Now That´s A Checkoff

Now That’s A Checkoff
— by Lee Pitts

Because it has become a litmus test for its diehard supporters, I am often asked to clarify my position on the beef checkoff. It seems you are either friend or foe; you are either in the fraternity or you are not. But I didn´t quit their club . . . they quit me.

Before the vote on the third attempt to pass a beef checkoff I wrote in this very newspaper that I was going to vote yes, albeit with some reservations. My primary concern was that so much money would be raised that someone would try to get their grubby hands on it who had no business doing so. After the checkoff became law I paid it like everyone else and waited to see results. Occasionally when I saw something I didn´t like I said so. Then one day after having a very memorable lunch with All-Star pitcher Nolan Ryan, and his lovely wife, I suggested in print that he would be a great television and print spokesman for beef. Nolan told me, and I know he meant it, that he would have pitched beef for free. When I suggested to the Beef Board that Nolan would be a great spokes-man I was told to, more or less, mind my own business and leave beef promotion to the professionals. I was also told that Nolan would not be an adequate spokesman to reach our “target audience.”

In the year after my suggestion was rejected Nolan pitched another no-hitter and was on the cover of every major newspaper in the country. A little later he was hired as a pitchman for Advil (I guess he hit their target audience). Later he was voted into the Hall of Fame with one of the largest vote totals ever and again his face was seen on TV and newspapers all over the place. He is truly an American treasure . . . and a real cowboy to boot.

After that I was a little more vigorous in my criticism of the Beef Board. I did not understand how Cybill Shepard, James Garner and that vegetarian model, (what was her name again?) could be good spokesmen but not one of our own who had no dirty laundry in his closet, was a real rancher and wanted to help the beef business any way he could.

Even though I continued to criticize the Beef Board I always felt, and still do, that the state beef boards do a good job for the most part. I also think the checkoff played a role in stopping the slide in beef consumption. But when the Beef Board merged with the old NCA I could envision my initial concerns coming true. I questioned at the time if such a move was even legal or constitutional. I feel, and will to the day I hang up my pen, that the NCBA stole the beef checkoff and both it and the Beef Board will be punished for having done so. Sometime within the next two years, I think. When that happens let it be said that Lee Pitts did not kill the checkoff . . . it will have died from self- inflicted wounds.

When given the chance I tell state beef boards these days that if they were smart, instead of fighting the inevitable and possibly alienating some supporters, they ought to be thinking of the next step. But oh no, it seems they are quite willing to go down with the ship. What a shame.

As long as the NCBA is the primary contractor for checkoff funds I believe the money will be used to help the packer and retailer, while turning the rancher into nothing more than a contract producer. Even if they are helping promote beef and increasing its value, none of that extra money will trickle down to the people who pay the bill as long as we have the current industry structure. And the worst part is the packer isn´t required to pay the buck a head . . . yet they and the retailers are receiving the benefit.

In other words, we are currently buying the bullets for them to shoot us with. We have been giving money to people who oppose all efforts to make our markets function more competitively. We´ve been checking-off, thinking we were solving our problems, at the same time concentration and captive supplies were destroying the foundation of our free market system. Packer and retail margins were steadily increasing to record levels while the rancher´s share of the beef dollar was decreasing dramatically. With the left hand university professors were handing over studies that claimed we all loved the checkoff, at the same time they were accepting beef bucks with the right hand. Beef Board sitters were traipsing around the country, at your expense, to paint anyone who didn´t see things their way as enemies of the beef industry.

Let there be no mistake, yes, I am for a beef checkoff . . . but not this one as it is currently being implemented! We never voted for this current version, did we? Had the current structure been what we initially voted on it NEVER would have passed.

The Organization For Competitive Markets

It´s about time someone came up with a better idea.

A few years ago I got a call from a man named Fred Stokes from Mississippi. At the time I got a lot of calls like Fred´s: ranchers who were fed up, people who were smart enough to see the way our industry was headed and wanted to stop it. Fred wanted to form an organization to do something about it. I remember thinking to myself at the time, after a few setbacks he´d grow tired and give up. But Fred didn´t.

Fred was soon joined by people I respected. Men like Clay Daulton, a longtime NCA leader who saw the folly of the merger a long time before it happened and wasn´t afraid to give up his membership in the “good old boys club” in order to do the right thing. It wasn´t long before their group, The Organization for Competitive Markets was making noise. Loud noise. Instead of just complaining about the lack of competition in markets OCM turned captive supplies into a front page issue. Through their good work, and that of R-CALF´s, for the first time ever a Competition Title was proposed for the Farm Bill. It was the first time in history that competition has been addressed in the Farm Bill. Due to the efforts of many supporters, some elements of that bill passed — but not enough.

Today OCM is a nonprofit, charitable group dedicated to reclaiming competitive markets for farmers and ranchers. OCM engages in research, education and advocates changes in state and national policy to promote a market environment that provides opportunity, competition and fairness to independent producers. Members include farmers, ranchers, professors, state legislators, rural leaders and business persons. Only individuals may be members, not corporations or associations.

Early on the OCM attracted the attention of college professors who could see that some of their cohorts traded their support for checkoff research dollars. They didn´t like the way some professors were selling out, but they had no forum. OCM provided that soapbox and now we have studies of our own, written by respected professors to combat those written by the packer´s professors. OCM has developed a network of academic experts, attorneys and rural leaders that work for solutions to our problems. OCM, its staff and collaborators, write issue papers and scholarly articles which have been published in book form, in the media, and in professional journals. OCM has become a force to be reckoned in an amazingly short period of time for one simple reason: they have focused all their attention on competition in the marketplace at a time in our nation´s history when a lack of it is crippling many of our major industries.

