Thursday, December 11, 2008

US sheep producers: you have a chance to right a wrong

Sometime in the next few months, sheep producers across the US will have the opportunity to end the regressive sheep production tax that was imposed on us in 2002 under the checkoff program.

I am not opposed to taxation. I am opposed to foolish programs, and that's exactly what the American Lamb Board has set up with the money that is collected on every sheep that is slaughtered in the US or imported from overseas.

The checkoff program was created to increase demand for American Lamb, generically. What an odd thing, considering that we can't fill the demand for lamb with our current levels of production. But producers lined up in 2005 with visions of "Got Milk" dancing in their heads and voted (quite narrowly) to impose the tax on themselves.

You've got three years of receipts now since your last chance to review this. Has the program worked? Has it improved your bottom line? Do you see any more American lamb in the local supermarket? By any objective measure, unless you are working for the ALB or one of the ad agencies it hired, the answer is no. There is less American lamb being produced today than there was in 2005. Tax an activity and the activity will tend to decline, don't you know.

What the American sheep industry needs is not promotion, but infrastructure. We need kill plants. We need distribution channels. We need storage. We need production planners. We need shepherds. We need knowledge. The production tax addresses none of these issues, even tangentially.

How many shoppers or food service buyers are looking at the lamb on offer and making a decision about whether to buy American lamb or New Zealand product? None. Usually the NZ product is all that's available. Because in NZ, they have kill plants, distribution channels, storage, production planners, shepherds, and knowledge. They can put the product in front of the chefs and shoppers year-round. We can argue about quality, and we should, but telling people that they shouldn't buy lamb from NZ because it's low quality and then having nothing to offer them to replace it isn't a great strategy.

Even if the American Lamb Board's generic promotion campaign was wildly successful and American Lamb became a brand that consumers recognized and demanded, it still does most small producers no good. Our customers already want American Lamb -- it's what we produce. We are essentially being asked to subsidize the branding of the commodity market, which tends to drag down the image to the lowest common denominator. And folks, let's be honest. There is some right horrible American lamb out there.

In order for the referendum to pass, it must pass two thresholds. First, it must gain a majority of the votes of sheep operations. Second, it must pass based on the volume of sheep represented by the operations. If it only had to pass one way or the other, the big producers would decide the question. But it must past both ways. That means your vote counts equally whether you have two sheep or 10,000.

Inertia is a powerful force. Unless we work hard and make sure that everyone who is eligible knows the issues and votes, the production tax will stay in place. You can also expect a strong pro-tax campaign from the ALB, the American Sheep Industry Association, and the state sheep associations, which will have money and organization behind them. I hope that sheep producers reading this blog will be active, and not just vote against the tax but also talk to their sheep-producing friends and neighbors to bring this chapter to an end.

Thanks for your consideration.

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