Earlier this summer, in a closely watched move, the Texas cattle industry came together to approve a one dollar increase to the existing dollar-per-head beef check-off.

Earlier this summer, in a closely watched move, the Texas cattle industry came together to approve a one dollar increase to the existing dollar-per-head beef check-off.

“The way we did it is we brought everybody in early and built a consensus,” said Pete Bonds, a third generation rancher from Saginaw, Texas, the current president of the Texas and Southwestern Cattle Raisers Association. “I just wish it was $5.”

The erosion in the value of the dollar coupled with declining cattle numbers has raised concern among supporters of the check-off, which is now almost 30 years old. The national beef promotion budget for 2014 is $40.7 million, down 5.6 percent from the previous year and well below peak revenues of $49.7 million in 2000.

With cattle prices surging to record highs, many supporters believe it’s a golden opportunity to seek more beef promotion money. Still, garnering support to double the national assessment has proven controversial.

Producers and staff walking the halls at the cattle industry summer convention, held recently in downtown Denver, speculated on what Texas’ successful campaign means for the future.

“It’s a big momentum swing,” said Michael Kelsey, executive vice president of the Oklahoma Cattlemen’s Association.

How Texas won support could offer lessons for other states, including Colorado and Oklahoma, which are in the early stages of seeking their own increases.
Still, success is far from assured.

In April, Minnesota beef producers voted against establishing a voluntary state check-off in addition to the federal check-off that all producers must pay. “We’ll try to do it again,” said Dar Geiss, an Angus breeder from Pierz, Minnesota, and president of the Minnesota State Cattlemen’s Association. “But the next time around we’ll be working more closely with the groups that opposed it the last time.” Specifically, he named Farmer’s Union as well as some “land and stewardship” groups.

Beef producers in California attribute a failure to marshal support for an increase to the state’s large dairy contingency.

Testing the waters has also proven discouraging in Nebraska and Wyoming, where Niels Hansen, a rancher from Rawlins, said the idea had been “coolly received.”

“You have a lot of communication to do anytime you talk about raising money,” he said.

Ohio producers, on the other hand, voted in favor of an increase last spring.

On the surface, building a consensus would seem challenging in Texas, a large and geographically diverse state where the Independent Cattlemen’s Association of Texas, a nonaffiliated state group that pre-dates the check-off, often takes political positions at odds with the National Cattlemen’s Beef Association.

But Bonds said leaders in the state were motivated by the imperative to “lead, follow or get the hell out of the way,” as he put it. He was less surprised that it passed and more perplexed that fully a third of the state’s cattlemen voted against it, despite a refund clause.

“To me, it was a no-brainer,” he said. “They can write in and get their money back and let me pay to promote their beef.”

Chuck Kiker, a member of Texas’ independent cattlemen’s group and a one-time president of R-CALF USA who went on to help found the U.S. Cattlemen’s Association, said in fact the state is unique for having a long history of gathering all cattle groups around the same table.

“Everybody has seats on the beef board, and everybody communicates and talks,” he said.

The state has formed a new Beef Promotion and Research Council to administer the additional check-off funds. Bruce Dopslauf, a cow-calf producer from LaGrange, Texas, who was named to that board by Ag Commissioner Todd Staples, said they would meet in Austin in August to finalize more details, including how the new money will be allocated. (The existing $1 check-off will continue to be split 50-50 between the Texas Beef Council and the national beef promotion board.)

“This is breaking new ground,” Dopslauf said.

State-by-state approach debated

The idea of increasing the check-off state-by-state had its origins in the outcome of a U.S. Supreme Court challenge in 2005, at which time the mandatory check-off was deemed government speech, according to Bob Drake, an Angus breeder from Davis, Oklahoma. The ruling saved the check-off but also tied it to the federal government in a way that causes many cattlemen boot-shuffling discomfort.

“Do we want to give another dollar for USDA’s oversight?” Drake said, expressing frustration with the current administration that was widespread among producers in Denver. “If we raise it on the state level, the Oklahoma Beef Council will have complete control, and they do a really good job of managing the funds. They can choose to fund national promotional efforts without going through the beef board.”

Dee Likes, the executive vice president of the Kansas Livestock Association, had a different view. While the dollar today has only 40 cents of the purchasing power it had back when the check-off was first enacted, he said there are currently no discussions under way in Kansas to push for a state increase.

“There is a need for an increase, but we need to be prudent about it,” he said. He would rather see a favorable consensus form at the national level, adding there was a lot of support for the check-off but resistance, too.

“It’s not so much the check-off, it’s more of an anti-establishment mentality,” he said.

Perry Owens, of Minneapolis, Kansas, said it wasn’t fair to ask businesses in one state to collect an additional fee but not those in another. In the past, his feedyard lost customers over an agricultural sales tax in Kansas that is no longer being collected.

“It’s just one dollar, but it makes a difference,” he said.

Most of the proposals allow producers to request a refund, but the money is collected upfront first. There is also typically a clause inserted to prevent a double whammy if a national increase is eventually approved.

“I just think it’s better to do it on the national level,” Owens said.