#56 - Andy Bishop, Dumbing Down the Checkoff

Andy Bishop is a cow-calf producer from Bardstown, KY.  He also serves as a loan officer at their local bank. In addition, he currently serves as Chair of the Cattlemen's Beef Promotion and Research Board.

Cattlemen's Beef Board | Beef Checkoff

Transcript

Microphone (Yeti Stereo Microphone): 0:06

Thanks for joining us for episode 56 of practically ranching. I'm your host, Matt Perrier. As always the podcast is sponsored by Dalebanks, Angus in Eureka, Kansas. Andy Bishop is a cow calf producer and loan officer from Bardstown, Kentucky. In addition to these two day jobs, plus a young family. He also serves as the chair of the Cattleman's beef promotion and research board, or Cattleman's beef board for short. And of course the CBB oversees and manages our industry's$1 per head beef checkoff program. It's this volunteer job that we talk about most on the episode. We start with a little refresher about the somewhat complicated structure of the beef checkoff program. We touch on some of the challenges that our industry faces with this intricate program and its moving parts with various contractors and approval and budget and audit processes, and even communication with us as producers who pay into the checkoff. And then we finish up with a pretty interesting conversation about what may lay ahead for the checkoff. Now I have witnessed the beef checkoff from a lot of different perspectives. And I thought I knew most of the ins and outs of this program, but I still learned, or at least was reminded about a few things that even I had forgotten. As a supporter of a unified industry voice. I'm a believer in our checkoff. But I also think that we must consider how, or even if it can continue to be a relevant method for continuing the beef demand growth into the future. As a lender and a producer and the leader of the CBB, Andy also has a lot of different perspectives. He shares a few of those. And I think it made for a great conversation and one that I hope that you will help continue as you visit with other producers in your area. As always, thanks for tuning in God. Bless you all. And enjoy this conversation with Andy Bishop.

Matt: 2:25

I just read that May is beef month and so what better time to have the chair of the Cattleman's Beef Board than May to come on and talk a little about the checkoff and where we've been and where we are and where we're going. Give everybody, me included, a little introduction to you and your family's operation and kind of how you got involved with the Cattleman's Beef Board.

Andy: 2:48

certainly. And, uh, we're just excited about May beef month. Obviously check off contractors across the country will be working hard and a lot of state, uh. Beef councils as well, we actually signed our May beef month proclamation yesterday with our governor here in Kentucky, which is a annual event, which is gets us some publicity for beef in the state and give him some stakes as well. So that's always a highlight. Enjoy that. As far as my family is concerned, I live in Bardstown, Kentucky or outside of Bardstown, Kentucky. My wife, Megan and I raise our four Children there, ages 14 down to eight. And we raised them there on our small cow calf operation. And I guess you'd say I am the example of a Kentucky, uh, cattle farmer. We've got about 75 mama cows, Work off the farm, uh, as a, as an ag lender, been doing that for 15 years and work at a local bank there in town, which allows me to, to farm, you know, uh, after work and on the weekends. And, uh, we raise some registered Angus cattle, but mostly primarily commercial cows.

Matt: 3:51

Good, I think that would um, mirror what a lot of our producers out here probably understand exactly where you're coming from of trying to juggle all those, uh, all, keep all those balls in the air. How did you get involved with the Cattlemen's Beef Board? I assume through the State Beef Council first and, and how did that all come

Andy: 4:08

yeah, absolutely. So, you know, I go back to like, 2007, I moved back to Kentucky from Tennessee. I lived down there for a few years and moved back home and. Uh, went to my 1st state convention, uh, Kentucky cattlemen's convention. And just fell in love with. Not only the atmosphere, but the camaraderie among the producers, uh, it's kind of like you could just like a class reunion amongst all the producers. And I said, man, I want to be part of that. Uh, and so, as I got involved with Kentucky cattlemen's association, started learning more and more about the check off how that check off operated. Really like the marketing piece of the checkoff and the things that the Kentucky Beef Council was doing in particularly. And so, I moved into a leadership position row with the Kentucky Beef Council and became the Beef Council chair and served in that role for 3 years. Then moved over to the Federation, actually the Federation of State Beef Councils and started moving into leadership role there and the opportunity came available to run for the beef board. And so I put my name in the hat, wanting to get more involved in, in the checkoff discussion. And, thankfully was selected by the secretary of agriculture to serve on the beef board. And so I moved into that role 4 years ago. Now, I'm in my 4th year. immediately started pursuing leadership at the beef board level.

Matt: 5:29

So you threw out a few terms there that I think sometimes add to the confusion surrounding the checkoff, especially the beef checkoff, because it's the only, only commodity checkoff program that I've ever been familiar with, or I guess very familiar with. And if you would go through for folks what the federation, the Federation of State Beef Councils, what these individual state beef councils, and then, uh, of course, Cattlemen's Beef Board and the contractors that they help fund beef promotion and research efforts through. Walk us through all that, because It gets pretty confusing for a lot of us when we just say something about the checkoff and then we start hearing all these other terms and firms.

