Refundable Checkoff Takes Heavy Toll On Alberta Beef Producers

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The move to a refundable checkoff from a mandatory one has affected different commodities in different ways.

Alberta Beef Producers has taken approximately a 30 per cent hit, with 87 per cent of the refunded dollars going to the feedlot sector.

It s disappointing, but not unexpected, said Rich Smith, executive director of ABP. They (feeders) were some of the strongest people pushing for it to be refundable. There s no question that some of them, based on their marketings, pay a very substantial amount of checkoff and so they do have the most to gain.

However, there are 20,000 producers in the province paying checkoff, with the majority of the refund money going to a handful of producers.

The thing we need to keep in perspective is that in the most recent period we had nine producers who took 38 per cent of the refunds, said Smith. These are producers who marketed over 10,000 head in the period, so they are very large and 22 per cent of the requests came from producers that market over 1,000 head and (together) they represent 87 per cent of the refund value.

That leaves 13 per cent of the total refunds going to everybody else who markets fewer than 1,000 head, which I think you could safely argue are likely the vast majority of cow-calf producers.

Smith says there are approximately 300 feedlots in the province that feed 1,000 head or more and about half seem to be requesting refunds. Feeders accounted for 156 of 411 requests and 87 per cent of the dollars refunded in the period ending June 30. That compared to feeders submitting 160 of 648 requests for 76 per cent of refund dollars in the period ending last December.

In all, Alberta Beef Producers refunded between $2.2 million and $2.5 million.

It s definitely had an impact on what we re able to do, said Smith.

The Alberta Lamb Producers were caught in the cattle industry political crossfire over checkoffs, and along with pork and potatoes, were swept up in the legislative changes making checkoffs refundable. They too are feeling the heat.

We just completed our first year of refundable checkoff because our financial year starts the first of September, so we really just have a picture of what the first year has meant, said Margaret Cook, executive director of ALP.

There are 1,800 lamb producers in Alberta, and only 12 requested a refund.

It actually amounted to almost nine per cent of our checkoff because there were two big ones, said Cook. Forty-six per cent of the total refund amount was refunded to one producer and 62 per cent of the total to only two producers.

It s very disappointing when they get a lot of benefit.

Alberta Pork dealt with the situation much differently and insisted on giving their 375 producers most of their checkoff back.

These guys have been feeling it really hard, said Darcy Fitzgerald, executive director of Alberta Pork. That was the reason why our board just said, Let s just give back 85 cents of each dollar we collect, feeling that maybe that would help out some people.

This was the group s first refund period, and producers could request refunds on May 1. By May 12, when Alberta Pork announced the checkoff rebate, only three producers had requested refunds. Fifteen cents of every dollar was retained to support the Canada Pork Council.

If we hadn t given back the rebate, if more producers would have asked, I couldn t say, said Fitzgerald. But given that we only had three up to that point, it was a pretty good signal I think.

Alberta Pork is using its financial reserves to operate for the year, and will be unable to refund the checkoff next year. Their annual budget is $3 million, and they collect $2.5 million annually from the $1 checkoff they collect from producers.

The Potato Growers of Alberta were also affected by the refundable checkoff, but did not return any phone calls asking for comment.

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