Nebraska bill affecting feedlot brand inspection moves forward

Nebraska Senator Teresa Ibach, a cattle owner from Dawson County, sponsored LB 646 which was amended on the floor Wednesday, April 2, 2025. The bill in its current form allows grow yards that are “affiliated” with Registered Feedlots (RFLs) to transfer cattle directly to RFLs without a brand inspection as long as the grow yard meets certain requirements such as permanent fencing, 100 percent of the cattle in the grow yard are under the management of the RFL where they are being transferred and proof of ownership (this may or may not consist of brand inspection paperwork) accompanies the cattle.

The legislative body – a unicameral – voted in favor of the bill. The bill will require two more majority votes in favor before it will advance to the governor’s desk.

The amended bill would assess RFLs a $1,000 per year fee.

Currently, RFLs pay a once a year per-head capacity fee to the Brand Committee, so a 50,000 head feedlot would pay $50,000. It is understood in the feeding business that feedlots usually do not feed cattle for a full year, so they usually feed more than their one-time capacity each year, meaning their brand inspection fee is less than the current $1 per head charge.  

Although Nebraska law requires cattle going to slaughter to be inspected, RFLs fall under special rules that allow them to ship to slaughter without an inspection. Instead, cattle are inspected in to the RFLs and the Nebraska Brand Committee conducts audits of the RFLs’ paperwork to ensure proper proof of ownership exists for the cattle in the lot. The audit expense is included in the one-time capacity fee. Some feedlots requested the RFL compromise so that they could avoid brand inspecting in the dark if cattle were shipped at night, and also to avoid added stress on the slaughter-ready cattle as those animals are fragile.

In simple terms, the RFLs pay up front for their inspection for slaughter. They pay for an inspection “in” instead of an inspection “out.”  

Currently cattle moving from a grow yard to a RFL must be inspected into the RFL. That inspection is an added cost above the one-time capacity fee.

LB 646 as amended would eliminate the inspection requirement from a grow yard to an RFL if the two are “affiliated.”

The brand inspection area in Nebraska covers approximately the western 2/3 of the state. Senator Ibach said her bill would create a more level playing field for the feedyards within the brand inspection area compared to those outside of the brand inspection area.

She said the RFLs in the brand inspection area are paying “exorbitant” fees and she said stolen cattle have not been found in a feedyard in the last two years.

Ibach emphasized the contributions that feedlots make to their communities by supporting local businesses, hiring employees, paying taxes and more.

Levi Fisher, the president of Equitable Bank, North Platte, said he deals with clients who feed cattle as well as cow-calf and yearling operations.

He said from the bank’s perspective, a brand is the only recognized form of ownership for cattle. “When we do inspections, we look at the brand. We look at the brand book to make sure that brand is on the cattle, we make sure the brand is current and registered to our borrower.”

Fisher said that third party verification of ownership – brand inspection – is a deterrent to theft.

“If I know there isn’t going to be a patrolman on the highway, I’m less likely to observe the speed limit. You have to have some kind of enforcement to keep honest people honest,” he said.

In Fisher’s opinion, a per-head fee is the most fair way to charge for brand inspection. Under LB 646, feedlots of any size would pay the same fee, $1,000, for the privilege of being exempt from the slaughter inspection requirement and inspections currently required from grow yards to RFLs.

The bill in its current form, could allow for cattle to go through the feed system without ever being inspected. If cattle originate outside of the brand inspection area or do not change ownership when entering an “affiliated” grow yard, they will not be inspected. They would then move into an RFL and on to the slaughter plant with no inspection at any point.

While LB 646 allows for the brand inspection program to conduct audits, it’s unclear whether a $1,000 per year fee would cover the cost to the Nebraska Brand Committee to conduct the audits. And in some cases there would be no brand inspection paperwork to audit. According to Senator Ibach, other forms of evidence of ownership could include bills of sale, breed certificates, and more.

Fisher said that he once helped a client gather about 500 calves out of a permanently fenced grow yard. “When we shipped the cattle, he was seven head short. They never found his seven head and they were never accounted for. There were 2,500 or 3,000 head in the grow yard that they could have been mixed with.”

