© Leesa Zalesky for The Sortin’ Pen Blog, February 3, 2020
Glossary of Terms for this article:
ICMISC: Industry Wide Cooperative Meat Identification Standards Committee. ICMISC is a nationwide group of retailers, packers, industry partners, government agencies and trade associations. In 1973, ICMISC established URMIS.
URMIS: Uniform Retail Meat Identity Standards. URMIS is a program developed in 1973 to standardize fresh meat cuts and their names related to barcode labeling development.
Authorization Requests: Commonly called ARs, these are the documents by which a potential beef checkoff contractor applies for checkoff funding for projects surrounding promotion, research and education of and about beef.
CBB: Cattlemen’s Beef Board, a national board providing administrative support and oversight of the national mandatory beef checkoff.
USDA-AMS: Department of Agriculture’s (USDA) Agriculture Marketing Service (AMS). This is the federal agency responsible for federal oversight of the beef checkoff’s compliance with the Beef Act and Order.
BPOC: Beef Promotion Operating Committee. The BPOC is specifically defined in the Beef Act as the body responsible for developing the beef checkoff’s annual budget, which is then approved by the full CBB and USDA, for developing programs in the areas of promotion, research, consumer information, industry information, foreign marketing and producer communications. The BPOC is comprised of 20 members: ten producers elected by the CBB and ten producers elected by NCBA’s Federation Division. The Beef Act and Order currently require the BPOC to contract with national, non-profit, industry-governed organizations to implement Beef Checkoff Programs.
NCBA: National Cattlemen’s Beef Association, which is comprised of two divisions: a policy division and a checkoff division called the Federation of State Beef Councils. NCBA is the majority contractor every year for beef checkoff funds.
In May 2013, Leo McDonnell, a rancher from Columbus, MT and a member of the Cattlemen’s Beef Board (CBB) representing his state, filed a formal complaint with the Department of Agriculture’s Ag Marketing Service (USDA-AMS) over the beef checkoff’s role in and collaboration with the pork checkoff to develop and roll-out new standardized meat cut names.
A month earlier, the Beef Checkoff Program, represented by NCBA, and the National Pork Board had jointly unveiled a new plan to rename cuts of pork with traditional names attached to beef cuts. The plan, approved by ICMISC and USDA’s Ag Marketing Service and funded in part with the buck-a-head beef checkoff, handed over names like ribeye, T-bone, porterhouse, New York and brisket to pork.
Imagine McDonnell’s surprise when, himself a CBB member, the years-long project went public and he had no idea it had been unfolding. He started digging for more information, scrutinizing ARs covering the project, and could find no reference to a partnership between the beef checkoff and pork checkoff, nor could he unearth any information that would’ve described how meat cut names would be applied across species as a result of the project. “In multiple phone calls with past members of the BPOC not one could recall any disclosure by the contractor (NCBA) or by CBB staff of the true extent of this effort,” he said.
“Like most ranchers I understand the historic use and value of beef cut names. The reputation behind names like ribeye, porterhouse and T-bone was built by beef and beef alone,” McDonnell noted. “There’s great equity and value in that reputation. This value was immediately diluted and those historic names were turned into something generic that could be applied to pork. This project just further commoditized beef and put beef’s market share at risk. That’s not consistent with the mission of the beef checkoff. I believed, and still do, that it was my fiduciary duty as a CBB member to file a complaint with USDA, particularly when there was, in my opinion, an inappropriate use of beef checkoff funds and resources.”
NCBA, representing the beef checkoff, and the National Pork Board argued that the renaming project was an effort to update nomenclature used on beef and pork in order to standardize meat cut names for consumers and to reduce consumer confusion at the meat case. They claimed the name give-away was supported by “extensive consumer research identifying an opportunity for retailers to build consumer confidence in how to shop and prepare beef and pork. Jim Henger, a senior executive at NCBA at the time said, “We are pleased to have industry support to introduce new, simplified fresh meat names that will help consumers better understand the beef and pork cuts they see every day in the meat case.” By the time the two groups went public in April 2013 with their announcement the deal was done, having received unanimous approval from ICMISC and had been green lighted for implementation by USDA-AMS. All of this had taken a lot of time. (Some reports show that the project dated back to 2010 or earlier.)
On June 19, McDonnell received a response to his complaint from USDA’s Craig Morris, who at the time was serving as Deputy Administrator, USDA’s Livestock, Poultry and Seed Program. Morris said his agency had undertaken a review of the ARs surrounding the project and it had concluded that the work was appropriate under the Beef Act and Order. But, Morris added, officials agreed that the funding requests could have been written more clearly to reflect the partnership with a competing protein whose objective was not to increase demand and develop new uses for beef.
(In October 2017, USDA’s Morris was named by the Pork Board to head its International Marketing division.)
