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What the heck is a checkoff?

And now, that agriculture post I was working on the other day before the Chipotle pork shortage.

But first, a housekeeping note...I'm considering moving my "ag geek" posts to a completely different space. It seems more logical to chronicle our farm search, sheep topics, and eventual daily operation in one place. Then again, 2 blogs is more work for both me and the reader to find. I'm conflicted. Nobody has exactly complained. But it's clear from my pageviews that some topics interest you more than others. My blog so I can do what I want with it...I've just been thinking. What do I want our eventual farm website to look like? Considering that transparency will be high on the list of marketing techniques used to set us apart, perhaps I need to consider it a bit more. Perhaps there I'd rather focus on "our process" more than covering hot topics in the business? Just thinking aloud.

Today's topic is checkoffs. No, not the Russian from Star Trek. That's "Chekov." And not the writer. That's "Chekhov." I'm talking about commodity checkoffs. Which I'm pretty sure 99% of my readers have no clue about. I sure didn't. But in doing some research about sheep slaughter (you know, stuff yours truly does in his spare time), I stumbled across interesting conversations as a side journey. What a weird journey it is.

You probably actually know about checkoffs already in their end form. Partly, that's research about a given product--beef, pork, cotton, milk. But the other result of checkoff money is advertising. You know checkoffs as "Beef: It's What's For Dinner," "Got Milk?" and "Pork: The Other White Meat."

Here's how it works in theory...Congress has allowed the national trade organizations to collect mandatory funds each time that product is sent forward in the supply chain. For lamb, for instance, it's something like $.005 per pound so that when you sell the animal you pay your checkoff forward until it reaches the end processor where the amount is sent to the national commodity board as a monthly payment. There's one for wool, Christmas trees, eggs, watermelon, peanuts, etc..

But that's where it gets complicated.

There's a question of constitutionality. Some allow a refund or opt-out. There are problems with the system being set up for the traditional sell-off at market by large producers. It's harder to make work with the rise of small producers who direct market. Which, in turn, creates tension between conventional producers wanting research and ad dollars to support them versus, say, small organic producers wanting advertising and research money to support their causes. New rules, in fact, are allowing organic producers up to a certain amount have their own checkoff system. Not sure how I feel about that.

And it left one shepherd whose blog I read wondering how it even applied to him when he didn't know about it and owed, literally, 65 cents for one month. Does the Lamb Board really want his 65 cents? In his case, they let him submit yearly by crossing out lines on the form.

Yesterday, I attended a legal seminar on creating proper farmland leases which was very helpful. One of the topics we discussed (that I could do a whole post on and maybe will) was how hard it is to quantify rent and improvements for the new generation of old-fashioned diverse farms. When so much of American farming is dominated by row after row of corn and soybeans, the lookup price for an acre of land isn't as useful. If you're going to certify organic, improve soil health, conserve water, and run a mixed vegetable operation it's tougher to put a value on. Luckily, many landowners are interested in the value of conservation. This comes back to commodity checkoffs, however, in that allegiance to a national organization for a particular crop may be less relevant than it once was.

Take lamb, for instance. There's been a steep, ongoing decline in the old style of US lamb consumption where large flocks are taken to a stockyard, slaughtered, and sold in US mainstream groceries.  That doesn't show any sign of improving or coming back. But there has been growth in a couple of lamb and goat areas...mainly, ethnic markets. Kosher and halal butchering for immigrant and religious populations. And direct-to-consumer marketing of value-added (that's farm speak for fancy) lamb that is humane, pasture-raised, organic, gently played classical music, whatever. The same holds true for another area of interest for us which is direct sales to the hand spinning market. If any of you are knitters, you know how much of a demand for locally raised wool from good wool breeds there is. Traditional demand for commodity wool from conventional mills? Not so much. Australia can flood our economy with cheap Merino. For someone looking to get into the lamb and wool business, I'm going after Muslims who want to eat my lamb and people who want rare, high-quality fleece. So why would I want the old sheep research and advertising?

In the past, checkoffs have been generic. They're not focused on what makes one cut of meat better than another or one variety better than another. They're focused on promoting the commodity as a whole. Get Americans to wear more cotton, drink more milk, and eat more beef. But in an economy where Americans are trying to move towards specific goals with the food system, those differences are the edge that our farmers need. Especially in light of the local movement, Midwest egg producers would probably like to know what makes Midwest eggs better than eggs from California. And California now has a law about hen living conditions that is driving up the cost of eggs as farmers reduce flock size. Everything in our economy is going segmented so that, to me, commodity checkoffs make less sense.

As we talked about in the seminar yesterday, the lucky thing is we're different and writing the new rules. Others who come after us will benefit from our trailblazing. My gut is that the changes currently going on in the agricultural system we will eventually do away with the checkoff or become more tailored to the unique needs of regional or specialty farm coalitions. For now, I'd pay my 65 cents per month dutifully. While rolling my eyes that the American Lamb Board is anything more than a leftover from the old days. I suppose I could write it off as a cute antique. But it's a tedious extra step farmers and farmers need less red tape.

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