The Cattlemen’s Beef Board (CBB) has just released the beef checkoff budget for FY2024, which allocates $38 million collected from producers through mandatory fees on the sale of their cattle. Every year since 1996, the largest share of checkoff funds — more than $25 million this year — has been awarded to the National Cattlemen’s Beef Association (NCBA).
Why has the NCBA received the lion’s share of ranchers’ dollars for nearly thirty years running? The answer lies within a convoluted system of industry relationships and federal law: By seizing control of the committee that awards checkoff contracts, NCBA has rigged the system to pour ranchers’ dollars into its own pockets.
Who’s in Charge of Checkoff Funds?
The official, original purpose of checkoff programs was for farmers to pool their money to fund research and promotion of their product. The federal checkoff program doesn’t conduct research and promotion itself, but instead contracts this work out to industry trade groups.
Here’s a quick rundown of the players in the checkoff contracting game:
Cattlemen’s Beef Board (CBB): Created by statute with USDA-appointed members, CBB approves the annual budget for national checkoff programs.
Beef Promotion Operating Committee (BPOC): A committee within the CBB that controls who can contract with the checkoff and allocates checkoff dollars.
National Cattlemen’s Beef Association (NCBA): A national trade and lobbying organization for the beef industry, NCBA counts McDonald’s and Cargill among its members — but only 3% of independent cattlemen.
Qualified State Beef Councils (QSBCs): Collectors of checkoff money in their respective states, QSBCs retain up to 50 cents per dollar.
Federation of State Beef Councils: Created by the Beef Promotion and Research Act and acquired by NCBA in 1996.
The flow of beef checkoff money is managed by the CBB, and nestled within the CBB is the BPOC. Federal law grants the BPOC sole discretion in allocating checkoff funds and determining who wins the contracts to spend checkoff money. This committee is composed of ten members from the CBB and ten members from NCBA’s Federation of State Beef Councils.
A Look Behind the Curtain
The “Federation of State Beef Councils” sounds like an independent group of cattle producers freely representing the interests of their respective states — but in reality it is just a division of NCBA.
You read that right: A lobbying group that bids on government contracts ALSO controls 50 percent of the committee that awards those contracts.
Here’s how that went down: The Beef Promotion and Research Act of 1985 directed what was then called the “Beef Industry Council” — a group of state checkoff representatives — to send 10 members to the BPOC, where they would create the national checkoff budget alongside 10 representatives from the national checkoff program. But in 1996, NCBA seized control of this Congressionally granted power by executing a USDA-approved merger with the Beef Industry Council.
That’s not the only mechanism NCBA has created to accrue more power and money. These days, NCBA requires representatives from Qualified State Beef Councils to buy seats if they wish to join this Federation. This is essentially a pay-to-play scam — and members can buy as much power as they can afford. For example, the Kansas Livestock Association paid more than $2,000,000 for nine of the committee’s seats in 2016, destroying any pretense of national representation.
Federation members can pay for these seats with checkoff money: QSBCs keep fifty cents of every beef checkoff dollar collected from the sale of cattle in their state. They then turn around and pay that money to NCBA to join the Federation — guaranteeing NCBA’s control of the beef checkoff contracting process and funneling additional millions of beef checkoff dollars into their pockets.
So, to recap: Under the law, the CBB can’t allocate checkoff funds in a way the Federation — controlled by NCBA — doesn’t support. Which means that ultimately, NCBA controls the flow of money from the checkoff.
NCBA: Big Beef in a Cowboy Hat
NCBA expends its considerable resources and powerful influence on lobbying initiatives, working to defeat policies that would threaten the dominance of multinational meatpackers while improving competition and market opportunities for independent producers. In 2015, NCBA successfully lobbied to kill Mandatory Country of Origin Labeling (MCOOL) for beef, which was a powerful marketing tool for independent American ranchers to distinguish their products from lower quality imported meat sold by giant meatpackers like JBS or Cargill.
Their more recent efforts to defeat the bipartisan Opportunities for Fairness in Farming (OFF) Act are clearly motivated by self-interest: The OFF Act would prevent checkoff funds from being awarded to lobbying groups, and 70 percent of NCBA’s budget is derived from checkoff funds.
Ranchers know very well who NCBA works for and matters to them, and in fact, only three percent choose to be dues paying members. Still, the government forces the other 97 percent to fund NCBA through checkoffs.
As a contractor, NCBA is not supposed to use their checkoff funds to lobby, but historically there has been notoriously lax government oversight. Still, even if NCBA does follow this particular law, the undue influence they wield on Capitol Hill as the primary checkoff contractor is just as powerful as money
Getting the Foxes out of the Henhouse
It of course makes no sense that NCBA has the power to allocate farmers’ dollars into its own pockets, particularly when they’re working against our interests. Any other government program would have basic safeguards. Checkoffs don’t.
Our political affiliate Farm Action Fund has endorsed the OFF Act, which would bring much-needed transparency to the tangled web of the checkoff. More than 60 farm groups representing more than 200,000 independent farmers and ranchers have called for the OFF Act to be included in the 2023 Farm Bill.
TAKE ACTION TO REFORM CORRUPT CHECKOFF PROGRAMS
Written and edited by: Dee Laninga, Angela Huffman, and Joe Maxwell