Checkoff representatives: Checkoff can promote US Beef
With both cattle and beef imports up for the year of 2020, tensions run high as U.S. ranchers face the reality that this year’s calf check may not pay the bills.
According to USDA, 2,349,398,000 pounds of beef were imported from January to August of 2020, while 2,107,771,000 pounds were imported during the same time period in 2019, for an increase of 12 percent.
Some industry spokemsen have said that additional imported beef was needed in order to supplant beef that U.S. packing plants couldn’t produce due to COVID-induced shutdowns. But with reduced packing capacity, a year over year increase in imported cattle – 1.4 million head from January to August of this year compared to 1.35 million head wouldn’t seem to follow the same logic.
The increases in both live cattle and beef imports coupled with low feeder cattle prices in the US leaves some American ranchers asking how they can compete.
David Wright, a western Nebraska cattle rancher and past member of the Cattlemen’s Beef Board believes some American consumers would like the opportunity to buy American born, raised and processed beef. He would like to see the Beef Checkoff promote American beef but he says it has been his understanding that this wasn’t possible.
The Montana Beef Council, for one, has stated in legal documents that the Beef Checkoff is prohibited from promoting US beef.
“The Act and Order prohibit any Beef Checkoff funds be used for domestic marketing promoting exclusively domestic beef,” says a legal brief prepared by the Montana Beef Council’s legal representatives.
“The Beef Checkoff ‘finances generic advertising,’” said the brief, referencing the Johanns v. Livestock Marketing Association case of 2005.
Two spokesmen for the Cattlemen’s Beef Board say otherwise.
Both the CEO and the attorney representing the Cattlemen’s Beef Board believe that there are, in fact, opportunities for the Beef Checkoff to promote US born, raised and processed beef.
“There is nothing stopping us from promoting US beef,” said CBB CEO Greg Hanes to TSLN.
“If we want to promote US beef, we would need notification,” he said, adding that the Beef Checkoff can and often does partner with specific brands for advertising campaigns, and a partnership with a company selling verified US beef is not out of the question.
When asked if a campaign urging consumers to “Eat US Beef” could be supported with Beef Checkoff dollars, Hanes responded, “I think we can do something like that.”
He added that the Beef Checkoff never promotes foreign beef specifically, “so it is kind of de facto promoting US beef.” He said a promotional project for US beef specifically would have to be factual and be able to prove the product is, in fact, US beef.
Attorney Wayne Watkinson who represents the Cattlemen’s Beef Board said that a US beef promotion campaign could be possible provided it meets all the labeling requirements, all the verification requirements and it is submitted as a brand name program.
“We do obviously have importers that also participate in the program. There is some concern about using importer money to promote US beef but I think that’s one we might be able to get over. I think it’s more of a labeling issue,” he said.
“I think there is a way that we can promote US beef. It has to be the right program. Obviously we have to overcome labeling issues. But I think, under the Act and Order, it may be possible to promote US beef,” he said.
“If we had a process in which beef was labeled as US beef and there were regulations relating to the labeling of US beef, would we be able to promote it? There is that possibility,” Watkinson said.
The Montana Beef Council helped fund a campaign promoting North American beef in 2014. Fast food chain Wendy’s ran a $10,000 campaign advertising North American beef – half of the advertising money was put up by the Montana Beef Council using Checkoff dollars. Wendy’s kicked in the other $5,000.
Watkinson said brand campaigns are not an uncommon use of checkoff dollars. In order for a brand, whether it is Krogers or Tyson or Hardee’s or any other brand, to be approved for advertising help, the request must be approved by the USDA and also the CBB Executive Committee. All state beef council project ideas are approved by either the USDA or a state entity, depending on the legislative oversight of each state group. Authorization Requests, which are funding requests made by organizations like the NCBA, are approved by the Beef Promotion Operating Committee and USDA.
In a brand campaign, the brand itself would often put up more money than the CBB, he said.
Both Wright and another former CBB rancher member Leo McDonnell of Columbus, Montana, say they believed Beef Checkoff dollars could not be used to promote US beef, but they would like to see it happen.
“Why can’t we use 80 percent of the checkoff dollars to promote US beef? Ideally what I’d like to see is, if we get MCOOL back, we release the importers from paying into the Beef Checkoff, then we could make it like a branded program and promote US beef,” said McDonnell.
The CBB collects approximately $42 million each year to be used for beef promotion, research and education.
“American consumers do care. They paid a hell of a premium in 2014 and 2015 for 90 percent domestic lean. A hell of a premium over imported lean,” said McDonnell. Retailers and wholesalers didn’t want to put product on their shelves labeled with multiple countries as the origin, he said.
Wright pointed out that domestic cattle prices are closely tied to import volumes. “When the percentage of foreign meat is increased, it causes a drastic fall in price,” he said. “Information is money,” he said. “If information is held, it’s profitable to someone. If information is released, it’s profitable to someone else.”
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