Washington’s brand inspection program is again going broke, less than two years after lawmakers hiked fees on ranchers, dairies, feedlots, livestock markets, slaughterhouses and horse owners.

The new fees saved the program from bankruptcy, but provided only a reprieve. The program is back to losing money and will have a $305,000 deficit by mid-2023, the department projects.

The department has recommended raising fees again. The proposal likely will rekindle a debate about the program’s cost, purpose and value, and who will shoulder the burden of supporting it.

“I question the willingness of stakeholders to ante up more for brand inspection fees,” said Jack Field, executive director of the Washington Cattle Feeders Association. “I know my board has zero interest in a brand fee-increase conversation.”

The agriculture department checks the identification of cattle and horses that are being sold to prevent theft and trace animal diseases. The program receives no general taxes, so fees must cover the department’s expenses.

Lawmakers in 2019 raised a host of fees that support the program. Importantly, the fee to check sales involving branded cows rose by 10% to $1.21 per head, while the fee to inspect sales of unbranded cows was raised by 150% to $4 per head.

The price gap was intended to encourage producers to identify cattle with a brand or an electronic ear tag. The move apparently worked. The department has inspected more branded cattle at $1.21 than expected and fewer unbranded cattle at $4.

As a result, the inspections are bringing in less money than expected.

Robbie Parke, brand inspection manager, said the department anticipated more producers individually identifying their cattle. “They just did it a lot faster than we thought they would do it,” he said.

Also, more feedlots opened their books, allowing the department to audit transactions at 28 cents a head. The audits are cost-effective, and the feedlots are the only part of the cattle industry where fees exceed costs. But the increased audits lowered revenue.

In all, the department projected collecting $2.7 million the first year, but took in only $2.3 million. The department doesn’t foresee revenues going up. Meanwhile, the cost of supporting a 20-employee program will increase by 3% a year, mostly for salaries and benefits, the department projects.

To meet expenses, the department says it would have to charge $80 an hour for inspections or $2.78 per head, or some combination of per-head and per-inspection fees.

The Legislature sets fees. Lawmakers directed the department to make recommendations. The department’s recommendations include making the per head fee for branded and unbranded cattle the same.

”Abolishing the two-tier system would make it simpler and make it fairer across the board for all cattle producers,” Parke said.

That could mean a price increase for ranchers who brand their cattle. The Washington Cattlemen’s Association has strongly supported the value of brand inspections, but ranchers are hard-pressed to meet expenses now, the association’s lobbyist, Mark Streuli, said.

“The cow-calf guys are at the bottom. They’re not the ones who can take an increase,” he said. “There is no where for them to pass fees on.”

Unbranded cows are common on dairies. Washington State Dairy Federation policy director Jay Gordon said dairy farmers weren’t happy about paying $4 a head.

The program’s twin purposes — theft prevention and animal disease traceability — have become too intertwined, he said. “They are not the same thing,” he said. Dairy farmers are not particularly concerned about rustlers on the open range, he said.

“This presents an opportunity to restart the conversation to do something different than just raising fees because the department is out of money,” Gordon said.

The department also has recommended adjusting fees annually for inflation and increasing fines for not reporting sales.