Farmers Union slams proposed beef checkoff
HARRISBURG -
Although the upcoming Beef
Check-off is pegged as a
“self help”, a voluntary
program of beef research,
consumer information,
promotion and foreign
market development, the
Pennsyvlama Farmers
Union does not agree.
Leonard Zemaitis, Penn
sylvania Farmers Union,
Administrative Director,
says that a truly voluntary
program would allow cat
tlemen to deduct the beef tax
at the time of sale only if
they wanted it deducted.
Snder the rules of the Beef
ck-off, deductions of beef
tax are mandatory all along
the way to the slaughter
CRESBARD, S.D. - When
the Beeferendum was voted
on the first tune last year, it
may have gamed over 50 per
cent of the vote. But actually
only 5.6 per cent of the
eligible voters were in favor
of it, the Concerned Cat
tlemen of the Dakotas
contend.
Proponents of the up
coming Beeferendum 1980
say that a majority of cat
tlemen recognize the need
for more adequate funding of
{search and information
programs.
It’s true, spokesman Larry
Lmdhorst says, that cat
tlemen are in favor of such
programs. But, there is no
way cattlemen will be
assured they really want
such a program.
. A majority to me, Lm
dhorst says, would mean at
least half of the eligible
cattlemen who can register
to vote.
In the last election 1.8
million persons were
eligible. But, he said, less
than 18 per cent showed up to
register. Of the 322,175
registered voters, 130,464 or
40.5 per cent voted yes.
Lmdhorst said that 191,711
ihdn’t vote or voted no.
>9ie said when less than 6
per cent of the grassroots
cattlemen vote m favor of
something, it is questionable
whether or not the electorate
WECOTA, S.D. - The
appetite for beef m the
United States is more than
equal to domestic supplies,
the Concerned Cattlemen
taskforce reveals.
Because of the domestic
demand-supply situation,
cattlemen don’t need catchy
little slogans to get people to
;eat beef any more than oil
companies need slogans to
get people to use gas, Chuck
Bellman, Wecota, says
USDA statistics bear out
that demand for beef ex-
Spds supply. Americans are
coming more dependent
on foreign beef each year.
That is why the U.S. is the
v biggest importer of beef in
’ the world, he said. We un
port about 10 per cent more
than we produce. The per
centage. will increase, under -
•* Urtt a**''w
Pros and cons about Beef Referendum
house. Then the packer turns
the money over to the Beef
Board created by the Beef
Research and Information
Act
To get beef tax money
returned, cattlemen must
prove value added.
Zemaitis says it is man
datory that the tax be paid
by the packer. If he can’t
deduct it from the seller,
then the packer will include
it in his cost of production.
The result will be lower
prices for the producer.
Zemaitis believes that the
producer will eventually pay
the total bill.
There will also be cases
where value has been
Concerned Cattlemen
question referendum
is favorable or unfavorable
toward the issue.
Few statisticians, Lm
dhorst said, could say that
such a vote is representative
with out giving a large
margin of error.
Lmdhorst said the Con
cerned Cattlemen are not
agaisnt any of the purposes
of the Beeferendum. But,
they are opposed to the
method of taxation, who
pays the bill and how those
who pay the bill will be
represented.
The cow-calf operator will
pay the full fare for all
programs and costs if
Beeferendum 1980 passes,
the Concerned Cattlemen
taskforse calculates.
Costs to producers, they
say, will total more than
trucking, commission,
yardage, feed and insurance
when the feeder-calf
producer markets his cattle.
Current marketing costs
based on a 56-mile haul will
average about 15 per head,
spokesmen Leßoy Vogel,
Hoven, has determined.
Beeferendum programs
after the first two years will
run as high as $6.40.
“Our earlier estimates
were not high enough,”
Vogel said. “Cost to the
producer could run from 1 to
1.6 per cent of the feeder calf
selling price.”
Our earlier projections
the new counter cyclical beef
import law for the next 10
years.
USDA statistics show that
as per capita income in
creases, so does the demand
for meat and meat products.
Consumption of beef,
veal, poultry, fish, pork and
lamb increased from 227
pounds per capita in 1964 to
more than 260 pounds in 1976.
The only tune meat con
sumption falls, Bellman
says, is in a year like 1973
when supplies of all meats
were lower. The big drop in
supphes that year was m
pork as hog men held back
sows and guilts to gear up for
greater production
But, Bellman says, when
supphes in general dropped
in 1973, income received by
cattlemen shot up,to 100 per
decreased. Cattle often
changes hands several tunes
before they end up in the
feedlot or slaughter house. If
the value decreases and then
is added back in the next
transaction, double taxation
will result over a portion of
the final sale price, Zemaitis
says.
It is difficult to understand
why Beef Check-off
proponents want a tax based
on price, he said. The same
people wanted beef unports
controlled on a per head
basis.
If cattlemen need a
program as proposed, it
would be better to have the
tax a fixed amount per head,
Zemaitis concludes.
included only the out-of-the
pocket Beeferendum costs,
he said. Smce then we have
calculated the extra costs of
production that must be
passed down in the form of
lower pnces.
Vogel explained that
everyone m the chain above
the cow-calf operator can
deduct cost of the program
from someone else. The
packer can reduce prices to
the feeder, the feeder to the
yearling operator and
yearling operator to the
feeder-calf producer.
