Beef Checkoff

Understanding the Beef Checkoff
A Dollar or a Document

All selling and purchasing transactions must be reported to NBC. In each instance, either $1 per head must be paid or a Non-Producer Status exemption form must be collected by the buyer from the seller. If you opt to claim an exemption, you swear that:

1) your share in the proceeds is only a sales
commission or service fee OR you acquired
ownership of the cattle to facilitate the
transfer of ownership to a third party AND

2) you owned the cattle less than 10 days AND

a) upon your purchase the checkoff was
collected or you received a
Certification of Non-Producer
Status from the seller OR

b) you purchased the cattle in a
transaction where you were not
responsible for collection of the
checkoff (ex: Auction Market or
Brand Inspector).


DETERMINATION OF TRANSFER OF OWNERSHIP

The major criteria for determining when assets (cattle, beef, or beef products) are transferred from one legal entity to another, is the transfer of risk of loss between the parties. The point at which risk of loss passes from one legal entity to another signifies that ownership has transferred for determining whether or not the checkoff is due.


CATTLE AS PAYMENT FOR SERVICES

The checkoff should be collected and remitted when cattle are used as payment for services. This type of transaction should be treated as a private treaty sale.

Example: Rancher “A” hires manager Smith to run 100 head of cattle. At years end manager Smith keeps 5 heifers for his work. Five dollars in checkoff assessments should be collected from rancher “A” and remitted to the state beef council. Just as in a private treaty sale, both manager Smith and rancher “A” are liable until the checkoff is remitted.


SHARED OWNERSHIP

When ownership of cattle is shared, each owner must pay his pro rata share of the checkoff when shared cattle are sold.

The important issue is not the mechanics of the transaction, but that the entire checkoff is collected.


TRANSFER OF OWNERSHIP AS A GIFT OR FOR SERVICES RENDERED

An assessment is due on each trans-
fer of ownership of cattle even if no money has changed hands between parties. For example, when cattle are used as payment for services rendered or when cattle are given as a gift or donation the producer shall remit the checkoff. The transaction will be treated as a private treaty sale. If cattle are purchased and transferred as a gift within 10 days, then the rules governing Non-Producer Status apply.


My ranch is in Nebraska, but I feed my cattle in Kansas...

The rule is that if cattle are located in one state for 30 days prior to their sale, the checkoff dollars stay in that state. If it is less than 30 days, then the dollars go to the state of origin.


How do I know that everyone is contributing?

NBC is charged by law to monitor all cattle transactions and assure uniform payment of the checkoff assessment. NBC also is required to turn over to the Beef Board the names of any producers or collecting points that refuse to pay the checkoff for action that can include a restraining order and a civil penalty of up to $5,500 per transaction.

What is my checkoff investment used for?

Checkoff investments are focused around four main priorities:
•Domestic Marketing
 -Convenient New Products
 -Consumer Awareness
•International Marketing
•Food Safety
•Producer Communication/Industry
Information


What can our checkoff do?

Our checkoff is the only industry-
wide, marketing tool we have to fight for the success of the industry. Our checkoff doesn’t own cattle, packing plants or retail outlets. It can’t single-handedly turn around a bad market. The intention of the checkoff is to stimulate others to sell more beef and stimulate consumers to buy more beef. This can be done through initiatives such as advertising, public relations efforts, education programs and new product development.

What can’t our checkoff do?

By law, our checkoff funds cannot
be used to influence government policy or action, including lobbying.

Where can I get more information on the beef checkoff?

Contact NBC at 1-800-421-5326.
NBC has a number of information pieces illustrating how checkoff dollars are invested.