Nebraska brand law working group to meet in the west
for Tri-State Livestock News
NORTH PLATTE, Neb. – On Tuesday, Oct. 20, the cattle industry working group tasked with developing Nebraska’s next cattle brand legislation will meet for the first time to the west of the line that makes up Nebraska’s mandatory brand inspection area. While the press has been invited to attend, at this time the meetings are still closed to the public due to COVID-19 concerns.
“Every part of the industry needs to respect the other parts, no matter what,” Sen. Steve Halloran, chairman of the unicameral agriculture committee, told working group representatives last month at Fonner Park in Grand Island. Halloran’s interim study, LR 378, is intended to develop new legislation that closes the gap between the supporters of brand inspection and its detractors.
“I’m asking you to write us a bill,” he told the task force. “If you all don’t help us write a bill, we’re all going to be back at step one. Somebody else might introduce a bill and you may not like it.”
EAST OF THE LINE
Last month’s inaugural meeting, held outside of the brand inspection area, highlighted an important fact: none of the senators on the agriculture committee represent districts in the western two-thirds of the state where mandatory brand inspection is the law.
“We live in a vacuum down there in Lincoln,” Halloran said.
Halloran said during his introduction that the primary purpose of the Nebraska Brand Act was to protect Nebraska brand and cattle owners from theft of livestock, a mission which is accomplished through brand recording, brand inspection, and theft investigation.
“While the brand law may technically be regulation, I’ve taken the view that the brand law, including brand inspection is essentially a service to the cattle industry in this state, one that cattlemen themselves have been historically willing to pay for,” Halloran said. “Essentially, brand inspection is the provision of a trusted third-party verification of ownership at the time cattle are sold or moved out of the brand area.”
Halloran said that inspection serves a dual role: it deters theft, and it provides that third-party certification – a document that proves the bearer of brand papers owns the cattle carrying that brand. As a general benefit, the brand law also helps preserve integrity in the marketplace.
Halloran said that so long as the cattle industry finds value in mandatory brand inspection, he will defer to the wishes of the cattle producer and others in the industry who utilize that service. However, Halloran said that since becoming the chairman of the agriculture committee, he has been given the impression that opinions vary on whether the cost of the services the Brand Committee provides justifies the value of the services received.
Those arguments about the brand law were laid bare in last spring’s competing brand bills, LB 1165 and LB 1200. Both bills proposed radically different solutions, and Halloran said that that neither bill was ready for “prime time,” which led him to introduce the interim study which created the working group.
“I don’t think we can simply accept stalemate, and I’m not sure the status quo is ultimately sustainable,” Halloran said. He said that unless there is industry consensus among the members of the working group, competing bills with divergent goals will continue to be introduced.
“There is no hidden agenda to eliminate brand inspection or expand it,” Halloran said, rather the interim resolution was to provide a forum with which to engage the industry and see if the brand law and its mandatory inspection provision is still considered worthwhile, and whether technology and other changes in the industry are increasingly making the brand law obsolete.
CHALLENGES FROM RFLs
The line that separates the west and east end of the state dominated discussion during the working group’s roundtable. Halloran invited some of the Brand Committee’s biggest detractors to voice their grievances with the brand law.
Jack Lawless, feedlot manager for Gottsch Feedyards, substituted for Bridgeport’s Pete Lapaseotes as a member of Nebraska Beef Producers Committee, the feedlot group which had filed an unsuccessful lawsuit against the brand committee in 2017, seeking to end the inspection and enforcement of Nebraska’s Brand Law and an end to the collection of fees from Registered Feedlots (RFLs).
Under the RFL program, which is voluntary, feedlots can opt for registered status, in which feedlots pay a $1 per head fee for their max capacity, which can be a significant expense for large lots. However, if an RFL is stocked 2.5 times throughout the year (as many are), the fees paid by RFLs works out to fewer than 50 cents per head. RFLs then maintain records of ownership, which then undergo quarterly audits from Brand Committee inspectors.
In exchange, RFLs are then free to ship cattle without having to pay for a local inspection. This allows an RFL to ship cattle without stressing the animal or the threat of shrink. Since the law says local inspections can only be performed during daylight hours, registered feedlots also get the added benefit of being able to ship at will, including nights and holidays when inspectors are out of service.
A 2015 survey of registered feedlots in the inspection area conducted by the brand committee found that the majority of RFLs found value of the service; however with the rise of the Beef Producers Committee, it’s the squeaky wheel that gets the grease.