Andy: 6:14

You bet. And so I actually served as a Kentucky Cattlemen's president last year as well. And so I did a lot of county talks to county meetings. And so if it's okay, I'd like to break it down the way I do it. Those county meetings. It's easy for me. And hopefully producers can kind of understand. Usually they do when I leave those meetings. And so it kind of goes back to 19, the early 1980s, the check off when the check off began. At that time, beef demand was at an all time low, many states had, had started their own, uh, promotion of beef products and started their own checkoff programmings within each state. and so producers got together in the early eighties and said, Hey, why don't we make a national checkoff where we can all pull our money together to promote our product? And, uh, uh, That process failed 2 times in the early 80s, and then finally passed in 1985. A little over 70 percent of producers across the country voted in favor of, uh, of the national referendum that created the national beef check off. And that original check off was 1 dollar. When you pass that referendum in 1985 that created the act, which is the 85 checkoff act, and then you created the order, which is basically how those funds flow, but also how we can utilize those funds within the checkoff program to make, make everybody on the same page. And so the way that thing was created in 1985 was that original dollar, which is still a dollar today, uh, is split in half. And half stays at the state level at the state beef council. And that's what we call the federation of state beef councils. So all those state beef councils, there's 43 of those beef councils. They belong to the federation of state beef councils. They keep that 50 cents within the state for their promotion within the state. They can elect to send money up to the, to the national level through their federation of state beef councils. They can choose to partner with other contractors, such as the U. S. meat export federation or, or N. C. B. A. and we can talk about that a little bit further later on, but they utilize that 50 cents at the state level. The other 50 cents comes up to the Cattleman's Beef Board level. And that Cattleman's Beef Board is made up of 99 members that are selected by the U. S. Secretary of Ag. And so, the way that works is, uh, basically each state gets representatives on the Beef Board, and it's based on cattle numbers in that state. Those cattle numbers are determined by the U. S. D. A. and that controls how many seats you have on the board. Each state sends representative names up to the U. S. secretary of agriculture and U. S. D. A. U. S. D. A. will then select. A name out of that group, it's almost like a, an audition process. You basically send in a resume. You don't have to interview, but you do send in a resume. And I know in Kentucky, you have to interview for that position. To even be able to be sent up, but, uh, other states do it differently. U. S. Secretary of Agriculture chooses the name, and then you belong to the Beef Board, as a member of the Cattlemen's Beef Board. And of those 99 members, 92 of those are producers, just like, just like you and I are. From all over the country, obviously, and then the other 7 are actually importers. So they're import representatives. They're chosen by their importers to be sent up, but they're still selected by the U. S. Secretary of ag. And so that's obviously a question. I get a lot of wise importers. Why are importers on our on our beef board? Well, importers pay into the check off just like you and I do. And, uh, they either pay on a per head basis if live cattle are imported. Most of the imports are our lean trim that are imported in the United States. 72 percent of the of the imports last year were lean trim that we blend with fat to make burger. Uh, and so they pay up per, carcass equivalent, basically that USDA has a formula for so every, every box of beef has an equivalent of a check off associated to it, and so they pay into the check off and last year, it was a little over 7Million dollars that, uh, that we received from import check off dollars. So it does provide a tremendous value, especially on times when, uh, when check off receipts are down here, domestically, hopefully that clears that up a little bit.

Matt: 10:26

Well, it does. it does some. I'll be honest, until I got involved, similar to your path, I was involved with Kansas Livestock Association and then got involved with Kansas Beef Council, uh, Executive Committee or Board, and learned a lot that I thought I knew. And didn't, and of course it does change a little bit through the years and Kansas is in a unique spot with as many cattle numbers as what we have and so that's always a nuanced thing, but you know, even after sitting through a few years of those beef council meetings. I think part of what you and others within the cattlemen's beef board, within the quote unquote beef checkoff, catch all term, what we fight with producers is misunderstanding of just who and how those dollars get allocated. And that's a nature of the beast. As, as you said, in 1985, when we finally got this past, we, as an industry, um, anything, whether we like it or not, anything that goes through USDA is going to be pretty complex. and I get that, but I think that's one of the things that I struggle with, and I know you struggle with when we have to spend as much time in those Kentucky cattlemen's meetings or the Kansas livestock meetings or farm bureau or anybody else, just explaining and almost to a certain level defending that A: we have folks in positions to make use of those dollars in the best way possible. And B: this is how it's working, man, that confusion and that complexity makes it even harder. It just gives more opportunities for folks to poke a certain part of the beef checkoff and saying, well, Who decided that dollar would go there? And

Andy: 12:18

you bet

Matt: 12:19

it's tough.

Andy: 12:20

and it's a, it's an ongoing struggle, right? I mean, we, we, we deal with it every day. And so, you know, the other part of that discussion that I had with those producers is okay. At the state level, we have beef council members that are producers that make the decisions on how those dollars are spent at the state level. We just, we just had our 1st budget meeting. Uh, 2 weeks ago at our Kentucky beef council, and so those producers are in and off of that board. They get to see the request and how those dollars need or how our checkoff, uh, team wants to spend those dollars. But then ultimately, the producers get to make that decision when you talk about the national level, that 50 cents goes up to that national level and then producers set on on the committees. And so there's 6 committees at the, at the national level. And, beef board members and the Federation members that are that are selected by the Federation of state beef councils. They attend the summer business meeting. Where they listen to contractors and a contractor presents what they call an author authorization request. Basically, they're saying. If you approve me, here's what we would like to do with check off money and those committees, listen to those contractors, listen to those requests, and then provide feedback to the contractor, get a chance to ask questions that they bring up from their state level. Uh, but then they also get to score and rank those, contractors. That information goes on to the beef promotion and operating committee, and this is where sometimes it gets a little complex, but but it's very important to understand how that process works. So the beef promotion and operating committee is 20 members. 10 beef board members and 10 Federation of State Beef Council members. So those 10 members from the federation are from all states. Sent up by their state beef councils as representatives, and they run for a position. They actually interview and and go through the full gamut. Um, pretty extensive interviews, uh, to be honest, to be able to be a representative on that operating committee. Same thing happens on the beef board of the 99 members on the beef board. You put your name in the hat to be on the operating committee. You interview this year. We had 27, 27 applicants for the, uh, for the operating committee. We had 10 spots. Uh, and so you went through a 30 minute long interview process, with a nominating committee. The nominating committee is also made up of beef board members chosen by the beef board members themselves. that goes that happens at summer business meeting as well, where we select a nominating committee to interview and choose the operating committee. So, when you think about that operating committee, there's 20 members on there, and they're all producers just like you and I, that are chosen by their peers. so it's not a, not a government group. That's telling us how that, how those, uh, that operating committee should be structured. It's not the beef board employees. It is the beef board members themselves, that operating committee takes the feedback from those committees at summer business meeting, and then they listen to the contractors again in September. And then basically have to balance that budget and so give you an example. Last year, we had 48Million dollars worth of request authorization request by 9 contractors. We had 38Million dollar budget, and so we had 10Million dollars to shave off the top and determine how those dollars could be spent. So, it was a pretty heated discussion obviously, everybody has their own their own contractor programs that they like, and you like this 1, or you may not like this 1, but you also have to take into consideration feedback by the committees. there was a contract that didn't get funded last year, and it basically was because the committee scored it really, really low, and it was tough to make that decision because you contractors spend a lot of time and effort to to fund these programs are to come forth with these programs, and you'd like to see everybody get money. But at the end of the day, it's just doesn't work that way, especially if the committee members don't see that it's a good value for our dollar. Once those dollars are allocated by the promotion and operating committee, it then has to be voted on by our executive committee. And approved and then the beef board, actually, the full beef board votes on that budget and says, yes, we agree that you can allocate this budget in that manner that you've set forth. At that point, contractors go out and they do the programming that they've requested, and then they ask for reimbursement. And that's probably the biggest misconception, Matt, that we run into is. You know, I hear a lot of times, all of these contractors just get a blank checkbook and they get to go out and do what they want to. Well, actually, it doesn't work that way. The contractors have to go do the program, come back, submit all their, information to our audit committee. Uh, to our auditors, our internal auditors, they audit those financials to make sure that they're correct. Then USDA audits those. And at that point, once those, once they go through those two processes, then the check, then the contractor can receive the funds back that they've requested, but only after they've, done those programs. And so that makes it tough on a lot of contractors, because if you're asking for a lot of money, you've got to have that money up front to be able to spend. And that does weed out a lot of the contractors and the programs that they could be doing just because they don't have the money up front to be able to spend it.