Fisher said that cattle in grow yards and feed yards do get mixed on occasion. “To assume they never get mixed is to assume they never get pulled for doctoring, nobody every leaves a gate open…”

Fisher said that the per head fee of the brand inspection for feed yards including RFLs is a “cost of doing business.” He said in the banking business, the bank pays for FDIC insurance and the bank also pays for audits, which give his customers an assurance that the deposits have been reviewed by a third party.

“When you buy more land, you pay more property taxes. It’s understood that as you get larger, you’ll incur more expenses,” he said.

Fisher also said that he doesn’t see any evidence that brand inspection fees are restricting growth of western Nebraska feedyards. He estimates in Lincoln County alone, 50,000 to 100,000 more cattle are being fed there than 10 years ago.

“Show me how brand inspection is putting western Nebraska feedlots at a competitive disadvantage. We just built a packing plant. One of the country’s largest feedlots was just built in the brand inspection area. They chose this area for a reason.”

“It’s such a minuscule expense on a per-head basis,” he said. When Fisher has done “closeouts” on fed cattle that he financed, he would review the breakeven information at the feedlot. “Brand inspection was never even included in the cost of gain. It’s that small of an expense,” he said.

Fisher fears that by virtually eliminating expense for feedlots, the burden of supporting the brand inspection program will be placed on the producer, which he fears could slowly disintegrate the program over time. He said if the brand inspection program isn’t funded, it can’t function properly.

Cherry County Senator Tanya Storer, a rancher, asked many questions on the floor of the Senate. Storer, who served on the Nebraska Brand Committee in the past, has significant concerns about LB 646 weakening the brand inspection program. She believes that allowing cattle into grow yards, then into RFLs and on to slaughter without third party verification of ownership would open the door to more theft.

She described the high value of cattle at the current time and explained to the senators that vehicles have VIN numbers, which is comparable to a brand on cattle.

“The value and the purpose and the role of the brand inspection agency is proof of ownership, deterrence of fraud and theft…these are law enforcement officers…when we talk about weakening and doing anything that breaks that chain…it’s no different than defunding the police, quite frankly,” she said in the floor hearing.

Storer questioned the definition of “affiliated” grow yards and asked Senator Ibach if one grow yard could be affiliated with multiple RFLs.

In an interview with TSLN, Ibach said that is one point she would like clarified for herself as well.

Storer said that if LB 646 passes, cattle entering a grow yard or RFL are “required” to be accompanied with “proof of ownership” but there will not necessarily be a third party to verify this activity.

Ibach says this verification will happen during the audits, but Storer says some cattle could come into and back out of a grow yard or RFL never having been audited. And the auditors (brand inspectors) will not have brand inspection paperwork to audit in many cases. They will be auditing based on bills of sale or other paperwork that was never verified by a third party.

In a closing statement after her bill gained enough votes to pass, Senator Ibach said she planned to work together with Senator Storer to find a compromise before advancing the bill further.

In a Facebook post the day after the legislative vote, the Nebraska Brand Committee, the five- member governor appointed board charged with oversight of the brand inspection program, said “The NBC is committee to working with Senator Ibach, Senator Storer and all stakeholders to provide feedback and insights on the contents of the bill.”

The Nebraska Cattlemen’s board voted unanimously on April 1, 2025, to support LB 646 as amended. The Independent Cattlemen of Nebraska and the Nebraska Farm Bureau remain opposed to the bill.

“It is time to stop kicking the can down the road on critical brand law reforms in the state of Nebraska. The Nebraska Cattlemen Board of Directors overwhelmingly supports LB646 with the inclusion of AM829. To be clear, throughout this legislative session, Nebraska Cattlemen has never wavered from its longstanding and carefully crafted grassroots policy on brand law, which supports maintaining the integrity of brand inspection in Nebraska, modernizing inspection fees, and cutting unnecessary red tape preventing producers from efficiently moving cattle.

“We thank Senator Teresa Ibach for continuously engaging with Nebraska Cattlemen’s staff and leadership to reach a compromise that will ultimately benefit every sector of the beef cattle industry. The time to act is now,” said the Nebraska Cattlemen’s statement.

Senator Mike Jacobson, testified on the floor that, as a banker, he doesn’t finance cattle to go to Texas because that state doesn’t employ a mandatory brand inspection program. Jacobson, representing District 42 which consists of Hooker, Thomas, McPherson, Logan, Lincoln and part of Perkins Counties, said his rancher constituents, even some who are members of NC, are telling him “vote no.”