Ag Policy Blog

Vilsack Addresses Checkoff Controversy

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Agriculture Secretary Tom Vilsack said Thursday that USDA could soon start the process to create a new beef checkoff which could be in place by 2016. However, he's willing to pull the plug on those plans if the beef industry could reach some consensus on changes to the current checkoff.

The National Cattlemen's Beef Association and its 45 state affiliates are pushing Vilsack to stop any efforts to use the 1996 generic checkoff law to increase the $1 per-head fee to potentially $2. Under Vilsack's plan, the new $1 fee would promote beef programs and research in a separate structure than the 1985 law that NCBA prefers but other agricultural and cattle organizations oppose.

Vilsack, speaking at a press conference Thursday at the World Food Prize Borlaug Symposium in Des Moines, emphasized that producer groups are divided about how the checkoff program is operated and groups can't seem to reach agreement on ways to increase the checkoff fee.

"For three years, I emphasize, for three years, folks have been conversing and discussing the concerns they have about the current beef checkoff program," Vilsack said. "For the same period of time for three years, I have been told as a secretary that there is a need for additional money for marketing and research for the beef industry."

Vilsack said there is enormous export opportunity for beef with the growing middle class around the world. There also is a need to continue as a beef industry to compete with other protein sources domestically.

"The groups have been meeting for three years and have been unable to reach consensus on modifications to the existing beef checkoff program that would create a way to increase the checkoff.

"Because there is not a consensus, the industry is not getting the benefit of additional market research dollars," Vilsack said.

Under the 1996 generic law for commodity checkoffs, Vilsack has the right to create a checkoff program and solicit information from producers on how to structure such a checkoff.

"By using that right and that power, I can encourage more money coming into the system," Vilsack said.

He noted it would take time to set up a new checkoff because there would have to be a notice posted in the Federal Register to solicit comments on it. Then a checkoff would be created and a regulatory process begins.

"I would anticipate and expect sometime in the latter part of 2015 we would be in a position to begin operating the checkoff, certainly in the first of 2016," he said.

Vilsack added, "If at some point in time the industry can reach the consensus that has alluded them for three years, I would be more than happy to see that be the outcome. But that doesn't seem to be the intent right now."

Absent his actions, the secretary said the beef industry is at a stalemate on getting additional money into the system. "It seems crazy to me that we would allow that to happen. It may well be that new ideas come forward. I understand a lot of beef producers like the checkoff, but a lot of beef producers don't like the current checkoff. So what's the harm of creating an additional opportunity to get tens of millions of dollars of additional marketing money and additional research money into the system when everybody in the system recognizes the need for more money. So I'm just trying to respond to what everybody has agreed to. And I'm more than happy to stop the process if folks can come to agreement, but they have spent three years doing that and they have not been able to do it.

"And I think I've waited and been pretty patient."

NCBA and 45 state affiliates wrote Vilsack on Tuesday asking him to not to move ahead with an alternative checkoff program. The group cited its 45 affiliates represent 170,000 beef producers nationally. A petition to the White House has been created, "Don't Hijack the Beef Checkoff" that seeks to get 100,000 signatures by Nov. 12. As of Thursday afternoon, the petition had fewer than 250 signatures.

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Bonnie Dukowitz
10/16/2014 | 9:17 PM CDT
If those at the helm can not agree on a buck, will 2 bucks not double the trouble?