Matt: 17:38

So I said it was complex.

Andy: 17:41

There's a long.

Matt: 17:42

you've even confused me. No, I, and, and guess what? You hit the high points, didn't you? I mean, honestly, that is about as simplified as you can make this process and still hit on the main points. And again, I go back to the fact that part of the battle that you and other leaders and staff and everybody else within the Beef Checkoff have to fight is that battle. onerous of a structure and I mean, and golly, I, of course you're in the lending institution in the financial world and so you're no stranger to red tape and government oversight and everything else, but most farmers and ranchers I think would throw their hands up in disgust and say, you got to be kidding me. We approved this project. We allocated the funds and now we have to go through a process almost as detailed to hear how they use those funds before we'll write the check. You got to be kidding me. There's got to be a better way, but with a government program, which is what it is, or at least oversight, there's probably no other way to simplify it. Is there,

Andy: 18:51

No, and I think it's important to remember, I think we lose sight of that because of the complexity that if we didn't make it fairly complex, and there weren't red tape and things that you had to go through. The misuse message that we often get. From check off"all the checkoffs being misused," right? If we weren't going through this red tape, then there may be some legitimacy to that misuse comment, but we know the amount of eyes and the amount of. Red tape that we have to go through. This thing is controlled down if you really want to get into the details down to 15 minute increments as far as your time is coded as a checkoff contractor on what you're working on. And our auditors have to even review down to those time cards...."okay. We spent 45 minutes on this project." Well, our, our auditor can say, well, actually, it should have only taken you as a contractor, 15 minutes to do that project. We're only going to approve 15 minutes of your use. And so there is a, Lots of eyes, a lot, a lot of set of eyes that look at these programs. And, and so I think that's why I get frustrated sometimes when they, when you hear the comments,"oh, you're just misusing checkoff, they're just throwing this stuff out there." Well, if you really saw the intricate details that go on behind the scenes to make sure that that doesn't happen, you'd have full faith in the checkoff.

Matt: 20:09

I am guilty of asking questions that sometimes I really don't want to know the answer to. In your financials, either budget at the beginning of the year or end of year financials, do you have the percentage Of time that is spent by your staff or the folks that are auditing these programs. How much of our beef checkoff do we have to spend just on those audit procedures and, or how much a year, I assume this is all volunteer work, but how much, how many of your hours does the CBB board have to spend just breathing down somebody's neck to make sure that they did 15 minutes worth of work for getting 15 minutes of pay?

Andy: 20:55

Yeah, and for me, for me, I can, I can answer that question pretty easily for me personally. It's about 85 days this year that I'll be out of state. Uh, away from my home, it's volunteer. Uh, that's that's. That's on my dollar, I mean, obviously the reimburse some, some travel expenses, but, uh, but basically it's on, it's on my time and my dollar, my cattle and my farms suffer when I'm not here obviously. But I'm passionate about it. And so, uh, you know, I commit to doing it. And then if you looked at zoom calls and meetings and things like that, my goodness, it's probably closer to 100 days worth of time that that I commit to the check off. And all of our producers are spending an ample amount of time, making sure that these things are going the way they're supposed to, from an overhead and administrative. Uh, standpoint, you'd ask that question about our, our staff. And the entire check off, so our entire beef board has to, uh, by law operate on a 5% administrative budget or less, um, and that's that is by law. And so, as check off dollars and receipts go down. Our administrative budget goes down accordingly, and so it gets pretty tough. Right? I mean, you're administering a 42Million dollar check off with 5 percent overhead. And I, I looked this up for somebody at a meeting. Last month that we were at, and they wanted to know, well, what's H. S. U. S. what's their, what's their administrative budget? And I looked it up and it's 39%.

Matt: 22:25

Uh,

Andy: 22:25

We're farmers, Matt, we're farmers and ranchers. We operate lean. and so our beef board has to operate lean as well. And that also that of that 5 percent budget, we have to pay for USDA oversight. So, you know, we, we heard about a law that came out and said, you can't use a. Checkoff dollars for X amount or this or that and USDA shouldn't be using taxpayer dollars to oversee checkoff programmings. Well, USDA doesn't and our government doesn't. The checkoff itself, oversees itself and pays USDA to oversee us. So, that's all included in that 5 percent administrative budget.

Matt: 23:01

Well, it's a giant task and, um, I, I don't envy you one bit because it's yeoman's work and it gets more expensive every day. And yet here you are operating on a budget that was set in 1985. And I don't know when on a per head, not a per pound or Per dollar value of the animal or anything else basis. And I want to touch on that in terms of where do we go from here in trying to make better use of cattlemen's dollars to actually do promotion research. But before we do, you mentioned contractors and I think sometimes, uh, some of those contractors are the ones that. that even add some confusion, not they themselves, but when their names get thrown into the mix, give us, I guess, the main five or six contractors to the Cattlemen's Beef Board to carry out those programs.