They reduce the price for
two reasons, he said, tax
they take out for the
Beeferendum and ad
ministrative costs.
According to testimony m
the Federal Register,
estimates of all costs to the
industry (tax and ad
ministration) will be 0.8
cents per pound of beef.
With the price of beef
(meat) more than 100 per
hundredweight, that ad
ditional cost on fat steers for
slaughter would come to
about $6.40 per head. Vogel
said that expense will
eighter be deducted or
passed along m tax or lower
prices to the feeder-calf
producer.
On a $45,000 load of calves,
he said, that will amount to
$720 out of the producer’s
pocket.
Supply and demand vs. Beeferendum
cent of parity. That was
caused by a six-pound drop
in beef and a 12-pound per
capita decrease in con
sumption (supply) of all
meats.
On the other hand, supply
and consumption of all
meats jumped 10 pounds per
capita m 1974. The result.
Prices dropped to 70 per cent
of parity.
The next two years, 1975-
76, supply increased another
12 pounds and beef prices
continued to drop to 59 per
cent of parity.
Bellman says this type of
fluctuation shows the
inelasticity of demand for
meat. (A little too much for
too little has a great effect on
price.)
Therefore, he says, it will
be futile for a producer to
At annual meetin.
Robert Mullens of the National Farmers Union told local Farmers Union
members to vote against the upcoming Beeferendum. He outlined his reasons at
the Pennsylvania Farmers Union meeting this week. At table in foreground is
PFU Administrative Director Leonard Zemaitis.
HARRISBURG - The
nation’s cattle producers
will be asked to fork over
some hefty outlays of cash if
the proposed beef promotion
program is approved.
According to estimates
made by the National
Farmers Union, the “value
added tax” on cattle
producers would pull more
than $6O million out of
producers’ pockets during
the first year of operation.
The midwest region of the
country would contribute
over 60 percent of the total
under the check-off
proposal.
Based on recent USDA
figures, Pennsylvania cattle
producers during the first
year would pay ap
proximately more than half
a million dollars in
assessments to the Beef
Board.
The mandatory check-off,
which will be voted on by
producers in February,
would apply to cattle each
tune they were sold. The tax,
using the “value-added”
approach, would “ride” with
the animal until it was
slaughtered and the funds
control prices through in
come from a beef tax.
The counter cyclical beef
import bill approved by
Congress will increase
imports by 40 per cent m
19S0, according to the
Concerned Cattlemen
taskforce.
A spokesman, Leßoy
Vogel, said that imports will
jump from 1.2 to 1.68 billion
pounds, equivalent to 200,000
head of live cows.
USDA has calculated that
from 1980-1989, 14.277 billion
pounds will be imported. The
old law would have allowed
13.149 billion pounds.
Translated to cow num
bers, Vogel says that an
additional 450,000 head will
be imported each year and
more than 4.5 million m 10
years.
Lancaster Farming, Saturday, January 26,1980—85
PFU speaks out
against Beeferendum
would then be sent to the
Beef Board.
Although Pennsylvania
producers would be con
tributing about $533,000 a
year, there would only be 1
member from Pennsylvania
apppomted to the 60 member
National Beef Board by the
Secretary of Agriculture.
This Beef Board would
decide, subject to the ap
proval of the Secretary of
Agriculture, where the
producers’ money would be
spent.
The federal legislation
which allows the
establishment of a beef
check-off program was
passed by Congress in 1976.
Under the law, the Beef
Board could engage in
promotion, advertising,
research, and market
development programs.
A survey of other
federally-sanctioned check
off programs has shown that
most of the producers’
money has been spent on
advertising and promotion.
Out of some $42 million
collected annually by the
five present federal
That’s enough cow meat,
he said, to assure two things.
The consumer will become
more dependent on imported
beef as they have become
dependent on foreign oil.
And, more cattlemen will be
headed for bankruptcy.
The Concerned Cattlemen
consistently fought to have
imports tied to price, the
economic welfare of the
industry, he said. The
counter cyclical bill,
however, is tied to cow
numbers and is not in the
best interests of the
producer.
Proponents of the cow
number theory for beef
imports are now supporting
the upcoming Beeferendum,
he says. Just as the new
import bill will hurt the cow
calf operator the most, we
programs, over 60 percent
was spent on advertising and
promotion.
“The bottom line for any
check-off is—will it increase
producer income? We have
analysed the proposed beef
promotion program very
carefully and have con
cluded that it will not, stated
Leonard Zemaxtis of the
Pennsylvania Farmers
Union.
Dairy cattle are subject to
the check-off tax when
livestock is sold for
slaughter. Therefore, it is
important for both Dairy and
Beef producers producers to
register for the vote.
To be eligible to vote m the
Beef Referendum producers
must register at their local
ASCS office during the of
ficial registration period,
January 28 through
February 6.
The referendum will then
be conducted from February
19 through 22. Producers
may register and/or vote in
person or by mail. Any
person who owned cattle
during 1979 is eligible to
vote.
find that the cow-calf
operator will end up footing
the bill and receive the least
in return if the referendum
passes.
“We didn’t support a cow
number formula because our
studies showed we could
have cheap beef even when
numbers are low. This can
happen during tunes of
overliquidation or when
there is an oversupply of
competitive meats such as
pork or chicken to replace
beef in the diet, ’ ’ he said.