“Accordingly, we have directed the CBB to implement a new requirement for contractors to include clear-cut language in ARs when such partnerships or collaborations will occur, along with the nature of the partnering organization(s). Specifically, we have directed the CBB to implement new safeguards with any contractors submitting authorization requests to the BPOC. We have also initiated a review of National Pork Board promotions about the new cuts, which include radio spots and print materials, and are looking into our approvals for those pieces. We will follow up with CBB staff on the outcomes of that review,” wrote Morris.
Sadly, the horse was already out of the barn. The pork industry’s web site had already been revamped, featuring “The Power of a Name,” where the pork industry touted its adoption of cut names traditionally used by beef, expounding on the consumer trust and familiarity associated with those names. “So there’s nothing run-of-the-mill about the pork chop’s new name,” said the Pork Board’s VP of of Marketing. “It’s evocative of a fancy steakhouse. And pork producers and retailers hope the changes will help drive up sales.” The site suggested to retailers that consumers could now be charged more for pork cuts because of the new names historically used on beef.
“Approval for these cut name changes was unanimous by the Industry Wide Cooperative Meat Identification Standards Committee, which the contractor (NCBA) is a member of and obviously voted to support,” said McDonnell. “The contractor was representing the beef checkoff and the industry as a whole when it did so and without providing full disclosure to the CBB as the project moved forward. Hopefully, we have ensured that nothing like this will ever happen again.”
But the story doesn’t end there.
Two months later, in August 2013, fourteen CBB members, including McDonnell, presented a resolution to the full CBB on the meat cut name change disaster during the CBB’s business session in Denver during the joint CBB and NCBA cattle industry summer conference.
The resolution read in part, “Such actions diminish the identity and subsequent competitiveness of beef…CBB members and CBB appointees to the Beef Promotion Operating Committee were never made aware that beef checkoff funds, research, projects, etc., through authorization requisitions, would be used by the contractor (NCBA) to develop common names with pork…the contractor’s staff, in response to a CBB member’s concern regarding pork using historical beef cut names stated ‘the beef checkoff could not have completed a project as big as this – with all the research components, web developments and industry expertise – without splitting expenses with the pork board’ and that ‘beef checkoff funds were used in partnership to contract Midan Marketing to assist the two checkoffs’ several meetings to receive USDA approval for the name changes and also in getting ICMISC approval’ for the changes.”
The resolution called for beef checkoff funds “to be restricted from engaging in any project or program that would, in any way, assist competing meats or species in using or promoting the use of traditional beef cut names for their use and that CBB authorization requests from contractors must clearly disclose the objectives and goals for checkoff funded projects and, in the event of any such third party actions, CBB contractors must notify the CBB of such activities and potential outcomes and cease from being involved with such activities.”
It seemed like a reasonable, easy-to-support resolution that would provide more transparency for CBB members in the future when reviewing and approving budgets submitted by the BPOC but it wasn’t that easy. The resolution stirred debate among CBB members and the whole cut name give-away debacle was certainly the hot topic in the hallways, social hours and many committee meetings throughout the summer conference that year. A separate committee was established to review the language in the resolution and adjust it slightly in order to address some CBB members’ concerns about how the changes might affect ongoing checkoff-funded projects and programs conducted through the Meat Export Federation. Dean Black, a CBB member from Iowa, was named chairman of the committee.
The committee came up with two recommendations, which were approved: The first was language to be added to contracts between the BPOC and contractors for beef checkoff funded projects: “If contractors, during the course of the execution of the contract, see any potential for harm to beef demand, or loss of beef market share, such potential shall be disclosed to the BPOC immediately.” The second recommendation was for language to be added to USDA’s Requirement Guidelines for contracts between the BPOC and all contractors regarding partnership disclosures: “It is agreed by the contractor that all partnerships with organizations involving checkoff funds will be disclosed to the committee prior to execution of programming involving such partnerships.”
McDonnell says the CBB was told it could only make recommendations and not offer directives to the BPOC. Given that scenario, it’s a little difficult to see how the CBB exercises complete oversight of the beef checkoff. The Beef Act stipulates that the Beef Promotion Operating Committee (BPOC) shall “develop plans or projects of promotion and advertising, research, consumer information, and industry information, which shall be paid for with assessments collected by the CBB. The BPOC shall be responsible for developing and submitting to the CBB, for its approval, budgets on a fiscal year basis…the CBB shall approve or disapprove such budgets and, if approved, shall submit such budget to the Secretary of Agriculture for the Secretary’s approval.” So, where does the buck stop when the BPOC sends a project up the budget pipeline to the CBB for approval or disapproval? On one hand, if the CBB doesn’t receive the information it should, as happened in this name give-away scheme, it can’t disapprove a budget submitted by the BPOC. On the other hand, is the CBB just a rubber stamp with no questions asked for whatever the BPOC sends along for approval? Was CBB staff aware of what was happening and stayed silent? Exactly where does the buck stop?
And THAT, dear readers, is how a pork chop became a porterhouse.