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Nebraska ag producers pay nearly 50 percent more than the national average in property taxes

Nobody likes taxes, but Nebraska farmers and ranchers have even more to dislike than many others around the country.

According to a study by J. David Aiken, Nebraska agriculture property taxes are among the highest in the United States. Over the last three years, Nebraska farmers and ranchers have paid nearly 31 percent of their net farm income as property taxes (47 percent in 2017). Aiken, an agriculture and Water Law Specialist Department with the agricultural Economics University of Nebraska-Lincoln, said that when state and federal taxes are factored in, this represents an effective tax rate of more than 50 percent (over 60 percent in 2017.) Nebraska property taxes on agricultural land as a percentage of net farm income are 146 percent of the United States average (1950-2017 data). The twenty year average is 150 percent, the ten year average is 147 percent, the five year average is 164 percent and the three year average is 188 percent. Property taxes are the single largest tax paid in Nebraska accounting for 38 percent of total state and local tax collections.

The study revealed that sales taxes make up 29 percent of total taxes, and income taxes are 26 percent. Sixty percent of property taxes go to K-12 education funding. All property taxes fund local government—cities, counties, and local school districts. All income taxes and 84 percent of sales taxes are used to fund the state government. Currently with high ag land values across the state, 85 percent of state aid goes to non-agricultural areas and 15 percent is distributed across the board to all school districts. Two-thirds of Nebraska school districts (largely rural) receive little to no state aid.

In Nebraska in 2017, 42,502 farmers paid $686.5 million dollars in property taxes. On a per-farm basis, that breaks down to $16,151 each, second only to California with the average there being $17,229. The national average in 2017 was $4,902, according to data from the 2017 ag Census collected by Chris Clayton, DTN ag Policy Editor.

John O’Dea lives near McCook, Nebraska with his wife and sons. They are feeling the high tax rate, paying 9 dollars a year per acre of grass. More of his tax dollars are given to support Mid-Plains Community College than he can afford to give his own son, who is putting himself through Fort Hays State University in Hays, Kansas. This for him was a cheaper option than Southeast Community College in Nebraska.

“My sons were talking the other day and they agreed “The expense of being a Nebraskan is getting too high,” O’Dea said. “The state has turned into two liberal cities that expect the rest of the state to support them. Folks are having to work off the place to support the ranch. Who will feed and pay the taxes if they force everyone out. It is having a ripple effect on small towns and communities. Every ag producer that has to take a job in town is taking that job away from someone else. I’m 43 years old and I’m paying more for property taxes now than I did for rent when I started. Land in Nebraska is a liability.”

O’Dea feels that there will be some major changes made as producers attempt to refinance land and cattle in the next few years especially with land values going down. The O’Dea family is seriously considering moving their base of operation to a more ag friendly state in the near future.

“The death losses in Nebraska alone will more than offset what USDA estimated what the calf crop was set to increase in 2019. If calf and yearling prices are not considerably higher this fall, our supply and demand market is broken beyond repair. The cow calf expansion phase was at or near its peak, so these losses will pull us back into a shrinking phase in the cow calf sector,” O’Dea said.

Another Nebraska rancher, Karina Jones, said that on top of weather-related disasters, her state’s property taxes are overwhelming.

“Property taxes are like a second mortgage,” said Karina Jones.

The Jones Ranch in Custer County Nebraska has been hit hard by nature and in a way kicked repeatedly while they were down.

“Our situation is unique. We endured the hailstorm in August of 2017 we had to wean calves immediately and start feeding cows on August 13. We didn’t have a blade of grass left on this ranch,” she remembers. By early December of that year, they were running out of feed, and they were forced to send all of the mother cows to be fed by someone off the ranch. “We fed cows from Aug 13, 2017 to June 1, 2018,” Jones said.

Jones believes the state is taking advantage of ranchers like herself and her husband.

