History of Kentucky Checkoff Program

KRS 247.610◦ Created in 1976 (ten cents)

Kentucky had a program ten years prior to the National Program

◦ Amended in 1985 (Twenty five cents)◦ Amended in 1988 (Federal Beef Promotion Act)◦ Amended in 2004 ( in the event National Program

is terminated)◦ Amended in 2013 (additional state checkoff)

38 Year History of the Kentucky Beef Promotion Checkoff

January 2011 KCA Convention Treasurer’s Report◦ the idea of a Kentucky beef promotion and payment protection fund was

suggested November 2011 KCA Board Meeting

◦ Committee was appointed to draft a resolution that would pursue the addition of state checkoff

January 2012- Resolution passed◦ proceed with the required actions which would include a producer

referendum to amend KRS 247.610 to collect $1 per head Kentucky checkoff in addition to the $ 1 per head federal checkoff.

March 2013 – amended KRS 247.610 March 2014- Task Force Appointed

To review the intent of KRS 247.610

August 2014- Kentucky Board of Ag approved referendum request

November 20th, 2014- Referendum taking place

2011-Present

Funds can be used for creating a program of research, market development, and education to increase the domestic and foreign consumption, use, sale, and markets for bovine animal products.

Funding areas are: Promotion, Education, Research, Market Development, and Global Marketing

KY Board of Agriculture maintains oversight responsibility to ensure the integrity of the program

Funds must be held outside of the state treasury No single assessment levied under any referendum shall

exceed one dollar ($1) on each bovine animal marketed State checkoff funds are refundable within 30 days of

payment by completing the appropriate forms Kentucky Cattlemen’s Association will serve as the

management entity

Highlights of KRS 247.610

Congress created the Beef Promotion and Research Act, the “Beef Checkoff Program”, with passage of the 1985 Farm Bill. Farmers and ranchers approved making the Beef Checkoff Program mandatory in 1988, with 79% voting in favor of it. Farmers and ranchers asked that the checkoff program be built on these tenets:

◦ All farmers and importers pay the equivalent of $1/head when a beef animal is sold throughout its lifetime

◦ One-half of the money collected by state beef councils (50 cents of every dollar) is invested through the beef council in each state

◦ All national checkoff-funded programs are budgeted and evaluated by the Cattlemen’s Beef Board (CBB), a stand-alone organization of checkoff-paying producer volunteers

◦ CBB farmer and rancher members are nominated by producer organizations in their states and appointed by the U.S. Secretary of Agriculture

National Checkoff History

National State Checkoff

Checkoff Checkoff Passed

North Carolina $1.00 $1.00 2010Alabama $1.00 $1.00 2011Tennessee $1.00 $.50 2011Ohio $1.00 $1.00 2014Georgia $1.00 $1.00 2014Texas $1.00 $1.00 2014

Checkoff programs in other states

When: November 20th , 2014 Time: 8AM-6PM local time Where: County Extension Offices Ballot:

◦ Shall the producers of bovine animals assess themselves an additional ONE DOLLAR ($1.00) per head sold, and use the funds so collected by the Kentucky Beef Promotion Council to finance a program to promote and stimulate by research, market development, and education, the use and sale, domestic and foreign, of bovine animal products? This assessment, authorized by KRS 247.610-685, shall become effective April 1, 2015 and shall be in addition to the federal assessment referenced in KRS 247.652.

Save the Date for the Referendum

Steve Kelly, Department of Agriculture◦ Appointed by Commissioner to serve as Referendum

Agent◦ Responsible to ensure accurate collection and tabulation

of ballots and maintaining integrity and public confidence in referendum process

Dr. Gary Palmer, University of Kentucky◦ Responsible for distributing materials to county extension

offices County Extension Offices

◦ Designated to serve as voting locations. County Extension Agents and/or Designee

◦ Serve as County Referendum Agent◦ Coordinate 2014 bovine animal referendum at the county

level

Outline of Responsibilities

You will receive two sets of correspondence with all the necessary materials to host a polling site◦1st Email- (Will mail hard copies on request)

Tuesday, October 28, 2014 Bovine Animal Referendum Guidelines Absentee Ballot Request Forms

◦ 2nd Mailing- (Sending 11/10/2014) Ballot Box, certification forms, ballots, envelopes

What materials will you receive?

Education & Promotion Materials

Shares value of beef promotion & KBC accomplishments

Provides a two-sided overview of the referendum

Top FAQ’s regarding the Kentucky Beef Checkoff

Email sent 10/21/2014

www.kybeefcheckoff.com Single most important resource to share information

about the referendum

Who can vote? Each person engaged in production of bovine animals on a

commercial basis, including the owners of farms on which bovine animals are produced, tenants and sharecroppers sharing in the proceeds of the sale of bovine animals shall be entitled to cast one (1) vote in the referendum.◦ Farmers who produce and market dairy cattle are eligible to

vote◦ Individuals must vote in their county of residence◦ Voters must be eighteen (18) years of age or older◦ Only one vote per individual regardless of the number of

counties the individual raises or markets bovine animals◦ Corporate producers will be permitted to vote only in the county

where their principle place of business is located◦ Eligible votes who reside outside the Commonwealth will be

permitted to vote only in the county where their farm is located◦ If producers own two (2) or more counties eligible voters who

reside outside the Commonwealth may choose one (1) of the counties for voting purposes

Each person whose name regularly appears on checks issued in payment for the sale of bovine animals is allowed to cast one (1) vote regardless of the ownership of the farm upon which bovine animals were produced.

