Capital Press

USDA Agricultural Marketing Service last week published three annual reports on the dairy checkoff program but gave no public explanation as to why it failed to submit those mandatory reports to Congress since 2012.

A month earlier, the Organization for Competitive Markets and the National Dairy Producers Organization called on USDA Secretary Sonny Perdue to correct the failings of former Secretary Tom Vilsack and immediately prepare and publish the mandatory reports.

USDA responded by publishing the reports for fiscal years 2013, 2014 and 2015.

Mike Eby, president of the National Dairy Producers Organization, said he is grateful to Perdue for following through with his responsibility but would also like an explanation as to why it took the agency so long to fulfill its requirement.

“We don’t want it simply to be pushed under the rug. We want an explanation,” he said.

The checkoff represents more than $400 million annually — about half of all commodity checkoff assessments — and the dairy industry deserves an explanation, he said.

Dairy checkoff assessments collected in 2016 totaled $426.9 million. Assessments for all 22 research and promotion commodity programs totaled $885.5 million, according to a spokesman for USDA’s Agricultural Marketing Service, which administers the checkoff programs.

Eby said there’s a reason the dairy checkoff specifically requires annual congressional oversight. It’s the law, and Perdue needs to investigate why USDA appears to have thought it didn’t have to adhere to the law, he said.

“It’s unfortunate that dairy has such low priority that it’s taken five years for something that’s supposed to be done annually,” he said.

In response to Capital Press, a USDA-AMS spokesman said the delayed release of the annual reports represent a multi-year effort by USDA and independent evaluators “to develop a more reflective illustration of the programs’ changing strategic direction from traditional dairy and milk promotion activities.”

“Modifications to the econometric modeling, novel simulations developed by the independent evaluation team, and securing the necessary data for these impact analyses posed significant challenges,” the spokesman said in an emailed statement.

“Those challenges further set in motion a series of year‑over-year delays but were essential to ensure adequate economic evaluation of the Dairy and Fluid Milk Promotion Programs,” she said.

Data collection and preparation of the 2016 report to Congress are currently underway, she said.

Under the checkoff program, dairy farmers are assessed 15 cents per hundredweight of milk they produce and importers are assessed 7.5 cents per hundredweight of milk they import (or the equivalent).

The mandatory dairy checkoff report includes an accounting of funds collected and spent, summaries of checkoff activities and independent analysis of the effectiveness of the various promotional and marketing campaigns.

The Organization for Competitive Markets is thankful that USDA released the reports to Congress and is looking forward to digging into the reports to ensure dairy farmers have the transparency they deserve in the checkoff program, said Angela Huffman, OCM director of communications.

The organization earlier stated the missing reports follow a history of documented abuses of checkoff dollars in commodity programs and cover up of those abuses by USDA.

OCM is also wanting USDA to release the financial and audit documents for the beef checkoff program, which it has been asking for since 2014, Huffman said.