“You would think the government would value people like us. We have a particular skill set that can not be taught in a classroom. You can not learn how to be a rancher from Google. It is generations of DNA intelligence. When they put us out of business, it is all lost. Society won’t be able to get that back. We have a particular skill set to feed the world and I can not think of a more noble profession than that,” Jones said. “It doesn’t matter if you own the ground or lease it. The cost of these high taxes is carried by the producer, the cow/calf man or the yearling guy. With the poor cattle markets the last few years we cannot support this tax burden. I do not know the last time I bought my girls a special sports drink at the supermarket line or convenience store. I cannot afford extras!”

The Jones are not a multi-generational operation. “We do not have the working capital of the generations before us to lean on. It all falls squarely on our shoulders, just like many other operators around us. It is a big load to carry,” Jones said.

The Jones’ had insurance on their home but hay loss from the hail storm was not covered because hail is a non-covered peril. The same with destroyed grass, trees lost, poor weaning weights on the calves that the cows had at side and poor performing calves that they had in utero. “We just want to raise cattle and kids. That’s all. We don’t want to take from anyone else. We want to give back and better our communities. We want to contribute fairly to our tax commitments. We want to feed our neighbors with a high quality product that we are proud to feed our own families.”

Jones would like to see some producer support meetings where others like her could share ideas. “We all need some good education and a place to be positive and focus on solutions. And yet we need a safe place to be heard. The bankers need us to stay in business,” said Leah Peterson of Custer County, Nebraska. “And none of us want easy; we just want a fair shot. Taxes take that away. As someone says, it’s like paying taxes on a 401K every year.”

Jim Scott, branch president of Bruning State Bank in Broken Bow, Nebraska said, “High property taxes are definitely a major issue due to the current ag economy and high expenses. There has been a depreciation of land values in the last 12 months, due to more land being sold and less profitability, people are looking to reduce debt load.”

“We need to even the tax burden on all citizens, like with a sales tax increase; we are waiting on the legislature to help. Producers need to get involved and pay attention to how money is spent,” Scott said.

Livestock Market Reports Week Ending July 14, 2020

MCOOL supporters rally

A few thoughts by John Nalivka: A vertically integrated beef industry – not likely

Vertically integrate the beef industry – that’s an interesting topic and one that has come up more than once. Before I go any further with my thoughts, I will say that it won’t happen and it shouldn’t happen. You might say that is a pretty strong statement. My response is that I base that statement on one key component of the beef industry that will rule out vertical integration – forage. The beef industry is a forage- based industry and that one distinction from the pork and poultry industries will hinder vertical integration.

Grassland pasture and rangeland represent a significant share of the total 1.9 billion acres that make up the lower 48 United States and this grazing resource is the foundation of the cattle industry which very efficiently converts that grass to beef. This is efficiency both in terms of the process as well as the cost but furthermore, this forage base creates a production base that is widely dispersed across the entire U.S., albeit most of the cows are located in the Central Plains from Canada to Mexico. While costs can vary widely across 729,000 cow-calf operations depending upon individual circumstances, cash costs associated with cattle, on average, are still a relatively low-cost foundation to the entire process. One condition to maintain this cost structure is grazing with the cows going to the forage as opposed to taking harvested forage to the cows.

The above-described situation is fundamental to beef production and I do not see that situation changing anytime in the near future. While there may be perceived economic incentive to manage the entire process, nearly half of that grazing resource is owned privately. As long as that grazing resource is held in private hands, the economic incentive is toward independent decision-making. And, I would add, that this independent decision-making when tied to consumer demand through sound negotiated grid pricing arrangements with premiums and discounts will create and support the best production and marketing decisions at the ranch. This is a far cry from vertical integration.

The Herd Sire

This is one of those stories that sounds so unbelievable that you’ll know I didn’t make it up!

Mike studied the bloodlines. He checked performance records. He knew his herd like the top two layers of his tool box! He was a good young cattleman. When he decided on the course of action to improve his herd’s genetics he called the breed association rep. They discussed his needs. Plans were made for the fieldman to attend a bull sale in Texas with the express instructions to buy exactly the right bull.

The call from Texas delighted Mike. The fieldman had bought in the perfect yearlin’ bull that would carry Mike’s cows into the 21st century. $10,000…for half interest. He agreed that the co-owner, a purebred breeder from Oklahoma, could use the bull that fall. Then he would ship him to Pine Ridge country of northwestern Nebraska in time for Mike’s spring breeding.

