Producer Groups Reach Deal On Non-Refundable Checkoff – for Sep. 13, 2010

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A compromise appears to have been reached between the Alberta Beef Producers (ABP) and the Alberta Cattle Feeders Association over the fate of the national cattle checkoff.

After meetings between their boards over the summer, the two groups have agreed to recommend to Minister of Agriculture Jack Hayden that the $1-per-head national portion of the $3 ABP checkoff be made nonrefundable.

Hayden had previously stated that he wanted to make the national portion of the cattle checkoff non-refundable, but wanted to see an agreement on the issue between the two main cattle producer organizations. The minister played an instrumental role in encouraging the two organizations to meet and discuss a resolution to the checkoff issue.

The national checkoff portion issue has been a concern not just in Alberta, but across the country. With 40 per cent of the national cattle herd, Alberta is the largest contributor to national programs. It would have been the only province without a non-refundable national checkoff which would have seriously affected national agencies such as the Beef Information Centre and the Canada Beef Export Federation. It would also have prevented the imposition of a checkoff on cattle and beef imports.

In effect to 2013

Rich Smith, ABP general manager, said that it has been recommended that any agreement be in effect until 2013 when it will be reviewed. Consideration will also be given to increased cattle feeder representation on industry promotion and research agencies.

Brett Sparrow, executive assistant to Agriculture Minister Hayden, said the minister has received the recommendation and sees it as a positive development for industry co-operation. Sparrow said the recommendation will now move forward for the required checkoff changes made through the regulatory and government process. He said checkoff changes could be made in a month, and more announcements will be made in the coming weeks.

The national checkoff agreement would come none too soon as the ABP has already been sending cheques to producers who made refund requests for the recent cattle-marketing period. Smith said those refunds included the national checkoff portion. Smith said any change to the national checkoff would not be retroactive and full refunds will be made until the required regulatory changes are made and an effective date is set.

Large feedlot requests

Checkoff refunds are already having a serious impact on ABP income. For the April 1 to June 30 marketing period, 393 producers made requests for refunds, representing 38 per cent of the value of all ABP checkoffs collected during that period.

However, of the 393 total, 11 represented over half the value of the total refund request. The other producers requesting refunds marketed fewer than 50 head. The largest average refund request was from producers marketing more than 5,000 head.

It is assumed that most of the refund requests to date were by large feedlot operators, as most cow-calf producers have not yet marketed this year’s calf crop.

Smith said that expectations are that there may be a 40 to 60 per cent level of checkoff refund requests. If that level continued for the entire year it could see a 50 per cent reduction in ABP income, that could see a similar reduction in ABP operations and services.

To address possible high levels of refunds, the ABP board has decided to take some proactive steps. It plans presentations to agencies such as the Association of Agricultural Fieldmen convention being held in November. The ABP board has also reviewed a preliminary budget which takes into account the reduced checkoff funds.

It is expected that further information on checkoff refunds and their budget consequences will be discussed at upcoming zone meetings and the ABP annual meeting in December.

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“…theminister hasreceivedthe

recommendationand seesitasapositive developmentforindustry co-operation.”

BRETT SPARROW

EXECUTIVE ASSISTANT TO AGRICULTURE MINISTER

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