At last week’s Pork Industry Forum in Denver, Colo., producer delegates to the National Pork Board (also known as Pork Act Delegates) voted to recommend a reduction in the national pork-checkoff rate from $0.45/$100 value per market hog to $0.40/$100 value.
Resolutions to reduce the checkoff had been presented for consideration at the national level from North Carolina, Indiana and Missouri. Through the course of the two-day event, delegates from all states debated the matter, with suggested rate cuts as low as $0.25/$100 in value.
At issue was the need to satisfy producers back home, as well as find a way to encourage non-checkoff funding for the National Pork Producers Council and the public policy efforts it oversees on behalf of the industry.
“The policy side is just killing us (as an industry),” said Brent Sandidge, a Missouri delegate. “We have a lot more branded product today, we’re not promoting a commodity, so we can shift some of those funds.We have to address the activists and legislative issues.”
“In response to the (checkoff) referendum that we had, it’s our responsibility to tighten our belts and reduce the checkoff rate,” said Duane Bakke, a Minnesota delegate. “This would send a positive signal back home, it shows that we’re listening.”
Ultimately it was an amendment from the Minnesota delegation that settled on the compromise rate that would cut the contribution by a nickel per $100 in hog value.
Only the U.S. Agriculture Secretary can reduce the checkoff rate, which is why the reduction comes in the form of a “recommendation.” Hugh Dorminy, NPB president, said it would take at least six to eight months before the checkoff-rate adjustment could occur. First, USDA has to write the proposed rules; a 60-day public comment period would follow. USDA would then prepare the final rules, and if necessary, allow for additional comments. Dorminy believes USDA Secretary Venneman would honor the pork producers’ reduction request.
If approved, the lower checkoff rate will mean that NPB will receive about $5 million to $6 million less in funding. Of course NPB funding in any given year varies with hog prices because it’s based on value. The 2002 Program Budget presented at Pork Forum totaled $45.8 million.
The prospect of less money going to education, promotion and research concerned many delegates– Iowa in particular. NPB officials did not indicate how the budget cuts might occur. “The producer-led process will determine what to cut,” said Dorminy. The resolution did not specifically address contributions from seedstock, feeder-pig or weaned-pig sales, or the assessment imposed on pork importers.