In February arrangements were made to put the bull on the back of a load going as far as Sterling, Colorado. The trucker would call Mike on arrival. Mike waited anxiously. Several days passed and nobody called. He called his partner only to find they’d left Oklahoma territory a week before! Feeling uneasy, Mike called the Sterling sale barn. “No?” “No,” they didn’t remember any bull. “Let us check.” They suggested possibly the bull Mike was lookin’ for had been bought by a trader!

“What’d he pay?” asked Mike.

“Fifty-six cents a pound.”

In a panic he tracked down the trader. He’d run the bull through the Brush sale. The trader said he broke even. Packerland had bought him as a baloney bull! Mike drove all night to Packerland in a desperate effort to save his bull! “No,” they said, “he was too thin to kill” so they’d sent him to a feedlot in Rocky Ford!

Mike smelled like burnin’ rubber and was chewin’ the upholstery when he boiled into the feedlot in a cloud of dust! The foreman was surprised but led him over to the receiving pens. There stood Mike’s future; road weary, coughin’ and covered with sale barn tags! Mike’s knees were shakin’!

“Nice bull,” said the foreman, “But ya cut’er close, sonny. Tomorrow evenin’ he’da looked a lot different without his horns and cajones!”

Lee Pitts: If Vets Were MDs

I think we take our large animal veterinarians for granted. Just think of how much worse it could be if veterinarians were more like medical doctors. Let’s say a bow hunter accidentally shot your cow in the rump. OUCH! Instead of getting almost immediate attention from your vet, you’d phone a number and be placed on hold listening to ear-splitting music for 20 minutes to schedule an appointment, because vets would no longer make house calls.

“We hear you have a problem with a horse,” says the receptionist on the phone days later.

“No, it’s a cow and some idiot shot an arrow into her rump,” I reply.

“That must hurt. But sorry, the doc is not taking any new patients at this time.”

“We’re not new. He’s been our vet for 25 years.”

“Oh, in that case the soonest we can squeeze you in is in four weeks.”

“You’re kidding? My cow is supposed to walk around with an arrow in her butt for a month?”

“Yes, the DVM is extremely busy because he’s now playing golf twice a week.”

Then the day before your scheduled appointment you get this phone message: “We’re very excited to announce that the doc has been invited to play in a pro-am golf tournament tomorrow. Please call our office to reschedule your appointment.”

Finally, six weeks after your cow was shot you load her up and arrive 15 minutes early to fill out the 24 page questionnaire the receptionist hands you. It asks things like, “Has your cow ever had an “STD”. You’re embarrassed to ask, so you whisper to the receptionist, “What is an STD?”

“In her loudest possible voice she practically screams, “sexually transmitted disease.”

This causes everyone in the waiting room to regard you in a new light. You pervert! Another question asks, “Besides you and your spouse, who should we contact in case of an emergency?”

You write down your sister-in-law’s name who’s a kindergarten teacher, although you doubt that she’s going to be much help in removing the arrow from the rump of your cow.

You wait in the waiting room reading four year old cow magazines and watching The View on TV. Your name is finally called and so you unload your cow to be looked at by a veterinarians’s assistant (VA) who takes the cow’s blood pressure, temperature, weighs her and offers a preliminary prognosis. “Your cow appears to have an arrow in her rump.” Then she asks all sorts of questions, including, “Does your cow have insurance?”

“She does but I don’t.”

“In that case we’ll only require a $500 office visit charge. Does the cow have a living will.”

“Well yes, she’s shown a really strong will to keep on living despite her lack of medical care.”

Then the VA says, “The veterinarian will be right in.”

An hour later you finally see the vet, Dr. Mallard (a real quack). He looks at your cow and says, “We’ll need to send your cow to several specialists. First to a gastroenterologist who’ll run a camera up her tailpipe to see if there’s internal damage. Here are several unreadable prescriptions and lab orders for several tests including fecal, blood and urine. We’ll need these to confirm that your cow has arrow-in-the-butt syndrome. Also, here are instructions to the imaging center, that I own part of, for an MRI, CAT scan, x-rays and end-oscopy. At some point you’re cow is going to require the services of another member of my golf foursome, Dr. Sawbones, who owns Shark’s Surgeon group. He’s an extremely average surgeon but happens to be my brother-in-law.”

