United States Department of Agriculture
FEDERATION OF STATE BEEF COUNCILS
FEDERATION HISTORY
First Beef Checkoff in the U.S.?
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1922 – Voluntary 5¢ per carload and
the first campaign was “Meat for
Health”
First State Beef Councils?
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1954 – California & Montana
1955 – Alabama & Florida
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1963 - Federation of State
Beef Councils
BEEF COUNCIL HISTORY
Alabama – 1955
Arizona – 1971
Arkansas –1983
California – 1954
Colorado – 1965
Delaware – 1989
Florida – 1955
Georgia – 1976
Hawaii – 1988
Idaho – 1967
Illinois – 1963
Indiana – 1976
Iowa –1970
Kansas – 1973
Kentucky – 1978
Louisiana – 1978
Maine – 1988 (closed 1/1/15)
Maryland – 1986
Michigan – 1972
Minnesota – 1967
Mississippi – 1968
Missouri – 1986
Montana – 1954
Nebraska – 1970
Nevada – 1971
New Jersey – 1996
New Mexico – 1979
New York – 1986
North Carolina – 1986
North Dakota - 1973
Ohio – 1970
Oklahoma – 1975
Oregon – 1959
Pennsylvania – 1976
South Carolina – 1986
South Dakota – 1964
Tennessee – 1986
Texas – 1986
Utah – 1969
Vermont – 1986
Virginia – 1965
Washington –1969
West Virginia –1986
Wisconsin – 1986
Wyoming – 1971
NATIONAL REFERENDUMS
First Attempt Failed in 1977
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Complicated
Value Added Assessment
Voting at ASCS offices
Required 2/3 majority
Failed (56.6%)
NATIONAL REFERENDUMS
Second Attempt in 1980
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Reduced Assessment
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Required simple majority
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Targeted 300,000 “joiners”
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Failed (34.6%)
NATIONAL REFERENDUMS
Third Time is a Charm in 1988!
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It’s state based -- States keep 50 cents
It’s fair - Everyone pays $1
It’s producer controlled
It’s cost effective - 5% administrative cap
It works – Results speak!
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Passed (79%)
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TODAY’S CHECKOFF
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Established as part of 1985 Farm Bill $1 per head
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Became mandatory via national
referendum vote by producers in 1988
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States retain 50 cents on the dollar;
forward 50 cents to Beef Board
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CBB administers program, subject to
USDA approval
STATE BEEF COUNCIL BOARD COMPOSITION
664 Board Members (39 of 45 Beef Councils surveyed 2009)
Industry Segments Represented:
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LMA/Auction Markets = 37
Farm Bureau = 31
Allied Industry/Multi-industry segment = 39
Packers/small processors = 15
Dairy = 40
CattleWomen = 17
Farmers Union = 12
CBB = 16
Veal = 6
R-Calf/US Cattlemen = 8
State cattlemen’s association = 192
Remainder (approximately 200) are unnamed, or named by
segment (cow-calf, feeder, stocker)
National Organization Time Line
1898-1905
National Live Stock
Association of the
United States
1951-1977
American
National
Cattlemen’s
Association
1996-Today
1963
Beginning of Federation
Beef Industry Council
NLSMB
1922-1995
1906-1950
American
National Live
Stock Association
National Live Stock
& Meat Board
1986-Today
1977-1995
National
Cattlemen’s
Association
Cornbelt Livestock Feeders Assn. (1946-1960)
National Livestock Feeders Assn. (1960-1977)
National
Cattlemen’s Beef
Association
Cattlemen’s
Beef Board
URGENT NEED FOR GREAT EFFICIENCY
Producer (Beef/Dairy)
Pays $1
Today’s
Checkoff
45
Qualified State
Beef Council
50¢
Importers pay $1/head or equivalent as
well as collections from 5 states without
Qualified State Beef Councils
Cattlemen’s Beef
Board
10 Members
from CBB
50¢
Federation of State
Beef Councils
State
Programs
Beef Promotion
Operating
Committee
(40 States Invest)
Dollars
National
Programs*
Make Individual Fiscal Program Decisions
Programs
*National contracting organizations include NCBA,
ANCW, NLPA and USMEF. CBB contracts to do
Producer Communications.
THE FEDERATION
The “Federation means the Beef Industry
Council of the National Live Stock and Meat
Board, or any successor organization to the
Beef Industry Council, which includes as its
State affiliates the Qualified State Beef
Councils”.
Beef Promotion and Research Order
FEDERATION VISION
Build beef demand by inspiring,
unifying and supporting an effective
state and national Checkoff
partnership.
(Adopted July 2008)
FEDERATION BELIEFS
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We believe in the success of a strong state and
national partnership resulting in increased consumer
demand for beef and higher consumer confidence.
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We believe in the Industry Long Range Plan as a
guidepost for the beef checkoff and the fundamental
principle of “one vision-one plan-one voice.”
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We believe in producer control of checkoff funds
through Qualified State Beef Councils which are the
foundation of the beef checkoff.
(Adopted July 2009)
FEDERATION ACCOUNTABILITY TO CBB
Beef Councils Must Provide CBB:
• Compliance Enforcement Plan
• Annual Financial Audit (statement of
negative assurance)
• Annual Marketing plan
• Annual Budget
• Periodic CBB Audits
FEDERATION RESOLUTION
THEREFORE, BE IT RESOLVED, the Federation
should operate in a more independent
structure while maintaining the synergies and
efficiencies of the current relationship with the
National Cattlemen’s Beef Association and
strongly opposes any effort to sever the
relationship.
