Published May 25, 2017
Category: Inside Stories
By Kerry Hoffschneider
In 1977, the first beef checkoff vote was held, and Dave Wright’s grandfather, Earl Wright, loaded his grandkids up and headed out to make his opinion heard. “We told Grandpa we were not old enough to vote. He told us, ‘You each own a calf, and you can vote.’ He wanted us to vote ‘NO,’ and I remember looking at him and saying, ‘But Grandpa, maybe I want to vote YES.’ He told me, ‘All they are going to do is create a pile of money for a few people to gather around and drink whiskey.’”
Today, Wright said his grandfather was not far off in that sentiment when it comes to the $2 billion in beef checkoff dollars that have been collected since 1985 and the roughly $40 million a year the National Cattlemen’s Beef Association (NCBA) takes out of that collection. “They are running a money laundering system Al Capone would be proud of… Producers are forking money over to something (the beef checkoff) designed to keep certain political entities in place while being told that the purpose is to promote their industry, and the federal government is forcing them to pay to keep the whole thing going. NCBA is a lobbying organization with 70% of its budget — at least as of 2008, and it may be more today — coming from the beef checkoff.”
Wright said the Beef Promotion & Research Act of 1985 — enacted in Congress by the Senate and House of Representatives — that establishes the checkoff reads clearly and needs to be deeply considered today. “The following is the very first paragraph of that act of Congress: ‘To enable cattle producers to establish, finance, and carry out a coordinated program of research, producer and consumer information, and promotion to improve, maintain, and develop markets for cattle, beef, and beef products.’ We have not spent any checkoff dollars to create actual cattle markets. All dollars are instead spent on research and producer and consumer information for the promotion of beef. Are we going the right direction today in that promotion? In 1985 there were 1 million beef producers and 34 million beef cows in the United States. Today, there are around 700,000 beef producers and 29 million beef cows. In 1995, NCBA had 40,000 members; today they have 26,000 members.”
Twenty-five years after that voting experience in 1977, Wright, a non-member of NCBA, would be elected to serve on the Nebraska Beef Council for two consecutive terms. He was also appointed by USDA Ag Secretary Tom Vilsack to serve on the Cattlemen’s Beef Board, which he did for two consecutive terms. Overall, Wright served in all those positions a total of 14 consecutive years. Today, Wright is president of the Independent Cattlemen of Nebraska as well as a supporter of the Organization of Competitive Markets and its lawsuit regarding transparency and accountability of the federal government’s checkoff dollars.
The Wrights have a cow/calf operation in Holt and Antelope Counties right where the Sandhills begin. Wright and his wife Joan, who is a nurse and newspaper editor, also own three community newspapers in their area and print five other community weekly newspapers. The couple have three children – Issac has a degree in diesel mechanics and lives on the ranch five miles west of Ewing, Katie is a volleyball coach and teaches Spanish in Norfolk, and Hannah works with College Possible that helps inner city kids get the opportunity to go to college.
So how did a non-NCBA member who was vocal about his frustration with the beef checkoff get elected to the Nebraska Beef Council? Wright explained, “It all began in the mid-1990s when corn hit $5 and the cattle market just dove. I had to make a decision to either file bankruptcy or figure something out. There was a gentleman, Dennis Vandersnick, who heard me complaining at the feed store and said, ‘For starters, if you don’t want the banker to tell you how to raise cattle, stop taking his (insert explicative) money.’ Then he said, ‘You need to get involved.’ I did not want to hear that because I wanted to complain.’
“I sold half my cows and took a job driving truck, hauling corn into a feedlot during the day, and ranched at night. I did that for six years. While I was driving truck, I had time to read the ‘Good Book,’ and I had time to call up the USDA and tell them to send me all the cattle production, consumption, and import and export information they could possibly send me,” Wright added. “What I discovered is the price of cattle should have never fallen in 1996. It fell because they started importing beef, and 20 years later, that is what is still happening. NCBA is all about protecting the packers. The packers have used imports to control their costs. They don’t care if the cow/calf guys go broke. They have put this notion in the leaders’ heads that, if cattlemen fail, the reason is they individually are not successful, not that the system is not functioning right.”
