A Serious Beef with the National Cattlemen's Beef Association
An Interview with Jeanne Charter
Jeanne Charter is a Montana-based rancher active in the Northern Plains Resource Council, a member group of the Western Organization of Resource Councils.
Multinational Monitor: What is the National Cattlemen's Beef Association
MM: How does the check-off work?
In some Western states, where cattle are branded for ownership purposes, the state brand inspection officers are often the ones who collect it. A lot of brand inspectors hate it, because it undermines their police authority because there is a lot of unrest about this and it has turned them into tax collectors.
Because they administer the check-off, NCBA claims in public and before the U.S. Congress to represent a million cattlemen. It's not a voluntary representation; their voluntary membership is only about 3 percent of cattlemen in the country, something like 30,000.
MM: What does NCBA do with the money it raises through the check-off?
MM: What else does the NCBA do with the money?
MM: What kind of lobbying positions does NCBA take in Congress?
The other place NCBA is notorious is international trade. The inner circle of members that they serve tends to be both packers who have international operations and very large feeders that are also large multinationals. They're basically advocating wide open borders to the United States, arguing that we're going to export more beef.
In Europe, the NCBA is really pushing beef with artificial growth hormones. While they say they are doing that for the cattlemen, they're really doing this for the pharmaceutical makers, who are considered an "allied industry."
Similarly, NCBA supports opening up South America for trade. It's really scary for someone in our position. Brazil has a herd that's bigger than the U.S. beef herd. In this case the "allied industries" sell them semen and other things.
MM: How has the industry come to be dominated by large corporate
The companies form "strategic alliances" where feeders get under long-term contract with one of the three packers, with no competitive pricing ability. They commit to deliver product -- fully-fattened animals ready to slaughter -- and they derive their prices off a reference market. There's still a cash trade that's not forward-committed and they'll give them a premium off of that. Or sometimes they'll do it off of futures, which are weakly competitive. All of these arrangements create a negative downward pressure on prices.
It's not bad for everyone. If you're big enough as a feeder, you can do all right. Also, the packers have their own feeders. For instance, ConAgra feeds hundreds of thousands of heads themselves. If you feed hundreds of thousands of animals a year, you can get by with a very small margin. At the feedlot level, their biggest cost is cattle, so if they can do something to drive down the cost of input cattle, it means a lot to a big feeder. So our interests are opposed to the interests of those we sell to -- whose interests are represented by the NCBA.
MM: What have you done to challenge NCBA's work on behalf of these
The government filed suit against us in the summer of 1998. Their opinion was that they could fine us $5,000 per head. Later they asked what we were worth, because they thought they could fine us what we are worth.
We finally had a hearing before a U.S. Department of Agriculture administrative law judge on this in the summer of 1999. Her ruling was basically a rubber stamp of what the USDA bureaucrats said, which is that the check-off is a government program voted in by a national referendum of producers in 1986. But once we voted for it, it was USDA's program. In her ruling this April, the judge said that the USDA should be given "substantial deference" in how they interpret their own regulations.
The NCBA knew the outcome three weeks before we did, because the USDA's marketing service had faxed it to them. That's how close they are.
We are appealing the decision. We have to first go through a second administrative review before we expect to go to district court.
We think we're in a good legal position. There was a Sixth Circuit Court of Appeals decision in Tennessee in 1999 related to a parallel forced check-off in the mushroom industry. A big mushroom processor sued on the basis that it was unconstitutional, and they won unanimously at the appeals court level. The opinion is clear.
MM: What is the check-off campaign and how did it start?
LMA organized a petition drive. A total of 146,000 signatures were handed in to USDA secretary Dan Glickman over eight months ago. That's far more than the minimum necessary, which is about 108,000, to insure that USDA will find enough valid signatures to call for the referendum. Glickman has yet to respond.