North Dakota: Interim committee to study Beef Commission
A twenty member interim ag and natural resources legislative committee will review the North Dakota Beef Commission this summer.
The commission and its makeup and operations came under scrutiny during the 2021 legislative session when Senator Ertelt, a Republican from Lisbon, filed a bill to make the state Beef Checkoff voluntary. The bill died by a narrow margin in the House, with all House members who identify themselves as ranchers voting in favor of the change to make the state Beef Checkoff voluntary.
The current statute requires that whenever North Dakota cattle change ownership, the seller must remit $1 per head to the state. If the seller chooses to obtain a refund, he or she must request a refund form within 60 days of the sale and then follow the proper refund procedure within 90 days of the sale. This state Checkoff is in addition to the mandatory $1 per head federal Beef Checkoff, of which half is automatically sent to the national Cattlemen’s Beef Board, and half is retained by the North Dakota Beef Commission for promotion, research and education.
One of the members of the House Ag Committee who voted in favor of the bill, Dwight Kiefert, a Republican from Valley City, said he thinks cattle producers should have the right to choose whether or not they contribute to the state Beef Checkoff.
“If people want to donate, I think it is their choice, they shouldn’t be forced,” said Kiefert, a farmer, who was chosen to sit on the interim committee that will review the commission.
“I don’t think they should be forced to participate in something they don’t believe in. They say it is easy to get the money back but we heard just the opposite from producers.”
North Dakota producers did not vote for a state Beef Checkoff. Legislators approved it in 2015.
Dennis Johnson, the chairman of the Republican House Ag Committee, and a farmer from the Devils Lake area, carried the 2015 bill to add a $1 mandatory refundable state Beef Checkoff.
Johnson was chosen to serve as vice chairman of this summer’s interim ag committee that will study the North Dakota Beef Commission.
He is concerned that if the state Beef Checkoff becomes voluntary, it will affect the other checkoff programs in North Dakota.
Some producers including the Independent Beef Association of North Dakota are vocal about their concern with state Beef Checkoff dollars being sent to the Federation of State Beef Councils, a committee of the National Cattlemen’s Beef Association which is an organization they believe doesn’t support issues to help independent cattle producers’ profitability. “I just don’t see that. If we go down that road, we’ve got all the other commodity groups watching. Everything is going smooth with the commodity groups,” he said.
“When I carried the bill to increase the Checkoff I was warned that I was getting into a hornet’s nest,” he said.
“At the end of the day, it did pass, I said ‘it’s got to be where you can get your refund.’”
“I’ve been told it’s not that hard to get a refund. That’s part of what I want to see,” he said.”
Johnson said that there was a lot of testimony in the hearing last February over the bill to make the state Beef Checkoff voluntary. “We certainly had participation this time in the hearing. I knew there would be a lot of people but we didn’t even have enough time to let everyone speak. I thought, we’d better look at it over the summer to see how we can resolve this instead of doing it in a couple hours in a hearing.”
The nine-member North Dakota Beef Commission, by law, is composed of:
4 members of the North Dakota Stockmen (three producers, 1 feeder)
1 member of the milk producers association
1 member of the livestock marketing association and
3 at large members
A brief Google search indicates that all three of the at large members on the board are directly involved in the North Dakota Stockmen’s Association (NDSA) and/or the North Dakota CattleWomen, which is an auxiliary to the NDSA.
North Dakota law allows for each member to serve up to two, three-year terms.
According to the North Dakota Governor’s website, three members’ (Fred Helbling, NDSA appointee, Sharon Kickertz-Gerbig, at large member and Matt Lachenmeier, livestock auction barn appointee) first terms are expired as of June 30, 2021. Each will be eligible for a second term.
State law requires that each member of the commission except the auction market representative “must be a participating producer,” which is defined as being “actively engaged,” meaning the individual “1. has an ownership interest in an operation that is of sufficient scope and significance as to constitute a distinct activity and 2. Has and regularly exercises direct control of the operation.”
The North Dakota legislative council told TSLN that there is no official definition of what a “distinct activity” means in this case. The governor’s office has not responded to TSLN’s questions about whether or not the governor confirms that nominees meet these qualifications when their names are submitted for nomination.
North Dakota’s Secretary of Agriculture, Doug Goehring, which is an elected position (not appointed by the governor) told TSLN that he doesn’t know whether or not the governor verifies the qualifications of the nominees before making appointments. He added that he believes the appointments should be made by the Secretary of Agriculture rather than the governor.
