To our fellow cattlemen: The beef industry has lost a tremendous amount of equity and now more than ever needs to focus on solutions to restore profitability. Attacking the integrity and character of National Cattlemen's Beef Association is not going to put dollars in producers' pockets. NCBA's purpose is to improve the potential for producer profitability and viability, plain and simple. That is our focus and will continue to be.
There are competing visions for the industry. The debate should not be about integrity or character. These traits exist in all industry organizations. The debate is about the vision and philosophy on the direction of the industry and the approach to achieve that vision. NCBA's vision calls for freedom of choice on how to market our products and operate our businesses, limited government intervention, free but fair trade, and a focus on the consumers of our product.
Another vision calls for government intervention and restrictions on how cattlemen can market their cattle. Government intervention has never resulted in putting dollars back into our pockets. It didn't work during the early '70s when President Nixon froze prices or in the '80's during the dairy buyout program. In fact, it cost us money, a lot of money.
NCBA's policy calls for an investigation of the market system. We have asked for a congressional study and also call for a full review of the Packers and Stockyards Administration. We have laws in place; we need them to work when there is a problem.
We continue to explore marketing opportunities for our producers. The Price Discovery Think Tank is pushing forward on developing new pricing models, improving price reporting from packers and retailers, and working with Chicago Mercantile Exchange to provide appropriate risk management tools. These are complex, difficult issues that will not be solved by a snap of the fingers or a quick legislative "fix" that could haunt the industry for years.
Secondly, some believe profitability can be restored through a protectionist trade policy. Cattlemen have been free trade advocates for more than a century. We have traded with Mexican cattlemen since the late 1800s. In 2001, the trade surplus for beef was almost $600 million, exceeding the total annual cattle sales for North Dakota.
We were successful in getting Trade Promotion Authority for the president and yes we opposed the Dayton/Craig amendment. TPA gives the president authority to negotiate a strong trade policy. The Dayton/Craig amendment gave Congress a "line-item" veto on treaties. Let us ask you, if Congress is unwilling to give the president "line-item" veto power on laws passed by Congress, why should the executive branch of government be restricted in negotiating treaties? The Senate clearly has the power to veto any treaty.
Free trade cannot work successfully unless there is a level playing field. NCBA supports fair trade. In our testimony on the Free Trade of the Americas, we have sent a clear message to the president that it must be economically positive for our producers or we cannot and will not support it.
Our policy also calls for elimination of subsidies and reductions of tariffs in other countries. We absolutely support a "no access without access" trade policy and we adamantly oppose any increase in quotas for countries desiring to export beef to the United States until the playing field is leveled in countries that import our product. Ninety-six percent of the world's population lives outside the United States. These countries provide a great market for our product.
Our critics continue to accuse NCBA of being packer-controlled. NCBA was created to implement the industry vision and be industry inclusive. However, NCBA is a producer-run organization. On the Policy Division Board of Directors, there are 83 cow/calf producers, 38 feeder/stocker producers, three dairy/veal producers, two packers/processors, seven allied industry representatives, and one auction market owner. Packers make up 1 percent of the board. Obviously, the packers have input into the process but do not control the development of policy at NCBA. There are enough cow/calf producers on the board of directors to develop any policy and pass it by a super majority. Additionally, the by-laws and investment structure preclude control of the board of directors by anybody other than those appointed by state cattlemen's associations.
Finally, these same critics have accused NCBA and Cattlemen's Beef Board of being one organization and that NCBA misuses beef checkoff funds. NCBA and CBB are two distinctly separate organizations with two very different purposes. CBB was created to contract, administer, and oversee the beef checkoff program. USDA appoints the directors to the Cattlemen's Beef Board and oversees its activities, including approval of all funding requests and compliance of contractors to the act and order.
NCBA is a contractor to the beef checkoff program and implements programs on behalf of the Cattlemen's Beef Board and the Federation of State Beef Councils. These programs are implemented in compliance with the law and are audited annually to ensure compliance. NCBA's audit committee is made up of cattlemen who hire the auditor and annually review NCBA's financial reports and internal controls. NCBA has not, does not, cannot and more importantly will not use checkoff dollars for any purpose other than those for which the checkoff program was intended.
As your officers, we feel it is important to communicate with you about key issues facing our industry and about misrepresentations that are being made about your organization. We, too, are cattlemen just like you who are suffering from the economic stress that exists in our industry. This industry is our livelihood as it is yours. And we, like you, desire to pass our family operations on to our children.
Over the next few months, we are holding a series of town hall meetings in the country to listen to and understand your needs. We hope you will come. We also want you to call or write us if you have a concern. We will respond. This is your organization and we intend to represent you and implement the policy you have developed.
We call on all industry organizations to work together to increase profitability and viability for all beef producers. We will lead the way.
Wythe Willey is NCBA president; Eric Davis is NCBA president-elect; Jan Lyons is NCBA vice president; and Terry Stokes is CEO. For more information, call (319) 365-5111, (208) 845-2762, (785) 537-7226 or (303) 850-3310.