Report Checkoff Collections

By law, all producers selling cattle or calves, for any reason and regardless of age or sex, must pay $1 per head to support beef/veal promotion, research and information through the Beef Promotion and Research Act. The buyer is generally responsible for collecting $1 per head from the seller, but both are responsible for seeing that the dollar is collected and paid. In addition, the checkoff also is collected at the same rate on every live beef animal imported and at the equivalent rate of $1-per-head on all beef products that are imported [import assessments were about $6.8 million in 2009.].

Is anyone exempt from paying the dollar?

No producer is exempt from the checkoff, according to the Act. Buyers who resell cattle no more than 10 days from the date of purchase may file a non-producer status form and avoid paying an additional dollar. They are, however, responsible for remitting collected funds and reporting any transaction to the qualified state beef council. [More recently, producers of 100 USDA percent certified organic products were exempted from most commodity checkoffs in separate legislation.]

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

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 back 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, plus unremitted checkoff dollars and interest.

What is my checkoff investment used for?

Checkoff investments are focused around four main priorities:

• Domestic Marketing
• International Marketing
• Food Safety
• Producer Communication/ Industry Information

How do I know I’m getting a good return on my $1 checkoff investment? I don’t see a correlation between retail beef prices and what I sell my calves for.

Measuring the return on investment of a checkoff program is always difficult. A study was done by Dr. Ron Ward of University of Florida [Gainesville] in 2009 showed that for every dollar invested in the beef checkoff, the industry had a return of $5.55.