December 4, 2007

 

US beef producers call for new beef checkoff rate

 

 

Beef checkoff needs US$1.90 today to buy what US$1 did in 1985.

 

That's what beef cattle producers have decided during the annual business meeting of the Texas Cattle Feeders Association, stating that the beef checkoff doesn't have the buying power it once did, which may well be to the detriment of the beef industry not only in the domestic markets but internationally as well.

 

According to National Cattlemen's Beef Association (NCBA) president John Queen, the checkoff, established at US$1 per head in all cattle selling transactions in 1985, is worth about 10 cents today due to inflation -- or it takes US$1.90 in checkoff funds to acquire now what US$1.00 bought in 1985, he said.

 

The checkoff was established in the 1985 farm bill, and checkoff funds are managed by the National Beef Promotion & Research Board for broader beef advertising and promotion, consumer information, industry research and producer education.

 

A beef/dairy industry-wide coalition recommended US$2- checkoff per head but Queen said NCBA won't make a decision until given policy instructions by its affiliates and members of its board of directors. The decision will be revealed on board's annual business meeting in February.

 

Queen, a cow/calf producer from North Carolina, asked the cattle feeders if they could run their feedlots, ranches or other businesses today on the same budget they had in 1985, and he said he wasn't surprised when no one raised a hand, because such a budget would be outdated.

 

Producers should also consider how little the checkoff is actually costing them, Queen said, noting that the current dollar accounts for 0.1 to 0.7 percent of the revenues they receive for their calves, feeder cattle or fed cattle.

 

For this "small investment," he said, producers are receiving "aggressive and award-winning" marketing efforts across the US and the world and new product development that has increased the number of beef items on restaurant menus and in retail meat cases, "adding significant carcass value to every animal you sell."

 

Indeed, checkoff-funded initiatives since 1998 have increased beef demand 15 percent and cattle prices US$200 per head, he said.

 

However, current checkoff resources are insufficient to continue this progress, Queen said, especially going up against competitors in foreign markets, where Australia's beef checkoff equals US$4.22 in and Canada's budget for international beef promotion is four times that of the Beef Board's.

 

The beef/dairy industry group also recommended that the number of industry organizations that can become checkoff contractors be increased and that there be opportunities for periodic continuation referenda on the programme. These changes and an increase in the amount of the checkoff would require congressional approval, a process that could begin next year.