A Real Steer-ing Committee

Recently OCM came up with an idea that, this observer feels, has the potential to cure many of our current ailments. OCM´s idea is a checkoff of sorts, but before you nonbelievers quit reading, please know that this is a checkoff that is built the way one should be. OCM´s idea is called the The Cattlemen´s Competitive Market Project (CCMP). What OCM is doing is signing up auction markets and feedlots on yearly contracts to work with their consignors and feeders in collecting a VOLUNTARY assessment of 30 cents, 50 cents or $1 per head. The rancher can participate at any of the three levels or not at all. Auction yards are entitled to receive five percent of the CCMP funds to defray the costs of collection and remittance, but this reporter would hope that they remit 100 percent of the funds collected like they do now with our current checkoff. And I think they will.

The money would be sent to OCM to be used for education, communication, research and policy advocacy on market competition issues relating to concentration, captive supplies and retail supermarket power. The group is currently developing a “Rapid Response Network” of individuals and organizations throughout the nation to respond to crisis and opportunity in support of state and federal policy change.

OCM, as administrator of the project, is a nonprofit, charitable organization under section 501(c)(3) of the Internal Revenue Code. Contributions to CCMP will be tax deductible because OCM is a nonprofit, charitable organization. Annual audits will be conducted and will be subject to disclosure to all contributors.

The CCMP is not a mandatory checkoff program nor is it controlled and run by the USDA, as the NCBA claims the beef checkoff is in recent checkoff court cases. Also unlike the current beef checkoff, it is entirely legal for the CCMP money to be used to lobby Congress, in a limited manner, and to actively engage in the war in Washington in lobbying on behalf of more open markets. Here´s the best part: If the CCMP does not perform like you´d hope or they do something you don´t like, just don´t send them any more money. I believe that´s called “accountability” and it´s something our current beef checkoff lacks.

The CCMP will be guided by a Steering Committee that knows a thing or two about steers: feeders, ranchers and auction market operators, all of whom derive a majority of their income from the cattle business. It will be administered by OCM. The CCMP Steering Committee includes Tom Spencer, Circle T Cattle Company, Pueblo, CO; Brett Gottsch, Gottsch Feeding Corp., Elkhorn, NE; Randy Stevenson, Double S Livestock, Wheatland, WY; Korley Sears, Ainsworth Feedyards, Ainsworth, NE; and Jerry Adamson, cattleman, Valentine, NE.

Challenging The Status Quo

According to Adamson, CCMP will bring together the brightest minds and the best ideas to solve the issues of reduced competition and market fairness. “Those who so adamantly oppose competition and the enforcement of antitrust laws have full time staff, legions of attorneys and researchers working day in and day out to protect their interests,” says Adamson. “The USDA has FAILED to protect competition claiming that doing so will harm meat packer efficiency. Cattlemen´s interests are virtually lost in an orchestrated attack, whether that´s from the well-heeled American Meat Institute, the Food Marketing Institute or misguided producer organizations. CCMP has been established with a singular purpose in mind . . . to win the ongoing war against competition, giving grassroots producers an effective voice.”

Brett Gottsch says a CCMP Research Advisory Committee has also been established, that will function in tandem with the Steering Committee to help identify research needs, oversee research projects, provide for data analysis and engage in writing and presentation of white papers. The Research Advisory Committee includes Dr. Neil Harl, Agricultural Law, Iowa State University; Dr. Ron Cotteril, Agricultural Economics, University of Connecticut; Dr. Roger McEowen, Agricultural Law, Kansas State University; and Dr. Peter Carstensen, Antitrust Law, University of Wisconsin. “These individuals represent some of the finest minds in academia today,” says Gottsch. “They´ve been asked to serve in a capacity that will provide the intellectual and analytical horsepower cattlemen need to make their economic and policy cases.”

“In the past, we have given money to those who claimed to be strong advocates of our interests, only to find that they opposed our efforts to make our markets function competitively and fairly, ” says Korley Sears, Ainsworth Feedyards, Ainsworth, NE. “We cannot make that mistake again. CCMP will be fully accountable and those who pay the bills will be in control. Those of us who have already signed on with the project have made accountability and effectiveness our primary goal.”

Because this initiative challenges the status quo there may be retaliatory measures taken. Remember when an attempt was made to coerce auctions to forsake the LMA over the LMA´s petition for a vote on the checkoff? That effort largely failed and any such effort this time probably will too. If retaliation is experienced, OCM has a project entitled the Competitive Markets Litigation Project that is a network of attorneys that is able to help fight for the producers that have been harmed economically. In other words, next time someone tries blackmail or legally questionable tactics they face the prospect of being slapped with a lawsuit. The feedlots that are already participating in the program report nothing but praise from their customers for standing up for free and open markets. They have neither experienced any loss of customers, nor have they experienced retaliation or boycotts by meat packers.

A Call To Arms

I first learned of this project from a longtime friend and a man I have a great deal of respect for, Steering Committee member Tom Spencer. Tom is definitely one of the good guys. He brings a lot of credibility to the project because for many years he was a staunch and extremely active NCA member. With reluctance, he stayed with the NCBA until it got so bad he could no longer stand it. He has been brave and vocal in telling it like it is. Spencer says he´s thrilled at the opportunities CCMP presents. “Finally, cattlemen have the chance to get behind a program that will be responsive to their interests and one that will, in turn, be responsible to them. I´ve chosen to support this program because I believe in it and I intend to do everything in my power to see it succeed.”

And let´s hope it does. After all, this is what a real checkoff ought to look like. Michael Stumo, attorney for the OCM, says this initiative is “a call to arms.” If you´d like to answer the call and join in the battle give him a call at 860/379-6199.