Maximizing the Beef Checkoff Program: Producers examine use following Wendy’s ad campaign
June 14, 2014
Some of the cowboys who financed the project might not know how to pronounce it, but the Montana Beef Council this past February teamed up with Wendy's for an advertising campaign promoting the new Ciabatta Bacon Cheeseburger.
According to Chaley Harney, executive director of the Montana Beef Council, state beef councils collect the $1 per head for checkoff funding and retain up to half, sending the balance to the federal Cattlemen's Beef Board. The checkoff funds used in-state fall under the same rules and regulations as the federal beef checkoff.
When the Wendy's advertisements, funded in part by the Montana Beef Council, ended up including a reference to Wendy's sourcing of "North American beef," a national cattle group filed a complaint with the USDA, the checkoff oversight agency, questioning the legality of the advertisements.
R-CALF USA said in their letter that they had "long understood" that beef checkoff dollars could not be used to promote USA beef, and that Montana Senator Jon Tester introduced an amendment (in 2009) to the Act and Order that would allow for the promotion and marketing of products derived from cattle … exclusively born and raised in the United States.
The letter also cites Supreme Court language that states the beef checkoff is a "federal program that finances generic advertising."
"Clearly, Senator Tester would not have offered this amendment if the Beef Checkoff Program already allowed for the promotion of beef based on its origin," R-CALF CEO Bill Bullard said in the letter.
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The question then, was, is checkoff-funded advertising that references North American beef legal?
USDA Undersecretary of Marketing and Regulatory Programs Edward Avalos responded on April 28 to R-CALF USA, saying his research team had concluded the February advertisements were "in compliance" with the Beef Promotion and Research Act because they were a reference to, not an advertisement of, North American beef.
According to the financial statement found on splitting hairs?
As Travis Choat, owner and operator of custom processing plant, Powder River Meat Company of Terry, Mont., said he isn't concerned about getting hung up on the details.
"I serve a small local market. I serve the best customers in the world because that is what they do for a living. I'm blessed with customers that know what beef is and they know they like it."
Choat said looking at the Act and Order to consider necessary changes would be okay with him.
"I don't think we should ever write something in stone. It is always good to look at things again."
But he said he doesn't have enough information about advertising projections to support or oppose a change that would allow for the specific promotion of USA beef.
"We need to look at the best way to spend those dollars so we have the best outcome for the participants. Period."
"The checkoff is paid by importers and U.S. producers and the checkoff is to promote commodity beef. We wouldn't use checkoff dollars to promote a specific country of origin because we want to be fair."
The beef checkoff is something that producers helped create nearly 30 years ago, she said.
"It's theirs and I am a staff member and so I will do what the producers want. If they want to promote USA beef and the act and order are dictated as such, I will follow the law and what the producers want us to do and I would be happy to do as the producers would like. That's my job."
She said the Montana Beef council was pleased with the outcome of their advertising campaign with Wendy's.
"We sold 23,000 sandwiches in the very frigid month of February. This promotion was not about promoting American beef, it was about promoting Wendy's Ciabatta burger."
The beef council did, however, recognize the concern with Wendy's reference to sourcing North American beef so they conferred with Wendy's and "pulled the tagline" early on in the month-long campaign.
One member of the Cattlemen's Beef Board said she believes "it would be implicitly understood by ranchers in the United States of America that the Act was created to promote our beef.
Sherry Vinton, a cow calf producer from Whitman, Neb., said that in her board training manual, she finds the CBB's mission statement, saying it is dedicated to "improving producer profitability, expanding consumer demand for beef and strengthening beef's position in the marketplace.
"Since it is an Act of Congress of the Unites States of America, isn't it inherently understood that this is for the promotion of USA Beef?"
Vinton said she thinks maybe the industry needs to continue to review the oversight language of the checkoff.
"This is an opportunity to listen, investigate complaints and strengthen the beef checkoff for our producers."
Another Nebraska CBB member, Joan Ruskamp, who owns and operates a feedlot in the northeast part of the state along with her husband, said she's in favor of promoting all beef.
"We are a corn-fed operation but I want people eating beef, whether it is corn-fed or grass-fed beef."
While she wouldn't support the spending of federal checkoff dollars in any other advertising campaigns where "North American beef" was referenced, she supports the general promotion of beef.
"I'm proud of what we do here but I'm also proud of what they do in Montana, South Dakota, Illinois. I know how hard other producers in other countries work to promote their product. I just want people to eat beef because I know it's good for them. I like the people that I've met in the beef production business, whether they are researchers, cow-calf or other sectors."
She said she hopes to see the "incredible people" in the beef industry continue to have the opportunity for success.
According to the website, http://www.beefboard.org, over $39 million in "assessments" were collected in 2013.
"The program is financed by a $1 per head assessment on domestic sales of cattle and on imported cattle, beef and beef products," explained the annual report.
The Beef Industry Long Range plan for 2011-2015, also posted on the website, references to the domestic industry. The Strategic Intent Statement follows: "By 2014, our industry will achieve a Wholesale Beef Demand Index of 110+ by capitalizing on the quality, safety and taste of U.S. beef while communicating the health, nutrition and convenience benefits of beef and beef products to targeted domestic and international markets."
Another goal: "Position the U.S. cow herd for growth. Goal: Increase bred heifer retention to 18 percent while stabilizing U.S. beef production at a minimum of 26 billion lbs."
"Let's start addressing this," Vinton said. "The Montana Beef Council took quick action when they realized the ads included language referring to North American Beef. They did the right thing. This could be an opening now to address a bigger issue. Most reasonable people would assume it (the beef checkoff program) is not for North American beef, it's for USA Beef." ❖