The almond and sheep industries produce vastly different products, but their leaders offer the same message on checkoffs: Producers must support their product in the marketplace.
"If there is going to be market development by a commodity, the industry has to do it," says Rodger Wasson, president and CEO of the Almond Board of California. "If we stopped our self-help programs, the processors would not do it."
Peter Orwick, executive director of the American Sheep Industry Association (ASI), says "If you do not have funding to support your product and support it consistently, there is little or no interest in moving the product to consumers and no excitement to market the product."
The sheep industry lost its ability to collect checkoff funds in 1993 when Congress eliminated the National Wool Act. Producers paid 8 cents/lb. of wool and 5 cents/lb. of lamb under the act. The congressional decision ended the checkoff dating back to 1955.
Without the benefit of $8 million a year in promotion money, American producers had no defense against lamb imports. From 1993 to 1997, imports of lamb from Australia and New Zealand increased 47%, from 40.1 million lb. to 60.4 million lb., according to the U.S. International Trade Commission. The U.S. Commerce Department figures show 70.2 million lb. imported in 1998. U.S. producers raised 233.8 million lb. of lamb in 1998. The ASI estimates that foreign suppliers spend $3 million a year promoting their product.
Now, the ASI is part of an industry-wide coalition to reestablish a checkoff. The industry proposal to USDA calls for an assessment of 1/2 cents/lb. on live weight paid by producers and feeders and 30 cents/carcass paid by packers. Orwick expects $3.8 million to be generated annually.
Depending on the USDA, collection of funds could begin by the end of this year. The industry proposal requests a delayed referendum vote 18 months after the implementation. Orwick hopes it will help U.S. lamb regain its place in the market.
"The absence of an adequately funded American lamb program has hurt the visibility of our product in the nation's meat cases," he says. "It opened the door to dramatic increases in foreign lamb's presence due to their substantial promotion programs. Meat companies did not step in and make up for the loss of a nationally coordinated lamb promotion program."
The Almond Board has a $18 million budget for the next fiscal year. There are 6,000 growers of almonds in California, the only place in the country with the appropriate climate for growing almonds. The region produces 75% of the world's almonds. The nuts are processed by 105 processors, who pay the 2.5 cents/lb. checkoff fee. The Almond Board regulates the processors and quality control, has the authority to set a reserve if almonds are in over-supply and handles advertising and promotion of the commodity.
Wasson cites a 28% increase in domestic shipments and attributes the market growth to grower support for building demand through the checkoff program.
"Our industry has been able to continually grow; the funding has a lot do to do with it," he says, noting that growers estimate $3-$7 return on each $1 invested in their industry through the Almond Board.
Wasson has worked for beef, pork, lamb and wool commodity groups and has worked as a consultant to other commodity groups. He understands producer frustration when low prices hit and the industry faces stress and changes.
While he recognizes the issues facing the pork industry, Wasson suggests examining policies, governance and committee appointments rather than dumping the checkoff programs altogether.
"There is reason to be concerned, but giving away the program that can find solutions is not the answer," he says.