He also said that some good nominees are likely being passed up because of their viewpoints. “It is for political reasons that people aren’t being put on boards,” he said.
North Dakota law prohibits producers who request a refund from being considered for the ND Beef Commission. While the state Beef Checkoff is refundable, the federal Beef Checkoff is not, and the state retains half of the federal Beef Checkoff dollar. Because of this, all cattle owners contribute to the North Dakota Beef Commission budget, even if they obtain a refund of state Checkoff dollars.
It is possible that a member of the NDBC (or those who are eligible for NDBC seats) contribute less per year, including their federal and state Beef Checkoff remittance, than a rancher who obtains his or her state Checkoff refunds. For example, if a rancher owns 300 head of cows, even if all of his state Checkoff contributions are refunded, the North Dakota Beef Commission still has around $150 of federal Checkoff dollars he or she contributed (half of the $300 federal Checkoff dollars he or she must remit). If a rancher owns 50 cows, and contributes to the state checkoff in addition to the mandatory federal checkoff, he or she is contributing about $75 annually to the North Dakota Beef Commission ($50 for the state Checkoff and $25 for the federal Checkoff).
In other words, it is possible that some of the largest financiers of the NDBC are not eligible to serve on the NDBC simply because they are requesting their state Checkoff refunds.
Frank Tomac, a Sioux County rancher, has never requested a refund of his state Beef Checkoff dollars, in order to be eligible to serve on the commission.
He has submitted references to support his application, but he said his references have never been contacted.
Kiefert said the struggle with ag issues even in a rural state like North Dakota is that very few of the legislators are actively engaged in agriculture anymore.
“A lot of them aren’t involved and that’s the trouble. There are getting to be fewer and fewer farmers so there is less representation. Sometimes what sounds good to them can be awful, but it sounds good,” he said.
Kiefert said one concern of his is the percent of the state Beef Checkoff dollars being used for administrative expenses. “We’ll take a hard look at what the money is being used for. How would you like it if they take money from you?”
Many complaints in testimony for the bill to make the state Checkoff voluntary this spring centered around the amount of money sent to the Federation of State Beef Councils, an arm of the NCBA.
According to the NDBC, it sent over $280,000 of a $1.5 million budget directly to the Federation of State Beef Councils, and spent another approximately $444,000 on research and promotional projects handled through the Federation.
As for the projects that the NDBC decides to fund, immediate past chairman, Weston Dvorak from Manning, said that the commission doesn’t send out a call for projects, but takes requests as they come in. “The ones we funded previously, we try to get them to send an RFP (request for proposals) prior to the budgeting meeting. The new ones, we take them as they come in.”
At a recent NDBC meeting, where it was reported that the NDBC finances projects to advertise USA beef overseas, TSLN asked if the NDBC funds projects promoting USA beef domestically. While some members believed this would conflict with the Beef Act and Order, it was agreed that promoting USA beef is possible, but the commission would be required to jump through hoops. It appears that no projects currently promote USA beef or North Dakota beef.
The NDBC does not have an estimated return on investment on the projects it funds for international promotion.
Some projects such as the Military Appreciation meal include serving beef. Dvorak said the commission does not require that North Dakota beef be used for such events.
“It’s nice to use local butcher shops,” he said, but added, “There are only a certain number of places to get beef.”
Some witnesses testifying this spring in the House Ag Committee expressed frustration about too little information being made available about how their checkoff dollars are being spent.
The NDBC told TSLN that it does not intend to alert the media regarding upcoming meetings, but that they are posted as required on the Secretary of State website. Upon request this spring the NDBC has e-mailed the TSLN with meeting alerts in a timely manner. The meetings are open to the public but do not allow for phone-in listeners.
“We have four meetings per year where we meet in person,” said Dvorak. “If they feel that strongly, they are allowed to participate (by attending a meeting). We sit on the commission, we are making a sacrifice. When I get off the commission, if I’ve got issues going on, I’ll make time to attend the meetings,” he said.
Print advertisements designed to reach producers were published in the Farm and Ranch Guide’s Livestock Guide and the ND Stockman Magazine at a value of about $17,600.
The NDBC is working on website updates to improve the refund process. “I think transparency is a good thing,” said Dvorak. “For those who want to dig into the financials more, they can do an open records request.” He added that it would be nice to have a location online where people can find more information about the NDBC because it takes a lot of staff time to respond to such questions.
The North Dakota interim agriculture and natural resources committee’s first meeting has not yet been scheduled.
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