Your cow eventually dies on the operating table despite several attempts to revive her with the cowboy defibrillator, a hotshot. On the cow’s death certificate where it says, “Cause of death,” instead of signing his name, Dr. Sawbones writes, “a negative patient outcome was the result of the cow dying of COVID 19.”

For the next two years you receive bills in the mail for things like “laboratory outreach” and “tallow works retrieval”. The final blow arrives from your cow’s insurance company that informs you that none of the charges will be covered because it was an “elective surgery.”

Varilek’s Cattle Call: Small Recovery

Open interest has been decreasing in the live cattle contracts for the last week. In my opinion, we have witnessed some short covering as prices stabilized in a range for the time being. Hedgers were not too happy with the price level to ride out a rally. However, I do not think we have seen a long speculator interested in diving into the market just yet. Currently we are not far enough through the summer for much follow through on rallies.

The north sits a bit more current than in previous weeks with the increased slaughter as the south still struggles to get caught up. Many fed steers are moving north on trucks filling slaughter capacity in other plants to help keep things moving along. It does hurt getting cash bids in the north, but we are starting to feel our way through this mess. Some analysts anticipate cash price to slowly increase.

Boxed beef prices have had a major correction from the spring spike. The high prices curbed too much demand, but beef should be available at much more affordable prices. Too many restaurants took beef completely off the menu with the uncertainty of availability. Our overall economy has held in better than expected and remains the wild card factor to whether beef can see a major recovery.

In the long run, we still see a decreased cow herd with opportunity some day down the road. Beef producers are starved for some cash flow after a gruesome ride from a plant fire to Covid 19. Feeder calf prices have seen a small boost here with some optimism for a better future. It could just be some fresh CFAP money diving back into the feeders. Keep the grills going as always.

Scott Varilek, Kooima Kooima Varilek Trading

The risk of loss when trading futures and options is substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Iowa Reps bring 50/14 companion bill

Three of the four Iowa Representatives introduced a bill on Thursday to require packers to procure 50 percent of their weekly slaughter needs on the cash market, and for them to take delivery on all cattle within 14 days of purchase.

The bill is similar to one Iowa Senator Chuck Grassley, a Republican, introduced earlier this spring.

Representatives Cindy Axne, Abby Finkenauer and Dave Loebsack, all democrats, said that in their state, participation in the cash market is higher than the national average – often as high as 50 percent, but that in many other areas of the country as little as five percent of cattle are purchased on the spot market.

Nationally, it is estimated that about 20-25 percent of fat cattle are purchased on the cash market, with the remainder being contract agreements that are mostly based on the cash sales.

Iowa cattle feeder Eric Nelson said that with both senators and three of four representatives on board with the 50/14 issue, which is intended to provide for more transparent value discovery of finished cattle, it is clear that the Hawkeye state has been harmed by anti-competitive practices in the livestock industry.

“Go to any small town in Iowa and ask them if the small towns are more dynamic now than they were 25 years ago before the consolidation of the hog industry. They will laugh at you,” he said.

“Integration of livestock doesn’t bring more wealth to main street, it sucks it out.”

The 50/14 rule would hopefully slow the integration of the cattle industry, said Nelson, by mandating that at least half of all sales must be conducted in a bidding situation, not a private agreement. This action should provide more public information about cattle prices.

“I have a report that shows that in regions where there are more bidders for cattle, the prices are higher,” he said.

Nelson said that during the COVID-19 pandemic, independent feeders like himself and many others in Iowa have struggled to get bids for cattle. He said the packers have been slaughtering cattle procured through forward contracts, but are buying very few on the open market.

“In a normal year, they would buy a big chunk of cattle in this geography, but I only know of two feeders who have delivered cattle to Tyson in recent months,” he said.

“If something doesn’t happen, a bunch of guys like me will be done,” he said. If the remaining independent feeders are unable to remain profitable, price discovery will be essentially non-existent, he said.

