House of Representatives keeps North Dakota Beef Checkoff mandatory
The North Dakota House of Representatives denied an effort to reform the state beef checkoff.
HB 1487 would have made the current $1 per head mandatory, refundable state checkoff into a voluntary program. The state checkoff was implemented in 2015.
The bill, introduced by representative Sebastian Ertelt of Lisbon, would have allowed North Dakotans to opt in to the state beef checkoff. The current law requires that anyone who sells cattle in North Dakota or from North Dakota must pay $1 per head for the state checkoff in addition to the mandatory $1 per head federal Beef Checkoff.
To get a refund of their state checkoff dollars, producers have 60 days to request a refund form from the North Dakota Beef Commission. Within 90 days of the sale they must complete the paperwork and send it back, with proof of sale (receipt or bill of sale). The form is available only by request.
According to the North Dakota Beef Commission income statement, for fiscal year 2020, July 1, 2019 through June 30, 2020, North Dakota producers paid about $1.2 million in federal Beef Checkof dollars and about $1.1 million in state checkoff dollars. About $563,000 (half of the federal checkoff) was sent to the Cattlemen’s Beef Board, as required by the federal checkoff. States keep half of the federally-assessed funds for state-administered projects.
About $136,000 of state checkoff dollars were returned to producers as refunds.
During the House Ag Committee testimony, 11 ranchers, including the president of Independent Beef Producers of North Dakota, testified in favor of the bill to make the state checkoff voluntary. Some ranchers said they’d had issues getting their refunds. One rancher said he had submitted his salebarn receipt as proof of sale, but blacked out some business information, including the weight and value of his cattle. The commission said he needed to send a copy of the receipt that included all the information.
Stephanie Maher of Morristown, South Dakota, (near the North Dakota border) testified that the North Dakota Beef Commission would not send her and her husband a refund form upon her phone call request. Even though her name is on the brand, and the sales slip was in the ranch name, they would not send the refund form until hearing a man’s voice on the phone. “I put my husband on the phone and they were satisfied. They had no idea if it was him or another man, they didn’t verify that it was him, but it was a man’s voice so they were finally satisfied,” she said. “I think they believe it is their money and they are going to do everything possible not to give it back,” she told TSLN.
Many proponents voiced concern over the increasing amount of funding the state beef commission is sending to the Federation of State Beef Councils, a division of the National Cattlemen’s Beef Association. This year the North Dakota Beef Commission sent over $700,000 to the Federation, which is made up of state-appointed producers. According to http://www.ncba.org, Qualified State Beef Councils may decide to contribute to the Federation with a portion of their 50-cent share of the checkoff. These dollars are re-invested in national checkoff programs. The North Dakota Beef Commission decides how much of the state checkoff revenue and the 50 cents of the federal beef checkoff that they retain, is sent to the Federation each year.
For the fiscal year ending Sept. 30, 2020, the Federation collected $11.174 million from state beef councils. The Federation spent $5.789 million on promotion, research, consumer information, industry information and foreign marketing. They spent $2.825 million on Federation relations, customer service and governance. The remaining $2.56 million was put into reserves.
Most who criticized the commission for sending money to NCBA were upset with that organization’s role in the repeal of mandatory country of origin labeling for beef.
Several ranchers said they do not receive any reports from the state beef checkoff to inform them of how the money is being spent. The North Dakota Beef Commission website includes an expense breakdown of the checkoff dollars (state and federal checkoff dollars are not accounted for separately) spent on administration, research, international promotion, etc. The online report doesn’t include information about specific projects, locations of projects or recipients of research dollars (the North Dakota Beef Commission shared some of this information with TSLN, and it can be found at the end of this story).
North Dakota Beef Commission executive director Nancy Jo Bateman said she was testifying from a neutral position to share information with the committee. In an answer to a question, she said that the beef commission sends 10 percent of the state dollars monthly to NCBA’s Federation of State Beef Councils with no earmark on how it should be spent. Bateman also explained the refund process and said the commission has not had major issues in providing refunds to producers.