Andy: 24:01

Yeah, we can go by order of size. It probably makes it easiest. Obviously, NCBA is the largest contractor and, and that's one that even, you know, Producers here in the state to say they came up and convention congratulations for being an NCBA officer. Well, I'm not an NCBA officer. I am the chairman of the beef board. Uh, NCBA is a contractor to us. I'm, I'm not an officer for the NCBA. So, um, but they are our largest contractor. Uh, U. S. meat export federation would be 2nd, in size as far as, as, as what they, what they received from funding. Then it kind of gets much smaller. You've got, uh, uh, the North American meat Institute. They've just renamed themselves the meat Institute and they receive a little bit of funding. Uh, American Farm Bureau Foundation, uh, receives funding for stem work that they do with teachers across the country. Um, you've got Northeast Beef Promotion Initiative. They're up in, uh, in that Northeast section. Uh, so we send a lot of dollars up there. because they've got way more people than they've got cattle and I always go back. I think they said they've got 15. People for every head of cattle, where Nebraska has 5 head of cattle for every person. And so when you look at that, you think, okay, well, it makes sense. Let's send the money where the people are and it's easy to advertise there. So they would be another 1. Um, we've got the NIAA, you've got Media Importer's Council. So those are the, the main ones. Cattleman's, um, uh, US Cattleman's Association has been in the past a contractor to the checkoff as well. I know I'm probably leaving one out. I didn't write'em all down, to be honest, so I'm, I'm going off of memory here, but there are nine total contractor.

Matt: 25:39

And just in rough numbers, let's say percentages of the budget in terms of beef promotion, research, the producer communications portion of that, how do those all stack up today? How much do we spend trying to sell it as opposed to trying to make new products and things like that through

Andy: 26:01

there's, there's, there's 6, 6 budget categories and within those budget categories, all of them are pretty even as far as the funding amounts, except for producer communications. It's a, it's 1. 8Million that we spend in producer communications and. You know, that's a hot button topic. Should we have to spend that much money to educate the producer? And then how do we do that? You know, how do we get it out? You can put as much literature in front of a producer as you want. Is he going to read it? are they gonna once they read it, are they going to still understand it? And so that's something that's constantly changing. We're trying to figure that 1 out, but that 1, that is our smallest budget category promotion and research probably would be the 2 largest ones. And then, uh, obviously export as well. They export was about 8Million last year.

Matt: 26:46

I've had folks suggest that I, um, take some volunteer time and be on the cattlemen's beef board, or at least our state beef council again. And I, I laugh and say, you know, you do not want me in that room because you're 1. 8 million that's going to producer communications would go to zero. If I was there and I hate saying that, especially here on a podcast that guess what is focused on producer communications, but my goodness, the amount, and I know that's a pittance, but still it's, it's 1. 8 million that you all could have used to sell beef to somebody who doesn't know how it's raised and the amount of time. And, and, you know, I would venture to guess that, well, you said it yourself. All those nights that you spend away from home, all those times you're on a cattleman, state cattlemen's association program or whatever else, you're spending a lot of time communicating with producers. And that's zero in that 1. 8 million. Man, I'd like to wave the magic wand and make that go to zero because so often we spend a bunch of time educating folks that truly don't really want, they're, they don't want to hear what it is that we actually are doing. They're wanting to look to see what it is they wish we were.

Andy: 28:04

I fully agree with that. 100%. You know, and that's probably that's my biggest push as. The, the chairman of the beef board this year is 1) increased transparency, but. Let's get producers out telling the check off story and I saw it last year. I spoke at 30 county meetings across our state last year. And you go in and you say, I'm going to talk about the check off. And immediately you can see people in the room start squirming and getting just mad immediately by the end of that discussion, which usually would take me about 30 minutes to really lay out the check off how it operates and then some different programs that we do and why they don't see those check off dollars at work. A lot of times. then you just see the light bulb go off. And at the end of the meeting, those same people that were mad up front come to you and say, you know, I never, I never, I had no idea that the checkoff was doing all this programming. Why, why am I not seeing that? And I said, we're, we're sending out publications. We're doing emails, we're doing Facebook stuff. We're doing stuff at the, at the stockyards levels. It's everywhere around you, but you just don't see it. And so that conversation is a free conversation. Right? And so I think that conversation provides inroads and I wish there was a way that we could have that conversation nationally at one, one time, right? Or a couple of times where you can get as many producers as possible and let somebody and I call it for me and my purpose, I call it dumbing down the check off where where you basically you put it simplistic form where people can understand how that check off operates and how those dollars being spent. And in many cases, why you don't see that dollar. Um, Unfortunately, that's still tough to do. And you, you, you hit it on the head is there's a lot of producers that you can still have that conversation with, or put as much literature in front of as you want. And they're just, they're always going to be anti Checkoff.

Matt: 29:56

Yeah, it's frustrating even for me who doesn't spend all the nights away from his family and

Andy: 30:01

Yeah.

Matt: 30:02

cow herd is what you all do. Um, it's frustrating to see that because I, I grew up, I was born in the early seventies. I mean, mom and dad wore the big buttons that said Beeferendum, I mean, they were, they were all for the checkoff the first two times and still were obviously by the time they finally got it passed. And at that time there was just this massive support for the checkoff and we've seen that wane through the years and people can point to all different reasons and I think one of those contractors, that you mentioned is probably the lightning rod for so many folks that want to, want to, uh, criticize how checkoff funds are spent, especially when they go to the National Cattlemen's Beef Association and, and, um, You know, again, we want to talk about confusion. The fact that we've got NCBA folks that are, helping with those contract dollars through CBB, and then we've got folks down the hall that may not ever see the check off side who are working on policy. It's totally separate, but the fact that they're all under the same building and under the same name and get the same check from somebody above... it, it adds to the confusion. And I, for one, am a huge, proponent of the merged organizations. But unfortunately, we as an industry did not, accept that very well in 96 or 98 or whenever it was that that happened. And, and I think we've been fighting it ever since. And it's frustrating to me that. For lack of a better description, an umbrella name that is supposed to be the, all encompassing holistic, let's all talk about the entire beef industry from conception to consumption, how in the world that got misconstrued as,"Oh, checkoff dollars to go to DC and lobby some Policy that I don't agree with" is it's frustrating. It's, it's fascinating to me that that narrative could get started and go as far as what it has, but it's frustrating with all the work that you all have done and all the firewalls and everything else that have been built, that we still have folks that are saying, yeah, they're using your checkoff dollars to go to DC and lobby against something that you don't believe in.

