The business of the U.S. pork industry hummed along on cruise control for a decade or more after the mandatory pork checkoff program was enacted as part of the 1985 farm bill.
Managed by the National Pork Board, the checkoff dollars provided needed funding for pork promotion, research and producer education.
In the meantime, the National Pork Producers Council (NPPC) collected non-checkoff contributions to deal with public policy and regulatory issues. But advocacy work and the need for more financial support escalated.
“We've pretty much been on cruise control for 15 years,” explains newly elected NPPC Vice President Don Buhl. “Basically, the checkoff (deduction) was taken out of our check and the work that needed to get done, as far as public policy and advocacy, had somehow gotten done.”
But late in 2000, the cruise control button was disengaged. And, in a sense, the mandatory pork checkoff underwent a recall. An anti-checkoff petition spawned a referendum vote and an outcome that was contested. Court challenges and appeals followed, leaving the industry sputtering along, mired in an appeals court process that now holds the industry and both organizations in limbo waiting for a final verdict.
Meanwhile, the barrage of regulatory and political challenges, aimed at an industry struggling to return to profitability, shows no signs of relenting.
Even though mandatory pork checkoff dollars cannot be used for public policy and advocacy initiatives, the past working relationship between the NPPC and the National Pork Board has left some producers with the misguided notion that their checkoff dollars fund NPPC, too. They do not.
That confusion continues to confound NPPC's attempts to engage pork producers into financially supporting their advocacy work.
Setting the Record Straight
To help set the record straight, Buhl, a pork producer from Tyler, MN; Jon Caspers, NPPC president from Swaledale, IA; and NPPC CEO Neil Dierks gathered to discuss the organization's current challenges and some initiatives they hope to tackle in the future.
Dierks leads off, “There's still some belief out there that there's some mysterious transfer of funds taking place between NPPC and the National Pork Board. There is no mystical transfer of funds. There never was,” he states emphatically.
Funds to cover NPPC's budget come from voluntary contributions from several sources:
“Producer consent” contributions are projected at $2.8 million in 2003 (half is returned to states);
Other allied industry contributions ($1.1 million from Pork Alliance memberships, company sponsorships, Packer/Processor Industry Council);
Profit-generating programs and events such as World Pork Expo (estimated at $1.3 million);
National Pork Board pays $300,000, annually, to rent the NPPC-owned building (approved by Agricultural Marketing Service);
State assessments generate $300,000; and
Annual dividends account for $120,000.
The producer consent program, chaired by Buhl, is a voluntary 10¢-per-head deduction launched in September 2002. NPPC has spent recent months working with packers to get the program up and running. Several major packers have signed on to make the deduction when producers give them the nod. To date, all packers contacted have been supportive of the program, Dierks says.
With current U.S. production at roughly 100 million hogs, if a dime were deducted for every $100 worth of sales, the till would ring in at over $10 million. “Right now, we have commitments to touch over 25 million hogs as packers come on line,” explains Dierks.
After the NPPC annual delegate meeting in March, the group's leaders began drafting a new strategic plan that will deliver their top priority programs.
“My marching orders from the board are to ensure NPPC is relevant in the future,” comments Dierks. “We're not trying to build infrastructure; we're trying to deliver results.”
Delegates also endorsed a resolution calling for a governance task force that will review a set of by-laws that have evolved through 20 years of amendments. At times, they can be confusing. “There needs to be some freshness, some clarity” brought to the planning of the new NPPC, says Dierks.
And, delegates called for the formation of a “contingency planning task force” charged with developing an emergency management plan should the courts terminate the pork checkoff.
The 10-member task force consists of all pork producers with representation from the NPPC, National Pork Board, plus at-large members.
The focus of NPPC and its member state organizations is on representing pork producers and industry stake-holders on legislative, regulatory and legal issues. Animal welfare, environmental and trade lead the list of issues that affect producers' production costs and their freedom to operate.
“What we're going for is the advocacy to give the people the freedom to operate in a manner that's flexible, but responsible,” Dierks says. “Everyone wants to use size (of operation) as a denominator. What I'm getting down to is — if you're a pig guy, you're a pig guy. Yes, there are differences in scale, but it's amazing how much commonality there is amongst pork producers.
“People are saying, ‘I'm concerned about whether I'm going to have the opportunity to run my hog operation,’” he continues. “Producers are saying: ‘We've got a set of problems here that we've got to address.’”
“I don't see that my interests are much different than those of the very large producers,” says President Caspers. “Our issues are basically the same. We (both) see threats to our operations in animal welfare. Animal rights groups basically want to put animal agriculture out of business. That's a serious threat to my operation.
“Couple that with environmental issues and we have tremendous battles,” he continues. “But, we could be in a much more serious situation than we are. At least we have rules and regulations that, with good management practices and recordkeeping, and proper handling of nutrients, we are able to operate and raise pigs and apply manure and get value out of that manure and, hopefully, do so in a profitable manner and still demonstrate that we can exist alongside the public in an environment that's really beneficial for everybody.”
“If you talk about people who depend on this industry for a significant part of their income, there's a lot of commonality there,” agrees Buhl. “I raise crops, too, but if it weren't for pigs, I wouldn't be farming.
“What's it going to cost me if the place I get my pigs from can't care for their sows in stalls?” he asks.
“People's willingness to sign on is not so much whether they agree with NPPC philosophically, it's more that they are trying to figure out where their place is in the industry,” says Dierks.
“People have to decide if they want to fight these battles themselves or if they want to work together,” Buhl continues. “I think we can get picked off one by one. But, I also think that if we confront the issues, we have a much, much higher chance of success. Aren't those good reasons for people to work together?
“The organization will be what the people who are funding it want it to be,” explains Buhl.
Funding is expected from numerous sources beyond just the producers who own hogs, including contract finishers, employees, allied industry, consultants and others.
CEO Dierks summarizes NPPC's functions as twofold:
Defend all producers' freedom to operate. “That's the holy grail,” he assures. “When we do something from an NPPC staff perspective, it's oriented at defending or enhancing a producer's ability and freedom to operate.
“The organization depends on producers setting the direction of NPPC,” Dierks adds. “This is the human side of the interface. It also provides producers with a contact point, a forum for producers, a place for the industry to come together and discuss issues and concerns.”
“Our Washington (DC) office does the advocacy work. We lobby, which means we deal with the representative side of government; we influence regulation and interface with the White House and the administrative side of government; and, we deal with legal issues, which gets you into the third body of government.
“That's basically what people are investing in — what we provide as an organization,” explains Buhl. “If producers are interested in addressing the issues that affect them, they need to participate in producer consent.”