculture Marketing Service.

A national group of producers who disagree with the NCBA has requested public documents that were used to create the recent OIG report.

Kent Pruismann, a feed lot operator in Rock Valley, wanted to join the CBB because he, too, had concerns about how checkoff money was being spent. U.S. Secretary of Agriculture Tom Vilsack appointed Pruismann to his second three-year term in December.

“My concern was that the firewall had been breached,” he said, referring to checkoff money being used to finance lobbying efforts.

However, as Pruismann learned more about the CBB and read the most recent audit, he was convinced checkoff money was being spent properly by contractors such as NCBA.

“I understand there is angst among some beef producers and the NCBA,” he said. “But unfortunately that angst is being exhibited through the CBB.”

Changes to checkoff

Jana Linderman, president of the Iowa Farmers Union, said beef producers should have the ability to withhold their checkoff contribution if they don’t agree with how the money is being spent. The group also wants producers to vote directly on board members.

“There’s no recourse for producers,” said Linderman, of Cedar Rapids.

Pruismann also wants to change the checkoff — he wants to raise it. The state has been locked into $1 for 28 years.

With inflation and declining herd numbers, the money doesn’t go far enough, he said.

“When we have this bickering going on, it doesn’t help our cause,” he said.

Changing the checkoff would require approval from Congress, and many in the industry are reluctant to open up the possiblity for fear of additional regulations, said Nancy Degner, executive director of the Iowa Beef Industry Council.

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