Andy: 32:31

You talked about those administrative dollars, uh, and we spent a lot of them to make sure that that that firewall is protected that you that you talked about where those policy dollars or those checkoff dollars are not going for policy stuff. That probably gets more scrutiny and more sets of eyes on it than anything to just make sure that that's there because of the narrative in the countryside. and it's also easy to point the finger at NCBA because they're the largest contractor. They are, they're the largest cattlemen's group, right? I mean, they're massive. They do great work as a contractor. We love their programs. Um, and I think most producers once, Once they come see the programs that that NCBA is doing really begin to understand the magnitude that NCBA as a checkoff contractor is having on beef promotion and the checkoff in itself. And so, you know, The beef board's unique, Matt, in that there's a lot of, a lot of people that are on the beef board that are not NCBA supporters, because of the way, the way we're appointed, right? And which is a great thing. you can say, hey, there's, there's, there's people from all across, uh, all walks of life on this beef board as far as producers are concerned with all different mindsets. And I see a lot come in with, with kind of an anti NCBA sentiment. And after they see the programming that they're doing, uh, it kind of, It kind of squashes a lot of that. The efficiency of putting those groups together is something that we need. Um, we do it in the state of Kentucky. Our beef council is housed under the same roof as our association and, and there's savings in that. We talked about that original dollar, that buying power today is 32 cents of that original dollar. And so, If we're not doing things efficiently and working as streamlined as we can, the promotion that we can do with that dollar gets less and less. And that's already something that we're facing. And so, um, we've got to be creative. Um, we do what we can to dispel the myths between NCBA and the policy dollars and those kinds of things. And, and from an audit standpoint, that's where we really hang our hat and say, listen, this thing is getting reviewed by our auditors by a 3rd party auditing firm by the USDA auditing firm. And then we have a budget audit committee that overview that oversees everything. So, 4 sets for groups of eyes that are making sure that those dollars are being spent the way they're supposed to.

Matt: 34:59

Well, it is a complex process and we keep bringing that up at this point in our conversation. I think I have either a: Bored to tears, everybody who already knows that there are firewalls in place to make sure these dollars are used the right way and they already know the structures and they've set through those board meetings that you have, or B: they've shut us off because I. of an organization or of a contractor that they may disagree with politically. So now I want to, I want to turn the page and I want to flip to something that's, that's a little bit tougher. I think to talk about even than defending the structure of the beef checkoff. And that is where do we go from here? 1985, we pass a dollar a head check off for all cattle at change of ownership. And at that time we were hunking and chunking and throwing onto a white foam tray big pieces of meats. And in one box, not just one truckload, but in one box, we may have everything from a prime yield grade five to a. Standard yield grade one and the same retailer got that stuff and had to do something with it. Fast forward to today. And thanks to value based marketing and cooler sorting and branded beef and everything that we've got today, we've improved quality and consistency, but we've also changed the way we merchandise beef and beef products. Like you said, we've got about a third of the buying power today that we had in 1985. When we go to using these dollars on research and promotion and exports, uh, we, we market and merchandise cattle a little differently. We've got bigger folks owning more cattle and sometimes a channel marketing and, and supply chain management that, that they do their own thing from womb to tomb. And they're, Marketing, merchandising it themselves. Do we need to, either A, increase the beef check off threefold or fivefold or whatever it may be? Or just throw the whole thing out and start from scratch and say, How would we build it if we were building it in 2024, not 1985?

Andy: 37:24

Oh, man, this, this could go for a while, Matt. We may not have enough time here.

Matt: 37:28

Ha ha ha ha! Like I said, we're down to, we're down to two dozen people finally listening

Andy: 37:33

That's right.

Matt: 37:33

we can get down and dirty. Ha ha

Andy: 37:35

to you 2 dozen for sticking in, but so great question. Uh, you look at other commodity programs and so let's point out pork. For example, pork is, uh, their check off was designed a little differently in the fact that it's a value driven 1. Their checkoff last year, I think was 108 million where ours was 42 or 43 million. Uh, we are the 2nd largest commodity group in the nation and we're the 7th largest checkoff. And so when that 1st dollar was, was, uh, approved or passed by producers, I think that was a win win and everybody was excited just to get a dollar passed. you look back at it now in hindsight and you say, Man, if we could have done some kind of a, You know, inflation index or something like that, or a value based index where that thing would move with the value of cattle in times like today, where we have extremely high markets, we might be generating more more revenue for the check off, even though receipts are down as far as cattle are concerned. But we can't change that without opening back up that 85 act, as a producer, I can speak to it as a producer. We need more dollars. no doubt about it. We would have to have 3 times the dollars today to equate to what we were doing. You know, when we passed that 85, and so that's, you know, you hear producers that were used to seeing a beef ad on TV and family sit down at night and watch TV together in the eighties. I grew up in the eighties. That was my time. And so there was not a night went by that we didn't watch some kind of family TV show together and you could see those advertisements. Those same ads today would cost us. Ungodly amounts of money, a Super Bowl advertisement. We get that a lot... why aren't we not advertising the Super Bowl? Well, a 30 2nd commercial at the Super Bowl. I think it's 3Million dollars.

Matt: 39:31

Well, look at it this way, you wouldn't have to have near as many meetings because you could make that budget by ten ads and you're

Andy: 39:38

That would, that would be pretty easy. You know, uh, yeah. So 3 million and everybody says the NCBA gets all the money there... their promotion budget last year was 7 million. So that take almost half of their promotion budget with with a 32nd Superbowl commercial. Now, the cool thing is Matt, what we did was. Here in Kentucky, we did, we did an ad on the Superbowl. Locally, and it was, oh, it was great. And it didn't cost us hardly any money because these local channels can, they get so much spot, but, but what we've realized we can do is, is get pretty efficient with those dollars and advertise on social media. For example, uh, tick tock, Spotify, YouTube Pandora. And that's part of my discussion when I talk with producers is, and I usually pick out 1 in the room. When's the last time you've been on tick tock? And they'll say, what's tick tock. Well, have you been on Spotify this week? I have no idea what you're talking about. Well, the, the, the point of that is you don't know what I'm talking about because you're not on those platforms, but I'm not, I'm not advertising beef to you. I'm not trying to convince you to eat one more steak a week. but who am I advertising to? It's those 25 to 45 year old mothers that are making buying decisions and guess where they're spending their time. Tik Tok, Spotify, Pandora, right? Uh, I saw an ad last week that, that, um, Gen Z spends seven hours a day on social media platforms.