He went on, “The public and the cattle producers need to fully realize that you don’t need U.S. cows to have ‘U.S. beef.’ According to the USDA, everything that comes out of U.S. packing plants is considered U.S. production. So, say, if you import calves from Mexico or Canada, as long as they are slaughtered at U.S. packing plants, they are considered U.S. production. That is just one of the reasons they won’t allow Country of Origin Labeling to pass.”
During this time, Wright was asked by Chuck Hassebrook, who was the Director of the Center for Rural Affairs at the time, to run for the Nebraska Beef Council. “I remember telling Chuck that I opposed the beef checkoff, but he said we needed someone on there to try and make a difference. I collected the signatures I needed and, while doing so, told people I was opposed to the checkoff. For starters, I thought we should have the checkoff collected at the point of slaughter instead of the point of sale, to reduce the number of times the checkoff can be paid off one animal. Somehow I got elected and beat then president of the Nebraska Cattlemen at the time, Jim Ramm.
“Nebraska is the only state that elects Beef Council members. All the other Beef Councils across the United States (45 Beef Councils with 660 directors because 5 states are too small to have a council) do not elect their members. Of the 660 directors on the state level, 85 become Beef Federation directors. To do that, you pay to play. In Nebraska, seats one to three are $34,000 each. Seats four to five are 2.5% of our Nebraska State Beef Council budget at $250,000 each. Seats six and up are 5% of our state budget at $500,000 each. The Beef Federation collects $10 million per year from these seats.” (In 2010, only 3 out of the 85 Beef Federation directors were not dues-paying NCBA members – Wright was 1 of those 3.)
“I was already angry when I walked into the Nebraska Beef Council in 2003, and I ran into resistance right away. It became obvious pretty quickly I didn’t fit in with the group. … When we had our first orientation for the Beef Council/ Beef Federation, I was questioning why policy members and council members were being oriented or ‘brainwashed’ at the same time. I was raising so much cane that I got taken to the office by Terry Stokes, NCBA CEO. I found out the Beef Federation does not have a tax ID number — the federation is a wholly-owned subsidiary of NCBA with one CEO and CFO. Stokes asked me, “Do you see the firewall separating the Policy division and the Federation division?” to which I said that it looked to me like the policy division of NCBA and the Beef Federation “were married and filing separately.” He said, ‘That’s not the way we see it.’
“Also, since I had the last seat in Nebraska, my seat cost the state $500,000. I told them I should probably stay home because we were sending that money directly to the Beef Federation, and the Federation takes those dollars collected so they can be spent on NCBA contracts. I questioned why we did that when we could spend those dollars in Nebraska,” he added.
Wright explained that Texas collects the most checkoff money, and Kansas and Nebraska go back and forth for second and third. He wants to know why the beef importers can be in the top four. “Last year, during the drought, the importers gained two seats. That is not right.”
Wright believes the checkoff law says that the producer can decide how much money stays in the beef council. “The lawyer for the Cattlemen’s Beef Board said it’s a ‘fictitious credit.’ And I asked him, ‘Really, Congress passed the law with a fictitious credit in it?’ The way I interpret it is that it says the producer will pay $1; of that $1, they can leave up to 50 cents, and they shall receive a credit from the Cattlemen’s Beef Board. If it’s implemented like it’s written, it gives the producers power over where their dollars are spent. That, to me, sounds more like something Congress would write. It’s the producer’s dollar, and he/she can give up to 50 cents to the Beef Council or all of it to the Cattlemen’s Beef Board. That simple interpretation alone could take back the $10 million that NCBA gets through the Beef Federation.
“During my service, some people would say, ‘You are our conscience, Dave, but…’ I would think, ‘Why not use your conscience? Why the but…?’ But that’s what we have lost. We need common sense. They tell you to have an open mind when you serve. But they are playing games. You have to have conviction if you are serving on the beef board. We have to be responsible. We are so far from the intent of the act of Congress today. Thomas Wilson sold the idea from the beginning that the checkoff would help promote the beef industry. Yes, it has been political from the beginning. Now it’s totally about keeping the politics going and not the cattle producers. Now the ends are supposed to justify the ‘Al Capone-style’ means of getting there. My grandpa was right.”