The Beef Checkoff and Direct Beef Sales

An important issue for direct beef sales businesses to consider is the payment of the Beef Checkoff assessment.

The national Beef Checkoff program was established through the Beef Promotion and Research Act as part of the 1985 Farm Bill. The Beef Checkoff aims to build demand for beef and beef products, both domestically and internationally, through initiatives such as consumer advertising, marketing partnerships, public relations, education, research, and new product development.

In 2014, Texas cattle producers voted to pass a state Beef Checkoff that works specifically for in-state promotion, marketing, research, and education programs.

By law, all producers selling cattle or calves, for any reason and regardless of age or sex, are required to pay a combined $2 per head assessment: $1 for the state, and $1 for the national Beef Checkoff programs. This $2 per head assessment also applies to cattle marketed in the form of beef or beef products to consumers directly, through retail or wholesale outlets, or for export purposes. Though producers are required to pay the collective $2 per head assessment, the $1 per head Texas Beef Checkoff may be refunded if an application form is submitted within 60 days of the payment.

The Beef Checkoff assessment is due by the 15th of the month following the sale or harvest of an animal. The assessment is typically collected and remitted by a “collection person.” A collection person is any entity that makes a payment to a producer for cattle purchased. This can include livestock auctions, feedlots, and processing facilities, as well as individuals. Producers who are marketing cattle in the form of beef may be responsible for remitting the Beef Checkoff assessment themselves unless their processing facility offers to remit the assessment on their behalf.

For people engaged in direct beef sales, it can be a bit confusing to know when the Beef Checkoff assessment is due. The key is understanding that assessment is due any time ownership is transferred or slaughter occurs if the slaughter is not wholly for personal consumption. Considering some examples may be useful.

• Example 1: Rancher sells a live animal to Buyer. Buyer, as the owner of the animal, has it slaughtered and processed at a custom exempt facility for personal use.
  • In this scenario, there was an ownership transfer when Rancher sold the animal to Buyer, meaning the $2 assessment was due at that time. As the person who made payment for the purchase, the Buyer would be responsible to remit the $2 assessment. There would be no assessment due at slaughter, because Buyer was the owner of the animal that was slaughtered for personal use.
• Example 2: Rancher raises a calf. She takes it to a plant and has it processed for personal use.
  • Here, there would be no assessment due as there was never a transfer of ownership and the slaughter was for personal use.
• Example 3: Rancher raises a calf and takes it to an inspected plant to have it processed. She will sell the beef to others.
  • In this situation, the $2 assessment would be due at the time of slaughter because the slaughter was not for personal use. There would not be an additional assessment due when the Rancher sells the meat, as the assessment applies only to live animals.
• Example 4: Rancher raises a calf and sells it to Buyer. Buyer finishes out the calf and takes it to an inspected plant to have it processed. Buyer plans to sell the beef to other consumers.
  • In this example, there will be two Beef Checkoff payments due. First, when Rancher sells the calf to Buyer, that is a transfer of ownership triggering an assessment. Second, when Buyer takes the calf to slaughter, which is not for personal use, that also triggers an assessment.

For questions about the Beef Checkoff, information regarding Beef Checkoff-funded activities, or to remit the Beef Checkoff, visit the Texas Beef Council website. or contact the Texas Beef Council at (512) 335-0582.For more information on legal and economic considerations for direct beef sales, check out our handbook and online course.