Matt: 41:06

Wow. Yeah,

Andy: 41:11

it's cheap. we get a lot of calls in Kentucky. Uh, why we need a beef camp. We need a beef billboard at this red light. Well, billboard costs 10, 000 and you may get 10, 000 people that go by that thing a day. And I always say, you think that mom who's going to make that buying decision when she pulls up to that red light is looking up at that billboard saying, man, I need to cook my family beef tonight. No, she's on her app looking at Spotify, TikTok and Pandora while she's at the red light while somebody's honking the horn behind her. It's so cheap. I can reach 5 million people with that same 10, 000 ad on a social media app. And I can reach 5 million people versus 10, 000. Those numbers are paramount, but that's why producers a lot of times don't see these dollars. I'm gonna give you an example. NCBA did a, and I don't want to, I don't want to think I'm promoting NCBA here, but this was 1 that really stood out to me. I'm on the domestic marketing committee. And so promotion domestically is, is it's kind of my bread and butter. I love it. But NCBA did a call share program with Sam's club where Sam's club put it's up part of the money and NCBA put up part of the money. And we're, we're encouraging that because that spreads our dollars out. Right? Makes them more efficient. For every dollar they spent in that promotion over an 8 week period, it generated 93 dollars in additional beef sales that they normally don't have in that same 8 week period. And they look at it year over year. So Sam's Club would go back that same week or that same eight week period a year before and say, how much money did we generate in beef sales? That 1 spend for every dollar was 93 returns. When you look at programs like that, and essentially what it was was on their app, you could log on. It was a roast recipe and an influencer was cooking a roast and how to prepare it. You could click on it. I think it put it in your cart with the ingredients on the recipe. Boom. You got it in there. You're ready to go shop. Those type programs are, are, are pretty cool. And it allows us to keep beef at the front, front of the plate. These retailers realize that if we can put beef in the cart. That cart value is going to go up tremendously and so we're doing a lot more of those type promotional programs. And I think once again, we're a victim of our own success because we're using that dollar efficiently, but because we're using that dollar efficiently, most producers not going to see it.

Matt: 43:39

I was just sitting here thinking the old adage necessity is the mother of innovation or of invention... because you all have had to make those hard decisions and because you've recognized that, guess what? We can't take this shotgun approach to beef promotion anymore. And just put a little here, put a little there, put a little at the billboard at the Cosby show at everything else that people wanted us to do in the eighties and nineties. We've got to take a sniper approach and make one shot and make sure it counts and that's what you all are doing. But in the process, yeah, you may be getting a huge ROI on our dollars, but from a, uh, social capital within our industry. You're losing the battle because producer communications, what we think of as producer communications, and this is what I've maintained since the beginning of my exposure to the, to the beef checkoff. What we think is producer communications, isn't producer communications. They want to see that ad talking to a beef consumer so that they can puff their chest up and be proud that. By gosh, that's my checkoff dollar at work. And I think that's why when we spend money on quote unquote, producer communications stuff, we can set at the checkout line at the local livestock market or stockyards or whatever else. It's not moving the needle. The people are not going to read that. What they want to see is that checkoff dollar being used to work. And like you said, when I'm not on Tik TOK and I'm not watching the cooking show or whatever else that we are trying to reach our target market, I don't see it. Um, I, but I, you know, the Sam's example is a great one. We saw one locally that I just, I love because I get a kick out of the territorial nature and, and, uh, legal battle nature of, of society today. We had a deal locally and you may have even heard about it on the national stage, but our Kansas beef council had done a partnership promotion with the Kansas state athletic department or maybe Kansas state football a couple of years ago. And following that, and I'll get some of the details screwed up, but following that, the offensive line of the K state football team made hats or t shirts or something about the beef that they had on the offensive line of K state football. Well, they used. Kansas Beef Council's logo and those, that beef look and instead of lawyering up, which a lot of people probably would have done and said, Hey, cease and desist letter, here you come. That's our logo. You can't use it. The minds at our beef council called them up and said, Hey, you haven't done anything wrong, but that's kind of our logo. Why don't we team up? And they did a tailgate promotion and they made hats and they did an NIL sponsorship with these, with the offensive line, the K state football team. It was perfect. It was perfect. And it cost them a pittance. And in fact, they probably spent less on this whole two year promotion than they would have hiring a lawyer to go in and get our trademark back.

Andy: 46:56

Absolutely.

Matt: 46:57

Stuff like that is what every state beef council, the CBBs contractors, NCBA, meat export federation, farm bureau, all these folks... Every one of them, whether we want to admit this or not at the local sale bar and cafe, every one of them is governed by producers. And they are saying, look, you got to do more with less. I don't want my check off raised. I don't want my dues raised. You've got to figure out how to get more out of the system. But when we as producers say that, we also have to realize that means. We may not be seeing the things that you all are doing because of that. I, I still think that it's a well oiled machine. I think it's probably better oiled today than it's ever been. But at some point, I think that we as an industry are going to have to take a deep seat or a deep breath or step back or whatever metaphor you want to use and say, how long can we keep doing this? How long can we spend? Keep spending a buck ahead and try to fund a multi billion dollar industry that this has grown into in 2024. And those are going to be hard discussions.

Andy: 48:15

I'll speak to that as a producer and a banker, not as the Beef Board Chair, because I'm not allowed to talk about check off, increasing check

Matt: 48:21

Oh, that's right.

Andy: 48:22

that because of rules, right? And so, but as a producer and as a banker, I'm a numbers guy, Matt. I look at numbers and we've got 10 state beef councils that are less than 200, 000 in receipts.

Matt: 48:36

Wow.