Nelson, who once fed hogs, says cattle folks can learn from what that industry has been through.

“We don’t want an industry that is integrated like the hogs and poultry. When you get down to 10 percent negotiated trade, you don’t even know where the price is.”

Nelson said hog prices haven’t improved – in fact, according to a Pork Checkoff graph, hog prices were lower in 2016 than they were in 1984 – so hog producers are being forced to operate on tighter and tighter profit margins.

The cattle industry is headed that way if changes aren’t made quickly, he believes.

“We’re being so efficient, we’re losing equity to sell cattle. The reason we can sell hogs and even cattle so cheaply is that we’re losing equity. Is that efficient? We’re doing it for less money, but who is winning? It’s not the consumer and it’s not the people like me who are feeding them for a loss.”

R-CALF USA has voiced support for the 50/14 bills, and USCA commended Grassley for his bill in May. The Nebraska Cattlemen’s and Iowa Cattlemen’s Association were on board with Grassley’s bill. Regarding the house version, the Iowa Cattlemen said recent events have served to accentuate the need for a more equitable seat at the table for all producers.

“Iowa’s cattlemen know that true price discovery comes through competitive bidding and cash trade. The proposal outlined in this bill will help return some much-needed leverage to independent cattle producers in Iowa, and across the nation. The Iowa Cattlemen’s Association sincerely appreciates Congresswoman Axne, Congresswoman Finkenauer, and Congressman Loebsack for their leadership and willingness to engage on this important issue,” said Iowa Cattlemen Association President Richard Godfrey.

Axne, the main bill sponsor, said leveling the playing field for Iowa cattle producers is crucial.

“We’ve seen significant market disruptions from the Holcomb plant fire last year or more recently from COVID-19 that illustrate the need for this legislation,” said Rep. Axne. “This is not a new problem that Iowa cattlemen have been facing. With nationwide decreases in cash trades, Iowans have been bearing the burden of price discovery for the rest of the cattle industry and it’s about time we address the issue. These reforms will help establish a fair and transparent market for all independent producers, and I’m proud to lead this fight in the House of Representatives.”

Kansas Senator Pat Roberts who serves as the chairman of the Senate Ag Committee, has not yet scheduled a hearing for Grassley’s bill which was introduced in May.

“The concern I hear from Iowa farmers the last couple months is that the coronavirus has put them on the edge of bankruptcy,” Grassley told rural reporters in June. “Beef producers are having trouble getting a bid on their cattle,” he added, in a Hagstrom story.

Grassley said Roberts is opposed to the bill, but Roberts did not respond to a request for comment by The Hagstrom Report.

“I am looking for every opportunity to get this done. These farmers are hurting,” Grassley said. “There is no reason this should be controversial at all. We’ve just got to get it moving.

“United We Steak” Encourages South Dakotans To Grab Their Favorite Beef Cut and Fire Up The Grill

PIERRE, SD- South Dakota is partnering with Beef. It’s What’s For Dinner., funded by the Beef Checkoff, to launch “United We Steak,” a new summer grilling campaign showcasing 50 steaks and all 50 states.

“United We Steak” celebrates not only a shared tradition of grilling delicious steaks, but also what makes each state unique when it comes to this beloved pastime. The idea comes to life at UnitedWeSteak.com with an interactive map of the United States made from 50 hand-cut state-shaped steaks. The interactive map is packed full of grilling spirit, state-specific recipes and fun facts that can help consumers nationwide “beef up” grilling season this summer.

Underpinning the campaign is a recognition that across all 50 states, there is a universal love of beef sizzling on a summer grill. According to research conducted by Beef. It’s What’s For Dinner., which is managed by the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff, nearly one-third of consumers say that they plan to grill more this summer than they have in the past.[i]

While every state has their own unique footprint when it comes to sharing their beef story, we all gather together around the grill! When it comes to grilling beef, South Dakota’s sirloin kabobs continue to be a crowd pleaser and are a feature recipe found on UnitedWeSteak.com.

“There’s nothing like the sound and smell of beef sizzling on the grill during the summer grilling season,” said Suzy Geppert, South Dakota Beef Industry Council’s (SDBIC) Executive Director. “United We Steak’ not only celebrates a love for grilling that brings families together, but also the beef farmers and ranchers who work hard every day to keep beef on grills all summer long.”

