The Agriculture Department proposed July 19 to lower the pork checkoff rate from 0.45% to 0.40% of the market value of a hog, as recommended by the National Pork Producers Council (Pork Act) Delegate Body in March.
Following a 30-day comment period, USDA is expected to publish a final rule and enact the change sometime this fall.
That change, estimated to decrease funds by $5-6 million/year, reflects an 11.1% reduction in the annual checkoff revenue on average, explains Mike Simpson, executive vice president of the National Pork Board. The Pork Board collects about $50 million annually in checkoff revenues, on average.
Originally, total program expenditures for fiscal year 2002 were $45.8 million. Recent revisions have lowered anticipated spending to $42.5 million, he says.
For fiscal year 2003, with the reduction in the checkoff rate, revenues are projected at $42 million, and expenditures are being targeted downward to $39.2 million. About 20% of checkoff revenues are returned to the states, reminds Simpson.
Checkoff spending for 2002 and 2003 includes the infusion of about $5 million from reserve funds each year.
USDA is also proposing to reduce the assessment rate on imported pork and pork products to reflect the 0.05% reduction in the assessment rate and an adjustment for average U.S. market hog prices. That is expected to reduce importer checkoff assessments by about $290,000.
All assessments, authorized by the Pork Promotion, Research and Consumer Information Act of 1985, are used to fund research, education and promotional activities aimed at strengthening the demand for pork.