Three hog farmers explain why they are voting "NO" to end the mandatory pork checkoff tax

Rhonda Perry
Harold Beach
Gary Malone

Rhonda Perry:

This election year, there may not be a more contested vote than next week’s referendum on the mandatory pork checkoff tax. The pork checkoff is a tax paid on all hogs sold in this country, and the money ultimately ends up in the hands of the National Pork Producers Council (NPPC) and its state pork associations. This is the first time hog farmers have had the chance to vote on whether to continue or end the checkoff since it began in 1986.

The NPPC calls the checkoff a “phenomenal success,” but for family farmers the checkoff has been an economic disaster. It is an unfair tax that has been used to further the interests of the largest corporations and meat packers at the expense of independent hog farmers.

Hog farmers have been forced to pay more than $500 million into the checkoff program since 1986. Here’s what NPPC’s “phenomenal success” has done for hog farmers:

70% of hog farmers have gone out of business (over 250,000 hog farmers), while only 30% went out of business the 12 years prior to the checkoff.
Hog prices hit historic lows (8¢ in 1998 - 1999), worse than the depression of the 30’s.
Hog farmers share of the retail dollar plummeted from 46¢ to less than 20¢, while packers were declaring record profits.
The National Pork Producers Council (NPPC) has added a packer representative to its board of directors - with the power to vote.
Since the checkoff began, producer prices have gone from $50 to $40. If you adjust today’s hog prices for inflation, we are being paid 40% less than we got paid in 1986 when the checkoff became mandatory.

And that’s not all. NPPC has repeatedly thrown its weight and our checkoff dollars behind the corporate takeover of the hog industry.

In 1995, NPPC invited 25 of the largest corporate hog producers (Smithfield, Murphy’s, Premium Standard Farms, etc.) to Washington, DC to develop joint legislative and media strategies for the hog industry.
In 1996 and 1997, NPPC spent nearly $12 million in checkoff dollars to fund projects designed to promote vertical integration in the hog industry, and $6 million to find solutions to odor problems caused by corporate hog factories.
In October 1998, just before hog prices dropped to 8¢, NPPC’s executive director Al Tank told producers to “expand and seize the market share.” Tank was talking to the corporate producers, not me and my neighbors.
This spring at the Pork Forum in Kansas City, NPPC passed a resolution supporting packer ownership of livestock even though more than 85% of independent family farmers are opposed to packer ownership.

Hog farming is a business. Continuing to pay money into a program that does not give us a return on our investment is like throwing money down a rat hole. In any other sector of the economy this would be called “being a bad manager,” but in this industry it’s called the mandatory pork checkoff tax. With this dismal record, any other business would have made a change, and now is the time for us to make that change. We need a program that is accountable to independent producers. The first step is to end this obsolete program by voting “NO” on September 19-21.

Rhonda Perry, Armstrong, Missouri

Rhonda Perry is a livestock and grain farmer from Armstrong, Missouri. She is also the Program Director of the Missouri Rural Crisis Center and a spokesperson for the Campaign for Family Farms, a national coalition of farm groups who is organizing the campaign to end the mandatory pork checkoff.

Harold Beach

The controversy over the pork checkoff vote in recent months shows just another example of how out of touch leadership has become to membership. While Rome burns, Nero fiddles.

Years ago, when the pork checkoff was voluntary, I supported it faithfully. When it was voted on fifteen years ago to become mandatory, I supported that also. I’ll never do that again. Any future checkoff program that I support must be accountable to producers, and producers must be able to decide whether or not to keep paying into it.

We, as producers, are paying the checkoff and we should be getting the benefit. Our share of the consumer pork dollar has dropped from over $.45 to less than $.25 in the last few years. If you look at the profit statements of packers and retailers, it’s easy to see where the money went. Take away all the smoke and mirrors and other rhetoric by the pork leadership of how much good the checkoff has done, and the bottom line is: we producers are paying the full bill of promotion and getting none of the benefit.

The National Pork Producers Council (NPPC) and Missouri Pork Producers Association (MPPA) have been active supporters of integration (packer ownership of hogs) in the pork industry. When packers own hogs, they don’t need to buy others on the open market. Thus, independents go out of business, not because they’re inefficient, but simply because they can’t sell their animals for a fair price. There is no price discovery anymore.

If the leadership of the NPPC and MPPA are doing such a good job, why are they afraid of a vote on the checkoff? This “coalition of opponents” that the NPPC leadership keeps referring to is made up of hog farmers. We’re the ones they claim to represent. We worked for two years gathering signatures on a petition to bring the checkoff to a re-vote. More than 1,000 producers from Missouri signed the petition.

At every step of the way we encountered resistance from the NPPC and MPPA. They have become such an entrenched bureaucracy that maybe it’s time for them to go. The way for that to happen is to shut of the money. Maybe we’re cutting off our nose to spite our face, but if the pork leadership, with the help of the checkoff money does us any more good then the independent producers are going to be broke and out of business. Then the hostile take-over of the pork industry by Seaboard, Premium Standard Farms, Cargill, and Smithfield Foods will be complete.

We believe in the idea of family based, independent agriculture. The consumer benefits most from this system. The pork leadership believes in supply chains, seamless system, vertical coordination, and other code words for indentured servanthood. We will not be janitors for someone else’s pigs.

Sincerely,
Harold Beach, Leonard, Missouri

Gary Malone:

All you need to do is pick up any farm magazine, and you’ll see that the hot issue before us is the mandatory checkoffs. One producer goes door-to-door to try and convince his neighbors to retain the pork checkoff, another quotes a study claiming that we are getting a return of dollars on the pennies we spend.

I would like to point out a couple of fallacies with their arguments. First, these so-called studies are only speculation. There is no control group to prove or disprove the study. Second, the pork and beef board commissioned the study. Do you really think the hired researchers would come back and tell their bosses that the money they spent is just wasted on ink and nothing is gained? Here at home, my dog does not bite the hand that feeds him.

The bottom line is, has the checkoff put money into my pocket? We have given them plenty of time to work, and they have failed. We have given the wheat checkoff over 60 years to work, and we are now getting a lower price for wheat than we did when the checkoff started. At that time our tractors cost less than $1000. Now we’re selling wheat for half of what we did then and our tractors cost over $100,000. Two years ago I sold hogs for $8 per hundred. I sold yearlings for $58 per hundred. Somebody is making a profit, but the producer isn’t getting any trickle down from it.

The CEO’s might be making thousands of dollars from the checkoffs, but the producer receives nothing except an extra cost of production. When we put into place a deduction from our paycheck that we can no longer say no to, we have taken away our Constitutional rights to private property. We have violated the Bible (1st Timothy 5:18) which says the husbandman that laboreth must be the first partaker of the fruits of his labor. The checkoff takes the fruits of our labor first.

The entire checkoff problem could be taken care of if producers had the right to just say no. Then and only then will we have control of our money. I hope that every producer will consider what the checkoffs have done for them. Give it lots of thought and then vote your mind. I have studied the issue at great length, and I will vote “no” to end the mandatory pork checkoff tax. I will vote against any checkoff that is mandatory and unaccountable to the producers that pay it.

Respectfully,

Gary Malone,
M-Bar Ranch, Palisade, Nebraska