As part of the campaign, the state and U.S.-shaped steaks will be featured in national advertisements, including still images and videos that will be shared on digital and social media platforms. The advertisements will also be shared on video platforms including YouTube and Connected TV in an effort to inspire Americans to grill up their favorite beef meal no matter where they live.

South Dakota is getting in on the fun too with a localized Great Faces, Great Places, and Incredible Beef extension campaign that places a spotlight on all segments of the food system from local beef farmers and ranchers all the way up to the retail and food service sector as grill masters from across the state are inspired to select beef for their summer grilling go to protein. The SDBIC will also be providing retail toolkits, advertisements, and outreach opportunities that include even our youngest advocates as the SD. Jr. Beef Ambassadors join in the fun!

More beef grilling inspiration and information can be found at United We Steak and BeefItsWhatsForDinner.com. To learn more about the South Dakota Beef Industry Council and South Dakota’s Beef Checkoff program visit www.sdbeef.org.

–South Dakota Beef Industry Council

Checkoff Checking out? Groups, individuals seek enough petitions for Beef Checkoff referendum

A number of groups and individuals launched an Online petition to gain the signatures needed to require USDA to conduct an “up or down” vote of cattle producers over the Beef Checkoff.

The petition, which was made public July 6, 2020, must be signed by a minimum of 10 percent of the number of cattle producers nationwide. According to USDA 2017 census data, 882,692 cattle producers exist, which means 88,269 eligible signatures will be needed on the petition in order to propel USDA to carry out a referendum of producers nationwide on whether or not to terminate the Checkoff.

A producer’s signature on the petition is not a vote to end the Checkoff, but rather, it is a show of support for requiring USDA to provide a referendum that will allow for a vote to terminate the Checkoff. The referendum will only take place if the sufficient number of signatures is gathered in a one year time period.

The Beef Promotion and Research Act, passed in the 1985 Farm Bill, provides for the referendum option, provided 10 percent of producers agree to request it. The Act says the referendum may either allow producers to vote on suspension of the Beef Checkoff, or termination of the Beef Checkoff. The petition in place is seeking a referendum on the termination of the Checkoff.

Ft. Pierre Livestock owner and president of the South Dakota Livestock Auction Markets Association, Bryan Hanson said he is hoping for at least 150,000 signatures on the petition, to ensure that there are extras.

Hanson said he wasn’t alone in putting together the online petition. Producers and salebarn owners from across the country teamed up. He particularly notes Steve Stratford, Stratford Angus, and assistant manager at Pratt Livestock in Pratt, Kansas.

Stratford said that although, in 1984, US ranchers were “beef producers,” they are now “cattle producers.”

“In the last 15 years or so, ranchers and packers have been in competition with one another. I don’t think we can be represented by the same dollar,” he said because of consolidation at the packing level, foreign ownership of meatpacking companies, and increasing percentages of imported beef and cattle.

Stratford points out that producers have steadily lost their share of the retail margin. He supports the concept of a checkoff that does something different.

“If we could figure a structure and way to manage it so it doesn’t get eaten up with bureaucracy, salaries and conventions and so it fights for producers, yes, I think it could be $2 or $3 dollars, if we used it to fight for producers’ market share,” he said.

Stratford said Nick Nesson of Mt. View Ranch, Tennessee, did the legwork with USDA to get the petition up and running.

Twenty years ago, the national Livestock Auction Markets Association gathered signatures for a Beef Checkoff referendum, but almost 40,000 of the signatures were not accepted by USDA. Hanson said he and the other petition supporters don’t intend to let that happen this time.

In the 2000 petition drive, support for the referendum was strong in South Dakota, with nearly half of eligible producers signing the petition.

Nearly every South Dakota auction barn, along with state and national organizations such as the South Dakota Stockgrowers Association, Independent Cattlemen of Wyoming, Colorado Independent Cattle Growers Association, Independent Beef Association of North Dakota, Independent Cattlemen of Nebraska, Buckeye Quality Beef Association, R-CALF USA and more signed a letter to inform USDA of the petition.

