The winds of change are blowing through the pork industry and the gales seem to be picking up a bit. I've sensed it more at pork producer meetings and trade shows recently.
In 2002, pork producers seem to have recovered, regrouped and recommitted. Tempered by the events of recent years, the survivors have raised both the production bar and the business management bar.
This is not totally new territory for us. There have been periods or phases that have left an indelible mark.
We saw it in the '40s and '50s when the first national pork organization was formed, controversial crossbreeding experiments began and performance-testing methods were developed that led to more meat-type hogs.
In the '60s, the National Pork Producers Council was formed; a nickel per pig was voluntarily deposited into a master fund.
In the '70s, the U.S. was declared free of hog cholera, artificial insemination techniques were refined.
In the mid-'80s, a legislative pork checkoff was incorporated into the farm bill; “Pork — the Other White Meat” campaign was launched.
A major shift toward integrated pork production systems occurred in the '90s. Pork quality programs and environmental initiatives became focal points. And, the worst hog market crash in history sent the industry reeling. At the close of the century, the pork checkoff became a divisive issue and opposing camps squared off. A tumultuous stretch of negotiations and legal actions ensued.
Thankfully, a settlement agreement was reached that allowed the mandatory checkoff to continue. The agreement included the caveat that the National Pork Producers Council and the National Pork Board must function as distinctly separate entities.
That has drawn us into a new round of soul-searching and hard questions about industry governance and structure. Again, the pork industry's mettle is being tested. This is one of these critical phases that will set the tone for another decade or more.
Much of the discussion revolves around reallocation of checkoff funds. Some feel the issues facing the pork industry have changed so markedly since the legislative checkoff was written into the 1985 Farm Bill that it's time to consider reallocation of those funds.
New Century Challenges
Certainly, the new century pork industry finds itself face-to-face — and sometimes toe-to-toe — with animal welfare activists and passionate environmentalists such as Robert Kennedy Jr.'s Waterkeepers Alliance.
Of course, the Pork Act governing the mandatory checkoff prohibits the use of those funds in addressing public policy and regulatory issues.
Producers in some states have drafted resolutions that would lower the mandatory checkoff rate, then through “implied consent” to the packer, allow another deduction to be pooled in an unrestricted war chest used for lobbying, public policy issues and precendent-setting legal wrangling.
One state resolution suggests lowering the mandatory checkoff to 35¢, allowing another 10¢ to be deducted through implied consent. Another suggests a 30¢ mandatory/15¢ unrestricted checkoff split. Still another suggests an equal split — 22½¢ mandatory/22½¢ implied consent and unrestricted.
I've being mulling over these proposals since I first got wind of them. Truthfully, I've vacillated from thinking it's a very good idea to thinking it could be a really bad idea. Today, I'm sitting on the fence.
Impact of Reallocation
A 10¢ reduction would lower the funds available to the National Pork Board for pork promotion, consumer education and research by 22%. You have to ask yourself: “What 22% of the Pork Board-funded programs are non-essential?”
Or, on scale of priorities, is the bottom one-fourth of checkoff-funded programs less important than the top regulatory and policy issues?
Still, if non-checkoff, unrestricted funds are not available, who will fight the policy and regulatory battles?
Some proponents of reallocation ask: “Where would the mandatory checkoff be if the NPPC had not used non-checkoff funds to defended it?”
Then, too, will big contributors leverage their non-checkoff contributions?
These and more important questions must be asked and answered. The pros and cons of each scenario must be studied closely. It is imperative that your delegates to the annual meeting know where you stand so they can represent your wishes.
Perhaps President Bush said it best in his State of the Union address when he appealed to party loyalists. “We must set aside posturing and focus on results,” he said. Good advice that applies here, too. Mr. Bush also observed: “…after America was attacked, it was as if our entire country looked in the mirror and saw our better selves.”
It is my hope that pork producers will continue to express their “better selves” as these decisions are made. Historically, they always have. I don't expect that to change.