Andy: 48:37

If we get much smaller with check off revenue dollars... This herd gets much smaller. Those beef councils will no longer be operating. And now we don't have boots on the ground in those states promoting our product. So as a producer, I can say, you know what, if I spent a dollar in 1985, I could gladly spend two, three, four dollars now for the same promotion to make sure that my product is protected and that these guys have the amount of money needed to promote the product the way they need to. You know, you talked about that, uh, Kansas state program and that thing is spread. The example you gave and so like NE BPI did one with UConn last year. Well, they had talked to ESPN about advertising. Well, it was just. It was an ungodly amount to advertise on ESPN. So they promoted UConn basketball and they had a banner ad running around UConn's arena. And so we did it at UK here in Kentucky. And so UConn was on TV as well as UK. And every time they were in the arena, you could see that beef ad scrolling behind the scenes. And so we're getting promotion that way by, by, by getting creative. But at the end of the day, um, we can only get so creative with that dollar. And I think, I think it's time for producers to To come together and say, what do we need to do? How do we need to generate more revenue? And there's different ways that you can do that. I obviously can't lead that as the, as a beef board, but, but producers can. And I think it's important that that discussion begins to happen again. You know, I think we. Most people might see the value of the check off when we do surveys all over the country for producer sentiment about the check off. It's always over 70 percent approval rate. Most of the time around 75 percent approval rate. When you look at 2022, we set a record for beef demand. And we also set a record for the highest retail prices in history. If nothing else, that says, you know, what consumers have faith in our product, they love our product because of the quality, the safety and and and the nutrition message that we've gotten out through check off spending. And and they're willing to go out and pay for it now more than they ever had before. And I think that's that if nothing else is a testament of what we're doing with the check off.

Matt: 50:49

how it has unfolded because you talked about that low in beef demand and I think I've seen everything from 1994 to 1997 is when we really bottomed out, but we were well on our way when the beef checkoff was formed and that's why it was formed. That's also why This merger of the National Livestock and Meat Board or Beef Industry Council and National Cattlemen's Association and everything else made NCBA because we said look, for centuries, now for a couple centuries, we in the beef industry have had this segmented approach that I raise calves and I sell them to somebody else and you know, He raises stocker cattle and he sells them to somebody else. And she raises feed yard cattle or they sell very isolated, very focused on what makes me money and very distanced from the consumer. And I graduated. Folks on the podcast, all two dozen of you that are still here, folks on the podcast, heard this way too many times. I graduated in 96 at the low of the cattle cycle. And I went to work for the Pennsylvania beef council. I didn't know that I was a staff

Andy: 52:02

no, I did not.

Matt: 52:04

Yeah, I wasn't there for long. I was there for about a year when an opportunity came up, uh, with the Angus association, I went to work for them down in Texas, but I was at some of those. Early checkoff side meetings. And it was confusing to everybody then because it had just come together as a merger. But there was a sense of optimism that I have maybe never seen since. And that was,"we are finally all in the same room. we don't all agree, but we're all in the same room and I think we can get something done." And we started having all, you know, we had the Beef Quality Assurance program and, and the National Beef Quality Audit had just come down and we were moving the injection sites from the, the round up to the neck. Why? Because the packers that were in the room were telling us this is how many top butts and sirloins were getting back with abscesses and all this stuff. And we really started making some progress. And meanwhile, there was this little smoldering firestorm that people said, I don't know that I wanted progress. I don't know that I wanted to be focused on beef quality or demand or anything else because it's changing the way I have to do business, or it's making me more uncomfortable. I'm not sure. All of us are pretty innovative. We can figure out how to do, to change our business, to make sure that we stay in business and do what's needed. But it's fascinating to me to see that from 96 to today, which incidentally was not that that was the only reason, but that was when the merger took place. That we've got, as you said, higher beef demand. Record high prices, higher profitability for most folks and most segments, and yet more distrust about other people within our industry or within other organizations or whatever the case may be. And, and. Human nature is fascinating but that, that blows me away that we can look back at what we've done when we finally all, as that person said at one of those initial meetings, we're finally all in the same room and talking about this stuff. What we've done since we started hearing the challenges of the other segments, how can we not go, yeah, Arm in arm, let's get this thing figured out. We don't all have to agree on every policy that's for another part of our organization, but I think we can all agree that, hey, we need to spend money where it's gonna return, and that is with beef promotion and research and exports, and let's figure out the best programs and, and move on. And, and if and when we need to change that structure, whether it be increasing the per head, I'm one that thinks that it probably needs to be somehow tied to the value. of that beef or carcass or wherever you want to place it. But you talk about not sustainable, the current model of the act and the order at a dollar per head into eternity. It's the definition of unsustainable.

Andy: 55:02

it is.

Matt: 55:03

these are conversations that have been being held for years. I've been hearing them at KLA and Kansas beef council meetings for years. And yet every time we get very far into it, somebody will say, but yeah, what about that 20 some percent that don't like to check off as it is now? they'll fight it tooth and nail and that, you know, that's, that's always the case, but I

Andy: 55:26

Well, you know,

Matt: 55:27

that

Andy: 55:28

I can, I spoke at a meeting last year and a disgruntled farmer caught me afterwards and wanted to give me his definition of what beef to man truly was and. He said, you're not, you're, you're not promoting beef. You're not driving beef to man with the checkoff. You're just, you're just, uh, you're just putting information out there. Consumers are always going to purchase our product, all of the products that we raise. And I said, yeah, you're right. They are, but at what price? And he said, well, what do you mean at what price? I said, do you want it to be the price of chicken? Or you want it to be the price of a ribeye today. And he said, well, I want it to be the price of a ribeye today. And I said, then consumers won't always purchase everything we produce at that same price that they will today. If they don't have confidence in your nutrition, your safety, your taste, everything we're doing behind the scenes. And, you know, I work off the farm. I spend 150 a year in checkoff dollars. That's my contribution to the checkoff. And. I'm promoting beef in Japan. I'm, I'm doing nutrition studies. I'm doing, Salmonella research studies. I'm spreading the sustainability message that to people that I can't normally agree with any way that that don't understand what we're doing on the farm, but there's someone constantly working on our behalf as a producer with those checkoff dollars to tell those stories to meet that 99 percent of consumers that are not us on the farm. We're 1%. If we're trying to tell our own story by ourselves, we're not going to get very far and so knowing that I've got people out telling that story on my behalf that are marketing my product on my behalf. I mean, I'm going to South Korea tomorrow. Uh, and Japan this week, and to promote American beef, and I'm teaching a group of high school students in Japan never thought I'd be able to do something like that. So, but tell them about life on the farm and ranch and helping them relate to what we're doing, how we take care of our animals and. That's the stuff that a lot of our producers can't see and I wish they could. And, and I think that that sentiment, that 20 percent that you talked about would, would go up considerably if, if they could see these things. And if, by all means, if you've got ideas on, on how to help, help me help us get that message out there, I'd certainly be open to anything.

