With the flip of the calendar to July, so marks the shift of pork industry checkoff programs from the National Pork Producers Council to the National Pork Board. While NPB has always had control over distribution of checkoff funds, it will now be responsible for carrying out those programs and projects as well.
All of this has come about as a result of the settlement agreement between USDA and pork producers back in February, which reinstated the national pork checkoff. USDA had established July 1 as the first deadline for completing the transition that is expected to be final within a year of the settlement.
"The pork checkoff settlement agreement has resulted in significant changes for NPB. We must continue to provide the checkoff-funded programs required by law but now will manage them directly rather than through a general contractor. We now have our own location, our own accounting system and our own staff," explains John Kellogg, president of the National Pork Board and a pork producer from Yorkville, Ill. "These are business decisions that took time. We still have details to work out, such as hiring a chief executive officer and a chief financial officer."
NPB's plans to select a CEO are underway, with a candidate expected to be identified in early September. Once the CEO is selected, hiring a chief financial officer will take place. Changes to separate NPPC and NPB accounting, staff and locations occurred on July 1, 2001. The transition and separation were managed by a transition oversight committee and under supervision of the management-consulting firm RSM McGladrey as agreed upon by USDA and NPB.
"We have assisted NPPC and NPB in determining the organizational structures after separation and the tasks required to achieve that. We're reviewing every step of the transition to ensure proper separation of the organizations," says Scott Strachan with RSM McGladrey.
NPB was created through federal legislation that implemented the mandatory pork checkoff in Fall 1986. That legislation outlined the type of programs that can be funded through the checkoff – promotion, research and consumer information. To meet those requirements, checkoff-funded projects are directed by pork producers. The law prohibits the use of funds to influence public policy or lobbying.
For 2002, the checkoff is expected to generate about $43.7 million. Most of that will be used at the national level for continuing programs, such as advertising, retail and foodservice marketing, foreign market development/world trade, production improvement/production technology, and swine health/pork quality and safety. About 20 percent of the checkoff revenues are distributed to the state associations for use in checkoff-funded programs at the state level (that will not change under the USDA settlement agreement.)
Also at the national level, checkoff funds will be used for additional efforts to enhance pork demand domestically and internationally including the orderly movement of product in supply channels; science and technological efforts, including improving pork's position in the marketplace as a quality, safe and healthful product; and information and technology-related approaches to address important pork production concerns.
National Pork Board news release