Belk: Checkoff is vital in facing outside threats
In 1984, beef producers followed in the steps of sugar cane and produce growers, creating a national check off program by a referendum. Much of the produce industry followed marketing orders and the concept of the industry voting a levy upon itself to fund marketing efforts so it wasn’t a new concept, though passing the checkoff passed on its second attempt.
The program, according to Dr. Keith Belk, is clear in the legislation that funds are to be used only for producer information, promotion, and research. Though it has evolved over the years, he said the return on investment is clear citing research by credible economists and more.
“There’s sometimes a lot of criticism that ensues because they say the packers have too much influence or retailers have too much influence and that’s not right,” he said. “On the check off side of the equation, every state has representation based on the cattle numbers in that state and anyone who has worked with the Cattlemen’s Beef Board knows that there’s not as many politics within the organization as there are outside the organization. It’s evolved with different members on the board, but they’ve been steadfast to the concept that it’s for promotion, education, and research.”
There has been no lack of criticism on where funds have been invested, he said, though the audits over the years have been clear that the funds have been used as prescribed by the legislation.
To the argument that cattle producers sell cattle and it’s the packers who sell beef, Belk is clear.
“There’s no cattle market without beef sales,” he said. “I’ve been in the cattle and sheep business all my life myself and my dad always taught us the consumer is always right. The efforts to maintain demand for beef have created demand for cattle.”
The Certified Angus Beef program and other branded beef programs like it, though unlike the check off because specific breeds are identified, is one Belk said illustrates the concept of driving cattle demand. By partnering on intentionally meeting a specification that meets a consumer demand target, value is added to the point that he said some breeds that haven’t traditionally been black hided now are in search of premiums.
That value at the retail counter, he said, has trickled to producers and those value-added program cattle can bring, depending on the market, $15 to $30 per head than conventional cattle.
Belk, who is currently a professor and head of the Department of Animal Sciences at Colorado State University, said the check off played a vital role in protecting the industry during the BSE outbreak.
BSE hit on December 21, 2003 when a Canadian Holstein cow on a dairy in Washington was diagnosed by USDA’s APHIS after testing at the National Veterinary Lab in Iowa for confirmation.
“That happened at about 3 in the afternoon and my phone was ringing off the hook during this whole time,” he said. “By midnight, about 90 countries had shut their doors on U.S. beef.”
Belk, who gained international market experience working for the USDA developing programs for value-added products for export, worked on behalf of the government and the USMEF, which is partially funded by checkoff dollars, to retore the confidence in U.S. beef to the countries that had shut their doors to us. That included working with those countries to develop new mechanisms for demonstrating that the product was safe.
“Producers didn’t always agree with what ended up opening up the markets, but it opened up the markets and now we’re fully open,” he said. “The checkoff contributed the dollars that were used to help promote the beef and the safety programs in our beef production system to customers in other countries, which helped us restore confidence- and political confidence- in the products that were being marketed there. That’s no minor detail.”
Producers, he said, tend to see things through a narrow view and, had he not worked in this area, he said he undoubtably would as well. The one thing he said he’s learned in 30 years of working in international markets is products produced in other countries and different than those produced here. Using Brazilian beef as an example, Belk said until consumers, especially those who have lost faith in our safety programs, understand the production differences, there is no credibility.
“What the check off dollars helped to do during that period of time was restore confidence in those markets,” he said. “First it was Japan, and then Korea, then China, then Hong Kong. I worked with all of those countries on behalf of our government and on behalf of the check off to restore that confidence.”
Opening these markets, he said, meant about $150 per head for every steer and heifer slaughtered in the U.S. at that time, now it would be more than that.
“It was a substantial opportunity loss,” he said. “When you have that kind of volume, you have to figure out what to do with it. Some of it was strip steaks and middle meats and things like that, but an awful lot of it was cuts no one consumes here so if I can’t ship livers to Egypt, for example, the value of the liver goes from .80 per pound to .10 per pound immediately.”
Those cuts, he said, add up and contribute to the value of an animal.
Belk said the BSE situation isn’t the sole example of the value of the checkoff. Another high-profile example was when Oprah Winfrey infamously disparaged the cattle industry on her television show. Paul Engler and Cactus Feeders filed a lawsuit against Winfrey in 1996.
“The checkoff was paramount in essentially doing crisis management and providing information,” he said. “Some people will remember the 1995 outbreak of e Coli which has led to 35 years of new regulatory controls. The check off has invested substantially in improving the safety of beef products. There are no interventions or management systems in existence today that don’t have roots in the checkoff.”
From his perspective with a lifetime in the industry, Belk said he understands the criticisms of groups seeking to do away with the checkoff but said what troubles him is not what happened years ago, but what is happening in the industry today.
“Bringing PETA and HSUS to the party as team players to route the checkoff is never going to be good for the industry,” he said. “That’s like the NFL teams all fighting with each other and forgetting they have a customer base to take care of. That’s what’s happening. The industry is fighting so much internally that they’re forgetting they need to be externally focused because that’s where the real pressure is coming from.”
It doesn’t matter, he said, which side of the check off you’re on, fighting among those in the industry will have lasting negative impacts, especially as outside efforts like Initiative 16, the PAUSE act, bear down on the industry.
If producers vote to end the check off, Belk said the states with check off programs like Texas, that he said have been visionary will continue to prosper.
“States with nothing else will be sacrificed,” he said. “You can’t meet the forces that we’re all facing- I’ll give you Prop 16 as an example- without the checkoff.”
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