Contact: Diane Henderson                 303-850-3465             dhenderson@beef.org

CBB COMMITTEE RECOMMENDS REDUCING RESERVE, ADMIN BUDGETS

Combined result would add $2.18 million to pot for Fiscal 2006 programs

(DENVER)  July 28, 2005 – The Executive Committee of the Cattlemen’s Beef Board will recommend that the full Board reduce the national checkoff program’s reserve and administrative budgets for the coming year and correspondingly increase its funding for promotion, research and information program budgets.

The recommendations made during the committee’s meeting Wednesday will go to the full Beef Board for a vote on Saturday, as part of this week’s 2005 Cattle Industry Summer Convention in Denver.

One recommendation calls for decreasing from $5 million to $3 million the reserve that the Beef Board generally maintains.

“With the Supreme Court decision in May confirming the constitutionality of the checkoff and the fact that we have rarely, if ever, had to access those reserve funds, the majority of the committee members were ready to take the chance in reducing the size of the reserve,” said Executive Committee Chairman Jay O’Brien, a cattlemen from Texas and vice chairman of the Beef Board. “We believe this would allow us to put the greatest amount of checkoff dollars possible into programs aimed at building demand for beef – the core function of the checkoff program.”

The other recommendation from the Executive Committee suggests reducing the CBB administrative budget by $185,000 to $2.065 million in the coming fiscal year. The Beef Promotion and Research Act limits administrative expenses for the board to not more than 5 percent of projected revenues in a given year, a limit that the Board has always fallen well below. Estimates for expenses in the coming year allow the Board to trim that budget a bit more.

“We would really like to tighten up wherever we can so that we can dedicate producers’ dollars to promotion, research and information programs,” said Beef Board Chairman Al Svajgr, a cattleman from Nebraska. “We don’t want to leave a lot of money in the pot at the end of the year, and both history and projections suggest that this reduction will be workable.”

In other activity during its meeting today, the CBB Executive Committee heard reports about state beef council marketing plans, checkoff collections compliance, and litigation, and approved brand or trade name references in three national checkoff-funded beef-promotion programs and in two state programs, in Washington and Wisconsin.

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The Beef Checkoff Program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.

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