From the President’s Desk…
HOW YOUR CHECKOFF WORKS
By Dave Wright
ICON President and NBC Region 4 Director
In 1977 a vote was taken for a national beef checkoff. The parameters for the vote were a 2/3
majority being held at county extension offices. It failed with 56.6%. They again tried in 1980 but
this time all that was needed was a simple majority and the vote was taken once again at the
county extension offices. It failed again with only 34%. In 1985 the checkoff was written into the
Farm Bill so a vote was then held in 1988. All that was needed was a simply majority and the vote
was held at the ASCS offices instead of the extension offices. It passed with 79% of the vote.
Every time an animal changes ownership, $1 is collected and sent to the Qualified State Beef
Council (Nebraska Beef Council). The state beef council sends $0.50 to the Cattleman Beef
Board (CBB is in charge of oversight for the checkoff and contracting for the national dollars,
about $40 million) and keeps $0.50 for themselves. If the state beef council chose to, they can
send money to the Federation of State Beef Councils (the Federation is the checkoff side of
NCBA) to be pooled with other state beef councils (there are 40 of the 45 state beef councils in
the Federation, the money collected from the 40 is about $10 million). The $10 million is then
used along with the $40 million from the CBB to fund national programs like, ‘Beef it’s what’s for
dinner’, or research to find new cuts of beef like the flat iron, and informing the public on the
nutritional value of beef. NCBA wins the majority of these contracts. The decision as to who wins
the contacts is made by the Operating Committee (10 people from the CBB and 10 form the
Federation).
WHO IS NCBA?
In 1996 the Meat Board merged with the National Cattlemen Association to form NCBA and the
Federation was brought in as well. These three were the top contractors for checkoff dollars.
Now NCBA is by far the largest contractor and the staff of 126 is shared to ensure their strength.
WHAT IS THE NEBRASKA BEEF COUNCIL?
The Nebraska Beef Council (NBC) is the qualified state beef council for Nebraska. The state is
divided in to nine districts and the producers from those districts elect someone to serve as their
director on the Nebraska Beef Council. The term is four years and you can only serve two
consecutive terms. The board of directors is responsible for setting a budget to allocate the funds.
WHO HAS THE POWER?
For eight years I have served on the Nebraska Beef Council and I have lost the budget fight every
year. The board always sends better than 40% of our budget to the NCBA in the form of
Federation Investment, this is usually north of $1.5 million. The board also sends better than 12%
of our budget to NCBA for International Marketing, this is usually north of $450,000. The board
believes it is better to pool this money with other states at the Federation. What I see is that this
money buys seat at the Federation. The first three seats cost $32,000 each, seats four and five
cost $250,000 each, seats six and above cost $500,000 each. The board seats seven directors
and because Nebraska sends over $1 million we get one seat on the NCBA Executive
Committee.
When it comes to International Marketing, if we were to send that money directly to United States
Meat Export Federation (USMEF) we could buy votes at USMEF for $8,600 per vote. But the
board chose to send that money to NCBA and buy a seat at NCBA while letting NCBA send our
money to USMEF and giving those votes at USMEF to NCBA.
The Nebraska Department of Ag comes to our meeting and request funds to help out with their
foreign trade missions, to help promote Nebraska beef. For the first two years I voted against this
and it would pass any way. So the next six years I said, “If we are going to use Nebraska
producer’s dollars, I would like to see that Nebraska checkmark on the promotional material.” It
was agreed that the Nebraska checkmark would be used. In December of 2009 the Department
of Ag came to our meeting and said that the Nebraska checkmark is showing up on menus in
Hong Kong. I feel that this could help our Nebraska producers better than sending the money to
NCBA.
When the board sends money to NCBA we lose control over that money, there are 85 Federation
directors and 106 CBB directors that help to prioritize how the money is spent. But only the 20
people on the Operating Committee have the final say. If we kept the money in the state and work
with other beef councils like New York, Florida and California to help them in high population
areas and work with our own Department of Ag to promote Nebraska beef abroad, the Nebraska
producers would have more control through their directors.
I think when we send the money to NCBA we empower our directors, if we keep it in the state we
empower the producers.