Hanson said he personally hopes the referendum succeeds in ending the Checkoff.

“My intent is to kill it. That’s why we’ve gone forward with putting a petition together. They claim there are 80 percent of producers in favor of it. I want a vote to see if that’s true.”

Hanson said he rarely talks to a producer who supports the Checkoff. One reason he personally wants to terminate the program is because the Beef Checkoff does not promote USA beef in the United States.

R-CALF USA Checkoff Committee Chairman Vaughn Meyer agrees, and so do the members of his organization. “We want to promote USA beef, which was the intention of the Checkoff in the first place,” said Meyer.

Additionally, the current Checkoff is “non-functional,” said Meyer, the owner of Sodak Angus, Reva, South Dakota, citing declining producer numbers and lessening consumer consumption of beef. Meyer also points out that, based on the results of a recent R-CALF USA lawsuit, it was discovered that several state beef councils were being mismanaged and utilizing private speech, even though the Checkoff, according to the Supreme Court, produces “government speech.”

While some organizations might say that the Checkoff can be tweaked, rather than shut off “cold turkey,” Meyer, said he and others have put significant efforts into this very thing.

“I’ve tried changing it. Personally. I sat on the state beef council for 11 years, and on the Cattlemen’s Beef Board for six years. The way the Act and Order is set up, we don’t have the power to make changes within because of the fact that the NCBA controls the operating committee.”

The National Cattlemen’s Beef Association is the biggest Beef Checkoff contractor. The organization was granted around $27 million last year for project proposals submitted. The organization has a number of staff members dedicated solely to carrying out the beef promotion, research and education projects it bids for. An additional approximately $10 million in Checkoff funds are generally submitted to the NCBA’s federation committee from state beef councils.

NCBA’s president, Marty Smith, a Florida cattle producer and attorney said that the petition effort is “troubling,” and that if the petition succeeds in forcing an up or down vote of producers, it will waste valuable Checkoff dollars. According to the law, Checkoff funds must compensate USDA for the cost of conducting a referendum.

“Early estimates are that we’ll spend $250,000 or maybe more, we’d rather see that being used for research or advertising,” he said.

It would be a surprise to learn that producers don’t support the Checkoff, Smith said. “Given the regular surveys and polls as part of the Checkoff program, we’re showing consistently 85 percent approve of the Checkoff and support it,” he said, adding that even regionally, NCBA has never seen a poll or any survey results that would indicate any type of large number of cattle producers upset with the program.

Smith said that according to a study the Checkoff is required to conduct annually, the Beef Checkoff returns producers about $13 per head, so he figures that without the Beef Checkoff, the industry would see about $1 billion in adverse impact every year.

Justin Tupper who manages South Dakota’s St. Onge Livestock Auction and serves as the president of the United States Cattlemen’s Association said his group, at this time, does not support a referendum to end the Checkoff.

“We would like to see some reform, but we’re not going to sign on to getting rid of it at this point,” he said.

USCA obtained a contract for over $300,000, via the CBB this year to study consumer meat demand, along with Kansas State University.

The Checkoff

According to the Beef Promotion and Research Order, the rules under which the Checkoff operates, cattle owners must remit $1 every time a beef or dairy animal changes ownership. In most cases, state beef council organizations collect the funds. The state organizations are required to send $.50 of every dollar to the Cattlemen’s Beef Board, a group of representatives appointed by the US Secretary of Agriculture, who oversee the management of the funds. State beef councils can use the remaining $.50 to fund programs of their own. Many of them remit a portion of their half of the funds to the NCBA’s Federation of State Beef Councils, where they are able to asecure board “seats” based on the amount of money submitted.

There is no standard setup for the state beef councils, and the recent R-CALF USA lawsuit pointed out that, while federally-mandated Checkoffs are considered “government speech” because they are under USDA oversight, some of the state beef councils were not under government oversight, which means they were not producing government speech. R-CALF asked the court to declare these state beef councils unconstitutional. The Montana Beef Council, the first one in question, was required for a time to stop retaining their portion of the Checkoff unless approval had been granted by the payer (during this time, the entire $1 was forwarded to the national level CBB). As a result of the lawsuit, the USDA produced a Memorandum of Understanding with the state beef councils in question, including Hawaii, Indiana, Kansas, Maryland, Montana, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Texas, Vermont, and Wisconsin to ensure that USDA is now overseeing their research, promotion and educational activities.