(Adopted July 2010)
RESOLUTION WORK GROUP
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Scott George – Federation Chair
David Dick – Federation Vice-chair
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Regional Vice Presidents
Beef Council Staff – Federation Advisory Council
Revenue Seats
Auction Market Representative
Jerry Jacobs – Expert, Organizational Structure for
non-profits.
John Huston – Facilitator, Former CEO, Beef Industry
Council
PRINCIPLES OF INCREASED INDEPENDENCE
1. The Federation of State Beef Councils is reorganized so that all of its decision-making
with respect to the beef promotion checkoff
program is made independent from NCBA
decision-making with respect to government
and public policy advocacy.
PRINCIPLES OF INCREASED INDEPENDENCE
2. The Federation” consists of state beef
councils.
PRINCIPLES OF INCREASED INDEPENDENCE
3. Consistent with the federal Beef Promotion
and Research Act and Order, the Federation
exclusively nominates and elects the ten
Federation members of the BPOC, including the
Chair and Vice Chair. The Federation also
exclusively nominates and elects eight
additional representatives who, together with
the Federation Chair and Vice Chair, comprise
the Federation’s Executive Committee.
PRINCIPLES OF INCREASED INDEPENDENCE
4. A Federation Charter is adopted, or amended,
exclusively by the Federation; the central
feature of the Federation’s Charter is
independent decision-making by the Federation
on all matters related to the beef promotion
check-off program and prohibition against the
Federation using checkoff funds to influence
government or public policy.
PRINCIPLES OF INCREASED INDEPENDENCE
5. All funds generated into, and expended out
of, the Federation are subject to singular
banking and investment accounts;
transactions reflecting the Federation’s
name; separate financial reporting; and
exclusive control and authority by the
Federation.
PRINCIPLES OF INCREASED INDEPENDENCE
6. Annual budgeting for the Federation is
subject to the exclusive authority of the
Federation.
PRINCIPLES OF INCREASED INDEPENDENCE
7. A senior management executive, reporting
to the NCBA CEO, will be responsible for
managing the beef promotion check-off
program in coordination with the
Federation and its Executive Committee.
PRINCIPLES OF INCREASED INDEPENDENCE
8. In all procurement the Federation will
comply with requirements of the Act and
Order. A long-term renewable
Memorandum of Understanding subject to
NCBA and Federation adoption or
amendment is negotiated on a cost
recovery basis for services procured for
the Federation from NCBA.
PRINCIPLES OF INCREASED INDEPENDENCE
9. Governing documents of NCBA provide that
it will honor the independent decisionmaking by the Federation and its Executive
Committee; at any NCBA governance
meetings involving a combination of both
representatives of the Federation and
others, the Federation representatives will
not vote on non-check-off program matters
and the others will not vote on check-off
program matters.
PRINCIPLES OF INCREASED INDEPENDENCE
10. The Federation achieves efficiency and
transparency by participating in the
nonprofit corporation status and liability
protection, as well as federal income tax
exemption, of NCBA; it has public
transparency via NCBA’s Form 990
reporting to the Internal Revenue Service.
PRINCIPLES OF INCREASED INDEPENDENCE
11. The Federation will implement a compliance
function which will have ongoing responsibility
for reviewing and approving the checkoff
program decision-making independence of the
Federation and the accuracy and integrity of all
financial transactions and reporting involving
checkoff program funds managed under the
auspices of the Federation. This compliance
official will have a direct line of communication
to the Federation and its Executive
Committee.
QUESTIONS?
ANNUAL FEDERATION DIVISION BUDGETING
The Federation Division of NCBA prepares an annual budget with the
following approvals:
• May – approved by Joint Budget Committee (CBB & NCBA members)
• May – Beef Promotion Operating Committee (BPOC) approval
• July – approved by Federation members of the Executive Committee
• July – approved by Federation members of the Board of Directors
• September – amended budget which includes BPOC contracts is
approved by the Federation members of the Budget Committee
• September – amended budget which includes BPOC contracts is
approved by the Federation members of the Executive Committee
FEDERATION DIVISION FINANCIALS
• Monthly Divisional P&L prepared and distributed to
Federation Division leadership
• Separate Checkoff Bank account maintained at separate
bank for checkoff receipts and
disbursements/reimbursements
• Quarterly Divisional Balance Sheet prepared and reviewed
by CBB
• Audited financial statements reflect divisional P&L with
footnote disclosure of checkoff cash balance
CBB ADMINISTRATIVE OVERSIGHT
CBB to ensures compliance with the “firewall”
• On a monthly basis, CBB reviews every invoice for direct
checkoff costs
• On a monthly basis, CBB reviews all time charged to
checkoff projects
• Bi-annually for the preceding two years, CBB conducts a
compliance audit to assess NCBA’s checkoff compliance.
• Beginning with the July 2010 billing, CBB implemented
additional review procedures whereby they are reviewing a
much larger number of invoices and time and expense
charges.
FEDERATION DIVISION ANNUAL REPORT
• Annually, NCBA prepares an Annual Report for the
Federation Division
• Annual Report includes detailed Consolidating
Federation Division P&L
• Annual Report includes detailed Investment
Summary by SBC
• Annual Report is distributed to Federation members
of the NCBA Board of Directors and the various SBC
Board of Directors.