No person who certifies to the county referendum agent that he is a producer of bovine animals shall be refused a ballot but such person shall be required to furnish agent with information specific enough for the commissioner to verify the person’s voting eligibility before such ballot is counted in the referendum.

Who can vote? continued

Absentee voting is permitted. Must complete “Request for Absentee Ballot

form” (County Referendum Agents will receive 10/28/2014)

The absentee request form shall be completed and sent to Commissioner of Agriculture at least ten (10) days in advance of the referendum date.

County Extension Agents will be asked to sign all requests

Request forms may be obtained from Kentucky Cattlemen’s Association, Kentucky Department of Agriculture, Kentucky Cooperative Extension Service offices or www.kybeefcheckoff.com

Absentee Voting

All voting must take place at county extension offices- absentee voting is permitted

Individual who wish to vote must complete: certification of eligibility form and present identification-incomplete or inaccurate completion of certification will disqualify the voter

A location will be provided that allows for confidential and secret completion of the ballot

Completed ballots must be put in ballot box

Voting Procedures

Should the county referendum agent (CRA) have reason to believe that a voter is ineligible to vote in the referendum, the CRA will allow the ballot to be cast. The CRA take the completed certification of the voter in question and seal it in a envelope. The CRA will write on the envelope “Questionable vote for the reason of ________”

This envelope will be included with the ballots and certifications sealed and returned to the Kentucky Department of Agriculture

What if voter is ineligible?

The ballot box and certifications will be under constant oversight by CRA or designee

Remove all ballots from ballot box and place, along with completed certifications into sealable envelope or box provided.

If no ballots were cast please return all ballots and certifications to the Kentucky Department of Agriculture

Checklists will be included with 2nd mailing to walk you through this process. Procedures are also outlined in Bovine Referendum guidelines

Completion of referendum

Each CRA will be provided a pre-addressed mailing box.

Please prepare materials to mail no more than 24 hours after voting complete.

The box will ship to the Kentucky Department of Agriculture

CRA will have the packaging containing ballots and certifications in their possession until personally delivered to a pickup location.

Do Not leave boxes unattended while awaiting pickup.

Shipping to Kentucky Department of Agriculture

Vote tabulation will begin when all ballots are received

A majority of the beef producers who vote, must vote in the affirmative, in order for the referendum to pass

The commissioner of agriculture will announce the results within ten (10) days after the referendum.

Vote Tabulation

Expected to conduct all activities relative to the referendum in such a manner as to conduct a fair and impartial referendum.

No individual or office will imply or recommend approval or disapproval of the referendum.

Personnel may attend public meetings designed to dispense information to the public. If personnel do attend public meetings, ensure that the public understands that attendance is solely to provide information on the voting process and not to imply support for any specific position.

Impartiality

Thank You!

Separate Checking Account◦ Would not co-mingle federal and state checkoff dollars◦ Would not co-mingle with association dollars◦ Would not co-mingle with grant dollars

Producer/stake holder council for state checkoff funds◦ Would review the intent of KRS 247.610◦ Then develop an annual marketing plan◦ Develop a annual budget

How would a state beef promotion checkoff be handled

2005 2006 2007 2008 2009 2010 2011 2012 2013$1,250,000

$1,500,000

$1,750,000

$2,000,000

$2,250,000

$1,7

75,4

25

$1,5

85,9

38

$1,9

62,0

17

$1,5

68,9

95

$1,5

72,6

65

$1,5

94,4

84

$1,4

91,0

07

$1,4

80,3

80

$1,4

76,7

71

National Checkoff Collected

INC

OM

E

$500,000

$550,000

$600,000

$650,000

$700,000

$750,000

$800,000

$850,000

$900,00017 Year Checkoff Comparison

Revenue and ExpenseRevenue

Expenses

What is the role of the producer/stake holder council? This would be a “Uniquely Kentucky” Program

Where Kentucky Producers would make the decisions.

Create annual marketing plan

Create annual budget for each program area

Receive requests for funding

Make decisions about projects that will be funded

Promoting and Stimulating◦ Consumer Marketing & Advertising

Consumer Advertising Retail Food service

◦ Industry Information Public Relations Reputation Management Issues Management

Research◦ Support beef quality research at Kentucky University’s in cooperation with national funds◦ Follow national research priorities

Market Development◦ Provide funds for support of the development and implementation of national and foreign beef promotion,

Information, education, and research programs Fund National programs through the Federation of State Beef Councils, Meat Export Federation, Cattlemen’s

Beef Board

Education◦ Beef Quality Assurance◦ Production Programs◦ Youth Programs

Example of how dollars could be allocated

Amend KRS 247.610 (2013)

Make application to the State Board of Agriculture

Approval by the State Board of Agriculture

Commissioner of Agriculture would call for a referendum

What would be the process?