The president of the North Dakota Stockmen and a former member of the North Dakota Beef Commission testified in opposition to the bill, as did two ranchers and a former salebarn owner. A current Beef Commission member responded to questions but did not state whether he was for, against or neutral on the bill.
The current Beef Commission member, Travis Maddock, of Davenport, said he believes the Commission’s job is to take tax dollars and distribute tax dollars. He said the annual report is available online and also in the North Dakota Stockmen magazine and possibly another ag newspaper. He and Bateman said they worry that if the checkoff were to become voluntary, that very few cattle producers would choose to contribute. “I think a lot of people will choose not to check the box,” he said.
He added that the commission wants to make the system as easy as possible for North Dakota’s beef producers, but did not offer any solutions to the problems brought up during testimony.
When asked about the significant amount of checkoff dollars going out of the state for national and international promotion, Maddock said the finances went through the U.S. Meat Export Federation to promote beef internationally. “As a commission, we’ve decided that export markets is an important part of our overall strategic plan. In fact it’s ranked number one,” he said. According to meeting minutes obtained by the NDBC, the commission had agreed to send Maddock on a trade mission to Japan in April of 2020. The commission budgeted $9,000 for commissioner travel expenses for FY 2020. Because of COVID, the trip did not happen.
He also detailed the committee structure of the Federation of State Beef council and Cattlemen’s Beef Board, saying all projects are properly vetted by beef producer board members.
“We always have someone at that table from North Dakota helping guide where those North Dakota dollars are going,” Maddock said.
The only rancher on the ag committee, representative Kathy Skroch, from Lidgerwood, asked Maddock if meatpackers pay into the checkoff. He said, “That’s a complicated question to answer. First of all, the thought that the packers are somehow responsible for the promotion of beef is erroneous. The packers are just a harvesting mechanism, like a combine. It would be like asking John Deere to promote sweetbread.” He said if the packers were forced to pay the checkoff, they would simply pay less for cattle. “The solution to the checkoff question has little to do with the packers,” he said.
Brian Amundson, a rancher from Jamestown, spoke against the bill, apologizing to the committee for the supporting testimony, saying he was ashamed of his industry for “inundating” the legislators to support HB 1487.
“I’ll pay the tab, because I believe in it,” he said. “I have a tough time with the things that were said. They are slanderous. I sell fat cattle, I don’t like what goes on within our industry internally. But that’s not the beef commission, that’s not the beef promotion and research and education, that’s not our $2, that’s industry issues. That’s not your place, that’s ours to take care of. Because we’re bad stewards, that’s not your obligation to sit here and make a decision in an industry that you’re not involved in,” he said.
The House Ag Committee, under the direction of their chairman, representative Dennis Johnson, who carried the 2015 bill to implement the state checkoff, voted 11-2 with one absent to advance the bill with a “do not pass” recommendation. Skroch (a Republican and the only rancher on the committee) and Kiefert (a Republican farmer from Valley City) were the 2 supporting votes. There was one member absent who did not vote.
The committee heard several hours of testimony on this bill. In online testimony, 42 people supported the bill, 24 opposed the bill and one was neutral, according to their stated positions on the website.
Representative Mike Beltz, a farmer from Hillsboro who sits on the North Dakota Dry Bean Council, the North Dakota Soybean Council and the US Dry Bean Council, who supported the “do not pass” motion commented that “…there are implications beyond this group, if this happens….it not only affects you and what happens in your business, it can have an impact on all the ag businesses and all the checkoff groups.”
The full House of Representatives killed the bill in a 41-53 vote. All the members who identify themselves as ranchers on their official government profiles, Skroch, Jones, Kempenich, Magrum, Paulson and Simons, voted in favor of making the checkoff voluntary. Skroch, Simons and Magrum spoke in favor of the bill on the House floor, as did the bill sponsor.
The North Dakota Beef Commission is made up of nine members appointed by the governor. Four members are from names submitted by the North Dakota Stockmen, one is from names submitted by the North Dakota livestock auction markets, one is from names submitted by the North Dakota milk producers association and three are at-large members.
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