Matt: 57:44

this podcast episode is one of those methods that I hope will. And everybody that's listening that is still on, and I know that there's a slug of them who still are. I think that we can help in that regard. It doesn't have to be the CBB president. It doesn't have to be the paid exec for XYZ State Beef Council or whomever else that's telling the story of the beef checkoff. It It has to be us. It means more from a producer than any talking head that gets sent to the cattlemen's meeting. Uh, whether that be at the local livestock or cafe or after church on Sunday. there are questions and uncertainties and everything else about, and like I said, I go back to the structure of the beef checkoff, but how our checkoff works and quite often in the absence of us as producers being engaged in knowing those answers. There's a little bit different type of narrative that gets told. And I think that's, um, I think it's up to us. I think it's up to us to, to help you all out and do that. a few minutes ago, you said that you. Your contribution to the beef checkoff is 150 annually. Anybody that's listened for the last 50 some minutes knows after hearing everything you've done that, that it's a lot more than that. And every single person that sits on a state beef council board or exec committee, the cattlemen's beef board, the beef operating committee. Any of these folks who have a hand in trying to figure out ways that we can promote beef through our checkoff. my hats are off to you because it's, it's a thankless job. And again, you, you, as I had a guy tell me one time who was on our local or state beef council for a couple of years and then couldn't get off fast enough. He said, I came on here to try and help influence beef demand in a positive manner. And we had to spend so much time defending ourselves, that I couldn't handle it... I just got so frustrated and I think we lose a lot of people like that. And I think that producers, when we start running the check off down or anybody that's tied to that, whether it's a contracting entity or otherwise, we have to recognize that if we truly are asking folks to do more with the dollar that they're getting off of that steer that we sold, we better quit making them spend time defending it. Because that's the biggest waste of the beef checkoff in my opinion.

Andy: 1:00:19

You bet. And, you know, I challenged our Kentucky producers last year at our convention and, and in our magazines and I wrote articles for every month and I've challenged the Beef Board members. Have a two minute elevator speech. Go to beefboard. org, beefboard. org. You can get any program you want in the checkoff. You can see how all the dollars are spent. You can see those programs. Just pick out one or two things that resonate with you. That you can tell that story and I always use an example. We've got, you know, a lot of row crop row crop farmers here in Kentucky that also have cattle and my example to them is if you can feed your corn to your cattle for 4 a bushel of feed value, but you can sell it to my distilleries here in Barchtown for 6 a bushel. All right, and then you can take that 6 dollars Bush don't go back and go back and buy a 4 dollar commodity feed and feed your cattle. Would you do that? Well, all hands go up, right?

Matt: 1:01:13

Mm hmm.

Andy: 1:01:14

I'm contributing to a check off the same way that somebody is marketing for me, but also by giving money to the meat export Federation. For example, I can go generate more revenue in foreign countries for our product. And in turn. Be able to utilize our get rid of those products that nobody wants over there. Um, and so when you tell those kinds of stories, and you get something that resonates with producers, whatever, what is it that drives you? What's 1 program you see that drives you if you can just tell that story, it's going to open that dialogue instead of letting people blast us on social media, that's probably been the demise of what of the check off as far as people behind the check office, social media and technology, because it's so easy to get a false narrative out there and get a big audience. Unfortunately. so I just encourage producers to. Find a couple of programs within the check off, make those phone calls and figure it out a little bit more if you have to, but, but don't be afraid to have those conversations because they're going to come up quite often.

Matt: 1:02:17

Yeah, they always do, always have, and you're right, social media has made it even easier. But I think we also have to remember that while it's easy to get pulled down by the vocal minority, we have to stay focused on those folks that do believe in what it is we're doing. Those are the folks that you have to keep. In the back of your mind to be inspired. And I think that, that, uh, you have, and we'll continue to do. And hopefully, like I said, we, as producers can do what we can to not just be a cheerleader, but also come forth with ideas because you're going to need them, we're going to need them. And ways to, again, do more with less and, or figure out a better structure going forth to make sure that we work with all of the nuanced beef industry as it is today, because it is a lot more complex. It is, there's a lot more gray areas as we move toward more vertically coordinated marketing programs and supply chain initiatives and all these things that the checkoff may have to change with it. and we as producers, I think have to be engaged in that conversation going forth. Well, Andy, I appreciate you being here a bunch, uh, appreciate your time that you've done here the last hour, but especially all those meetings and time away and, and helping lead cattlemen's beef board and, making sure that, uh, you use those and allocate those dollars as best we can.

Andy: 1:03:38

Matt, I appreciate being able to have the conversation that we've had and, and getting some dialogue out there that hopefully some producers can can hear and understand and go to beef board dot org. See how those check off dollars are being spent and, and, uh, keep telling the story.

Matt: 1:03:53

You bet we'll sure do it. We'll take care, safe travels to the Pacific Rim and we'll, uh, talk to you down the road.

Andy: 1:03:59

Thank you, sir. Have a good day.

Matt: 1:04:01

You bet you too.

Microphone (Yeti Stereo Microphone)-2: 1:04:03

Thanks again for listening to practically ranching brought to you by Dale banks, Angus. This doesn't happen very often, but we are selling a small group of registered cow calf pairs. These are foundation females with April calves side. The cows are mostly three and four year olds. Calves have all been vaccinated and we've, collected genomics on them. Of course these cows stem from the same foundation, cow families that have been developed for decades here in the Flint Hills of Kansas. And I'll make a nice set of registered or even top in commercial females. Plus we have about a dozen yearling bulls that are for sale and for information about either of these groups, just email me, Matt perrier@dalebanks.com or text 6 2 0 5 8 3 43 0 5. Again, thanks for listening. God bless. And we'll be back again in two weeks.