Total Receipts 1,494,482

Transfer to States (101,040)

Transfer to Beef Board (689,353)

Interest Income 37

Net to Kentucky 704,126

2013 Income

National Beef Checkoff

Total Receipts 1,393,442

Refund (10,000)

Interest Income 100

Total Income 1,383,542

*Based on 2013 national receipts

*Estimated Income

Kentucky State Checkoff

The Kentucky Cattlemen’s AssociationEstablished 1973

99County Associations

KCA BoardMeets Quarterly

KCA Executive CommitteeMeets monthly to review finances and scope of work

Steve Downs, President – Ken Adams, TreasurerGary Woodall, President elect – David Lemaster, Vice President

Kentucky Beef Council

Chuck Crutcher

Kentucky Cattlemen’s Association Tim White

Kentucky Beef Network ,LLCBobby Foree

Kentucky Cattlemen’s Foundation

Harvey Mitchell

KY Beef Promotions, LLC

Jr. Cattlemen Assn.

Kentucky Beef Network VII

Cow Country News/LAN

House of Delegates

Membership/Legislative

Producer Comm

Consumer, Industry

Research, Foreign

Promotion

Eden Shale Farm

Building

Scholarships

Leadership Program

Why a State Checkoff?

A State Beef Checkoff can address important beef industry challenges.

Misleading claims about food safety and animal care

Competition for export markets

Shifting consumer beef attitudes

Nutritional myths

Kentucky Cattlemen’s Association

State Checkoff Program

FAQ’s

Will more staff be required to efficiently administer a state checkoff program?

Yes, this program will require a dedicated staff person to effectively implement state beef checkoff projects. There may be opportunities to partner with the Kentucky Beef Council, Kentucky Dairy Development Council, Kentucky Beef Network, and other established entities to implement some programming requirements effectively.

Who will make the decision about how the state beef checkoff monies are utilized?

The membership of a producer/stake holder council will be nominated by the state beef checkoff steering committee every three years.

The KCA Full Board will approve the slate of nominations for the membership of a producer/stake holder council annually.

Each member can hold a position for a maximum of three years. Members can be reappointed after a one year absence.

Where do we go from here?

Timeline for a referendum

Schedule Meeting 2- Structure State Checkoff & Planning a referendum

Suggested Date- July 23, 2014

Next Steps?

Thank you!

Promoting and Stimulating

Research

Market Development

Education

Areas for dollars to be allocated

Checkoff expenses have increased dramatically

Revenues have not

28 years on the same dollar, 1985 vs today would be worth in the 47 to 49 cent range

Nationally the industry has had a hard time agreeing on just about anything

Anti-meat factions with exponentially larger budgets

US Beef Consumption is decreasing

The latest comprehensive econometric model identifying the value of a cattleman’s checkoff dollar indicates that producers get a return of $5.55 for every dollar invested.

Beef Council Challenges

The Kentucky Cattlemen’s Association

Established 1973

99County Associations

KCA BoardMeets Quarterly

KCA Executive CommitteeMeets monthly to review finances and scope of work

Steve Downs, President – Ken Adams, TreasurerGary Woodall, President elect – David Lemaster, Vice President

Kentucky Beef Council

Chuck Crutcher

Kentucky Cattlemen’s Association Tim White

Kentucky Beef Network ,LLCBobby Foree

Kentucky Cattlemen’s Foundation

Harvey Mitchell

KY Beef Promotions, LLC

Jr. Cattlemen Assn.

Kentucky Beef Network VII

Cow Country News /LAN

House of Delegates

Kentucky Beef Promotion Council

Name: Chuck Crutcher

Legislative Producer Comm

Consumer, Industry

Research, Foreign

Promotion

Eden Shale Farm

Building

Scholarships

Leadership Program

Made up of representatives of different segments of the industry, i.e. Cow Calf, Stocker, Market Agency, Dealers, Dairy, others

Should consider programs that are on going with the National Beef Checkoff programs.

The Advisory Board

12/21/2011 Met with David Beck and Jeff Harper

Saturday January 14, 2012 KCA Convention◦ Beef Promotion resolution passed◦ Explore all possible avenues to insure that

producers are positioned in the best possible way to recover funds. Resolution passed

Friday February 24, 2012◦ Executive committee reviews options and

directs Exec. V.P. to move forward

Promoting and Stimulating◦ Consumer Marketing & Advertising

Consumer Advertising Retail Food service

◦ Industry Information Public Relations Reputation Management Issues Management

Research◦ Support beef quality research at Kentucky University’s in cooperation with national funds◦ Follow national research priorities

Market Development◦ Provide funds for support of the development and implementation of national and foreign beef promotion,

Information, education, and research programs Fund National programs through the Federation of State Beef Councils, Meat Export Federation, Cattlemen’s

Beef Board

Education◦ Beef Quality Assurance◦ Production Programs◦ Youth Programs

Example of how dollars could be allocated

Where Do Checkoff Dollars Go?

Promotion

Research

Consumer Information

Industry Information

Foreign Marketing

Producer Communications