In Ohio, ranchers say beef checkoff program flouts prohibition on lobbying

Behind each of the marketing campaigns that brings us the “Incredible, Edible Egg,” “Pork: The Other White Meat,” and “Got Milk?” is a multimillion-dollar budget funded by commodity farmers across the country. Farmers pay for those marketing campaigns, ostensibly to promote their products to the public, through federally administered “checkoff programs.” Checkoffs are meant to be politically neutral, existing for the sole purpose of commodity promotion and research.

But some ranchers have long taken issue with the administration of the beef checkoff, fighting the program at the state and federal levels. They allege that some checkoff funds go toward political activity and lobbying, which is prohibited by the Agricultural Marketing Service, the body of the USDA that oversees the 22 checkoff programs.

The findings of a new report add fuel to the anti-checkoff fire. The report — released today by the Organization for Competitive Markets (OCM), an agricultural antitrust and trade policy research group, and the Ohio Farmers Union — looks at the relationship between Ohio’s checkoff program, the Ohio Beef Council (OBC), and the state’s cattle lobby, the Ohio Cattlemen’s Association. It suggests that the relationship between the checkoff program and the Cattlemen’s Association may be cozier than the law permits, because the association’s strategic goal is to influence policy.

“From this report, we can see that our own checkoff dollars are doing the exact opposite of what they’re intended for,” says Angela Huffman, director of communications and research for the OCM. She says that today, the Ohio checkoff is “indistinguishable” from the state Cattlemen’s Association, raising serious concerns about whether farmers’ taxes are being used solely for marketing and research.

Asked about the report, the OBC said in a statement that it “is proud not only of its efforts to help enhance beef demand for the benefit of beef producers, but of the comprehensive and robust firewalls in place to assure that checkoff funds are used lawfully and as intended.”

The federal beef checkoff program was established in 1985 by the Beef Research and Promotion Act. According to the law, cattle producers must pay $1 per head of cattle sold into the federal checkoff fund. Half of that money is then reallocated to state beef councils, which are contracted by the USDA to administer the checkoff funds in the states. The OBC is the USDA-approved administrator of Ohio’s checkoff funds, to the tune of $789,000 in revenue in 2016.

Some states have passed additional checkoff assessments of their own. Ohio’s state checkoff, passed in 2014, collects an additional $1 per head of cattle sold, which is also managed by the OBC. Farmers in Ohio can request a refund for their beef checkoff assessments, though information on how to submit a refund request is not available online. In 2016, the OBC reported paying out slightly less than $9,000 in refunds.

There are both federal and state prohibitions against using checkoff funds for political activity. The legislation that established the federal beef checkoff program prohibits funds “from being used in any manner for the purpose of influencing governmental action or policy.” Ohio law dictates that no checkoff program should “use any assessments that it levies for any political or legislative purpose.”

But the relationship between Ohio’s beef checkoff funds and the state’s beef lobby group is less than transparent. The OCM’s report finds that the OBC shares enormous resources with the Ohio Cattlemen’s Association, the state affiliate of the National Cattlemen’s Beef Association, a lobbying group for ranchers. The Ohio Cattlemen’s Association describes itself as “the beef industry’s grassroots policy development organization.” The organization’s strategic plan says that a top goal for the coming years is “influencing and monitoring state and federal legislation and regulations and identifying priority issues.”

Staff members at the Ohio Beef Council and the Ohio Cattlemen’s Association are exactly the same, with the same job titles and emails. Some staffers’ job descriptions acknowledge that they work for both groups. The two organizations also share the same address in Marysville, Ohio, and the same phone and fax numbers.

Additionally, the OBC’s six most recent annual reports show that since 2011, the group has contributed $87,000 to the National Cattlemen’s Beef Association. According to guidelines provided by the Agricultural Marketing Service, any expenditure made with checkoff funds with the goal of “influencing government policy or action” is prohibited.

Joe Logan, president of the Ohio Farmers Union, says the OBC has “taken liberties” in its role, and that the “firewalls that are supposed to be in place” between checkoff funds and lobbying have not “been attended to very closely.”

Over the past couple of years, Logan says, the Farmers Union has met with the state’s director of agriculture, attorney general, and auditor asking for a deeper look into whether Ohio’s beef checkoff funds were being spent on political activity. But he says that none of those parties took up the case, and that the state has a “laissez-faire attitude towards [the] checkoffs.”

A USDA spokesperson said in an email that the relationship between the Ohio Cattlemen’s Association and the OBC is permissible “provided there is a financial firewall in place,” but did not describe the nature of that firewall or confirm that in this case it even exists. Mark Bruce, communications director for the Ohio Department of Agriculture, said in an email that the department “takes its oversight over commodity checkoff programs seriously” and “addresses any concerns [with the checkoffs] identified by the department or other parties.”

Some ranchers have also argued that the generic promotions funded by checkoff dollars favor the largest ranchers, whose interests are represented by the NCBA. The association has grown more powerful in recent years as consolidation in the meat industry has concentrated more wealth in the hands of top processors. Today, the top four meatpackers in the country control more than 80 percent of beef processing. Since 1998, the NCBA has spent an average of more than $350,000 a year on federal lobbying.

Farmers have made some inroads in making the case that the federal checkoff program is in need of reform. Last year, a district court judge issued a preliminary injunction against the collection of Montana’s state checkoff assessment after ranchers there argued that generic beef checkoff promotions favored some kinds of beef over others.

Last year, Sens. Cory Booker, a New Jersey Democrat, and Mike Lee, a Utah Republican, introduced legislation that would bring more transparency to the federal checkoff program.