Hanson said all signatures will be gathered electronically, and he and his staff at Ft. Pierre Livestock are available to help anyone who might need it.

“I have a tablet device on the counter at the salebarn, and I encourage other salebarns to do the same.” Hanson said his office staff will help anyone wanting to fill out the form.

Any touch screen such as an apple phone, an android phone, or a tablet can be used to sign the petition, using a finger or a stylus pen he said. Home computers can also be used, and the signer will use a mouse to create his or her signature.

NCBA’s Smith urges caution.

“I would ask anyone looking at this, let’s look at the facts and not just the rhetoric. One thing we’ve developed is the export market,” he said, and even in today’s environment of record high boxed beef prices and low fat cattle prices, Smith believes there is evidence that meatpackers pay more for live cattle when they make higher profits on the beef they sell.

Meyer, however, says ending the checkoff will ultimately help American ranchers. “This Checkoff was sold to producers as a way to promote USA beef. We never intended for it to promote generic beef,” said Meyer.

Producers deserve “a seat at the table” to make decisions about how Checkoff dollars are spent, Meyer said. “We’re not seeking reform, we’re seeking an up or down vote. We’ve tried before and the only way to get a new Checkoff is to kick it out and start over.”

Those interested can go to: www.WeNeedABeefCheckoffVote.com to sign the petition.

Judge orders Dakota Access Pipeline shut down amidst review

In a major decision affecting the oil industry and Indian tribes, a federal judge today ordered the owners to shut down an underground crude oil pipeline that begins in the shale oil fields of northwest North Dakota and continues through South Dakota and Iowa to an oil terminal near Patoka, Ill.,

Judge James Boasberg of the U.S. District Court of the District of Columbia ordered the Dakota Access Pipeline shut down by August 5 on the grounds that the U.S. Army Corps of Engineers violated the National Environmental Policy Act when it granted an easement to Dakota Access, LLC to construct and operate the pipeline beneath Lake Oahe in North Dakota without an Environmental Impact Statement “despite conditions that triggered such a requirement.”

The Standing Rock Sioux and Cheyenne River Sioux tribes had sued the Corps to invalidate federal permits allowing the pipeline to carry oil under the reservoir, located behind a dam on the Missouri River and stretching between North and South Dakota.

“The shutdown will remain in place pending completion of a full environmental review, which normally takes several years, and the issuance of new permits. It may be up to a new administration to make final permitting decisions,” Earthjustice said in a news release.

“Today is a historic day for the Standing Rock Sioux Tribe and the many people who have supported us in the fight against the pipeline,” said Chairman Mike Faith of the tribe. “This pipeline should have never been built here. We told them that from the beginning.”

“It took four long years, but today justice has been served at Standing Rock,” said Earthjustice attorney Jan Hasselman, who represents the tribe. “If the events of 2020 have taught us anything, it’s that health and justice must be prioritized early on in any decision-making process if we want to avoid a crisis later on.”

Sen. John Hoeven, R-N.D., said, “The Dakota Access Pipeline is vital energy infrastructure for North Dakota and our nation. The pipeline is equipped with the latest safeguards and technology, and after undergoing years of thorough state regulatory reviews and an extensive federal environmental assessment, it has been operating safely since 2017.”

“Today’s district court ruling comes at a very difficult time because it will severely impact our state’s economy at the same time we are working to recover from the impacts of the COVID-19 pandemic,” Hoeven said.

“We anticipate the company will appeal the decision to the Circuit Court which should allow the Dakota Access Pipeline to continue to operate while the Army Corps of Engineers works to finalize its environmental impact statement.”

Sen. Kevin Cramer, R-N.D., said, “Shutting down the Dakota Access Pipeline would have devastating consequences to North Dakota and to America’s energy security. This terrible ruling should be promptly appealed.”

–The Hagstrom Report