“We already manage inventories because we have to, not only because of lenders and customers, but they never come to inspect the cattle, they come to inspect our records,” Lawless said. “We have to keep those records regardless of whether they get brand inspected. We don’t keep any different records on the eastern part of the state than we do in the west where it is inspected.
“We feel like that’s a burden,” he said. “(Inspection) is a service for the guys out in the country, but we shouldn’t have to carry that burden for them.”
While a registered hot iron brand is proof of ownership in the western part of the state, Lawless said Gottsch takes in feeder cattle from states without brand laws, meaning that a bill of sale or health papers are the only proof of ownership that come with a set off cattle they take in. That proof of ownership is seldom uniform, but it is filed at the feedlots.
“We have to pay to do business in North Platte, we pay a fee to have the brand committee come three or four times a year to come look at that file,” Lawless said. That’s not so for Gottsch’s lots east of the line.
Lawless has previously testified at the behest of Appropriations Chairman Sen. John Stinner of Gering, during an invitation-only joint hearing before the appropriations and ag committees in Fall 2019.
Stinner used that hearing as the basis for LB 1165, which would disband the brand committee, end inspection, and transfer recording and registry of brands to the Department of Agriculture. LB 1165 would also have swept away the nearly $3 million from the Brand Committee’s equity fund, which was paid into by cattle producers through the fees for services the brand committee provides.
LB 1200, the Brand Committee’s alternative to LB 1165, contained a far more generous RFL fee scale, reflecting the nature of the auditing service that the committee inspectors provide while shifting more of the cost for local inspections onto the cow/calf producer. However, the Beef Producers balked at this olive branch during testimony in Lincoln this past spring, arguing that the fees do not allow for western Nebraska to be on a competitive footing with surrounding states and the feedlots east of the inspection line.
THE COST OF DOING BUSINESS AND OPEN MARKETS
Ryan Creamer, owner and operator of Creighton Livestock Market, in Creighton, which is located right on the line of the inspection area in Knox County, was invited by the Livestock Marketing Association to give his perspective on the brand law.
Knox County has the distinction of being a split-inspection county, with some townships having opting out of joining the brand-inspection area. While brand inspectors still service the non-mandatory area and investigators track cases of stolen or missing cattle throughout the entire state, the invisible line creates an onerous barrier to commerce.
“Two miles south and nine miles east, you’re out of the brand area,” Creamer said.
Creamer said that because his barn is not given open market status, he loses business to barns outside the inspection area because producers to the south and east of the line sometimes lack the sufficient proof of ownership in order to sell at his barn.
“I know the brand committee’s goal is to not impede commerce, but for the people outside the brand area (the committee) impedes commerce,” he said.
Meanwhile, across the state border from Knox County, Creamer said that the commission at a barn in southeast South Dakota, is the same as at Creighton, but the dollar-per-head brand inspection fee dissuades customers from doing business.
In 2013, Creamer testified on LB 60, introduced by then-Sen. Tyson Larson, of O’Neill which would have removed Knox County from the mandatory inspection area. Also introduced that year was LB 654, by then-Sen. Al Davis of Hyannis, which would have expanded the brand inspection area to the entire state. Both bills could have provided a potential remedy to those situations, but neither mustered enough support to become law.
The Dairy Industry
“Dairy cows are never going to be branded again,” said David Wolfe of Wolfden Dairy south of Kearney. Wolfe also sits on the board of directors for the Nebraska State Dairy Association.
Since the late 1980s, animal rights activists have used the dairy industry as a wedge to ban the practice of branding cattle. Similarly, docking tails, which was a practice to help reduce rates of udder infection in dairy cows, has also been largely abandoned due to pressure from outside the industry.
“I’m not against the brand, and out further the west there is a need for it,” he said.
Most of the dairies in Nebraska are east of the brand inspection area; however, some western Nebraska dairies take heifer calves south to Texas and Kansas for backgrounding. While the dairy retains ownership, the unbranded calves still need a brand inspection before leaving the inspection area. Wolfe questioned if those inspections were worth the cost to the committee.
And while some producers have advocated for growing the dairy industry in Nebraska by establishing heifer ranches in the western end of the state to supply stock to dairies, when the subject of brand inspection comes up, those plans tend to change quickly.
However, the exemption for dairies, while it would make logical sense, won’t come under current brand laws due to a lack of distinction between classes of cattle in the current brand law.
“The statute says ‘bovine,’” Brand Committee Chief Investigator Dave Horton said.
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