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                                                                                        National Livestock Producers Association

                                     National Producer
National Livestock Producers Association                                      Volume 12, No. 5           • July / August 2002

Judge Orders Halt to National Beef Checkoff
On June 21, South Dakota Federal District Court                   The Court found that “All of these so-called ‘producer
Judge Charles B. Kornmann ruled that the Beef                     communications,’ which were prepared with checkoff
Promotion and Research Act and checkoff “are                      funds, stress to the producers that the Beef Board is a
unconstitutional and unenforceable” because they                  ‘producer-controlled, independent Board.’ They stress
violate the First Amendment of the U.S. Constitution.             to the producers that the beef checkoff is an ‘industry-
Judge Kornmann enjoined any further collection of                 run program,’ that ‘cattlemen run the program,’…
the $1 per head checkoff after July 15.
                                                                  “Nowhere in any of the ‘producer communications,’”
“I am disappointed by the ruling of the U.S. District Court       the Court found, “does it even hint that the Board is
in South Dakota that the Beef Promotion and Research              accountable to the (U.S. Department of Agriculture)
Act is unconstitutional. The U.S. Department of                   or that the speech being paid for by the producers is
Agriculture regards such programs, when properly                  that of the federal government.”
administered, as effective tools for market enhancement,"
USDA Secretary of Agriculture Ann Veneman said.                   In a further rejection of the defendants’ “government
                                                                  speech” argument, the Court said, “Common sense
“The beef promotion program in particular has helped              tells us that the government is not ‘speaking’ in
beef demand to increase and has contributed to                    encouraging consumers to eat beef. After all, is the
increased U.S. beef exports. These results have led to            ‘government message’ therefore that consumers should
support for the program by a majority of beef producers,"         eat no other product or at least reduce the consumption
she said. “We are consulting with the Department of               of other products such as pork, chicken, fish or soy
Justice to determine next steps.”                                 meal? The answer is obvious.”

According to Livestock Marketing Association (LMA)                The Court’s ruling, Perrin said, “confirms that
President Billy Perrin, the key elements of the Court’s           producers will be able to use their money to promote
ruling include:                                                   the beef they produce, in the way they want, in association
…Beef producers cannot be compelled to finance                                                continued on page 7 . . .
advertising programs with which they disagree. The
Court said the Constitution requires that beef                                   What's Inside?
advertising be paid for “only from assessments paid by
producers who do not object to advancing the generic               Equity Names Adami as New President/CEO . . . 2
sale of beef and who are not coerced into doing so
against their wills.”                                              Elston Steps in for Caubin as Tri-State's CEO. . . 3

Several individual plaintiffs in LMA’s lawsuit objected            Tolman Works to Create Dairying Alternative . . 4
to checkoff-financed advertising, claiming the ads made
no distinction between U.S. and foreign beef.                      United Premiers Livestock Listing Service . . . . 6
…Claims made by the Cattlemen’s Beef Board and the
                                                                   Judge Orders Halt to Beef Checkoff, cont. . . . 7
government, that checkoff programs constitute
government speech, are contradicted by several years               Announcements . . . . . . . . . . . . . . . . . . . . . . . . . 8
of so-called “producer communications.”
The National Producer

Adami Named Equity Cooperative Livestock
Sales Association's President and CEO
Baraboo, WI (Equity) - In May            future,” Norm Fruit,                    directors, and dedicated employees,
Equity Cooperative Livestock Sales       Chairman of the                         any obstacle will in time, be
Association announced the                Board, said.                            surmounted,” commented Adami.
resignation of President and CEO
                                                                                 Adami is the proud father of two
Gregory A. Beck.                         Adami has been
                                                                                 grown children and has one
                                         employed by the
                                                                                 grandchild. He and his wife, Jill,
At that time the board of directors      cooperative since
                                                                                 reside in Lodi, Wis.
had asked Charles Adami, current         July 2000 in his Charles
Vice President of Finance and CFO,       position of CFO. His    Adami           Equity Cooperative Livestock Sales
to take on the role as interim           experience        in    financial       Association is comprised of 22
President and CEO. At a recent           management, team building and           divisions, which assists today’s
meeting, the regional board of           business forecasting was gathered       producers with the marketing,
directors unanimously voted to           over a career spanning 25 years in      managing and financing of their
name Adami President and CEO.            various businesses and positions.       agricultural businesses.

“The regional board of directors is      “This position will have its
confident in Chuck’s leadership          challenges, but with the
abilities and knows he will direct       cooperative’s rich history, strong
the cooperative toward a successful      patron base, insightful board of
                                                                                 The National Producer
                                                                                 Monthly newsletter of the National
NLPA to Hold Board Meeting in                                                     Livestock Producers Association

Colorado Springs, July 24-27                                                              Sam Philips
                                                                                    Chairman of the Board of
Colorado Springs, CO (NLPA) --           The focus of the 2002 Summer                     Jack Hanson
The National Livestock Producers         Board Meeting will be the strategic       Vice Chairman of the Board
Association will hold its summer         planning of the future direction of
board meeting at the Antlers Adam's      NLPA. Facilitating the planning                  R. Scott Stuart
Marks Hotel in Colorado Springs,         will be Dr. Carol Barbeito, Ph.D.,               President & CEO
July 24-27.                              president of CLB & Associates. Dr.              Scharee Atchison
                                         Barbeito is a specialist in working        Director of Member Services
The NLPA Summer Board meeting            with association management and               & Corporate Secretary
was to include each member               leadership in planning, needs                 Melissa A. Schneider
organization's full board of directors   assessment, organization governance        Director of Communications
in order to help directors get a         and structure, and evaluation. The               Contact Us At:
better understanding of their            NLPA Board of Directors will be                 National Livestock
organization's involvement in            challenged to refine the goals of the         Producers Association
                                                                                 660 Southpointe Court, Suite 314
NLPA. However, due to market             organization and provide direction        Colorado Springs, CO 80906
conditions and special circumstances     for the future.                            Telephone: (719) 538-8843
among member organizations, the                                                      Toll-free: (800) 237-7193
meeting has been scaled back to                                                        Fax: (719) 538-8847
                                         For more information about
                                                                                     Web site: www.nlpa.org
include only the NLPA Board              summer board meeting, please              Email: maschneider@nlpa.org
representatives.                         contact NLPA at 1-800-237-7193.

                                                                                    National Livestock Producers Association

Elston to Take Over for Caubin as CEO
at Tri-State Livestock Credit Corporation
Colorado Springs, CO (NLPA) --            Caubin has been                            Elston comes to Tri-State from Mid
After 20 years as President and           involved         in                        Valley Bank in Red Bluff, Calif.,
Chief Executive Officer of Tri-State      NLPA for almost                            where he was senior vice president
Livestock Credit Corporation, Jack        20 years. He has                           and chief credit officer. Elston began
Caubin is ready to hand the reins to      served as chair-                           working in the credit/banking
someone else.                             man of many of                             business in 1978 as the branch
                                          NLPA's commit-                             manager for Lassen Production
"Working for Tri-State has been a         tees and as a board                        Credit Association. Then he worked
fabulous trip," Caubin said. "I was       member.             Jack Caubin            for Bank of America before he became
able to be in a lot of farm and ranch                                                a loan officer at Mid Valley Bank.
kitchens and businesses and travel        "Jack has ben an improtant part of
the back roads of the United States."     the NLPA board of directors for            Elston spent several years as a ranch
                                          many years," Scott Stuart, NLPA            manager. He spent a year managing,
Caubin spent his first years at Tri-      President and CEO, said. "His              Lucas Ranches, cattle and hay
State trying to build up business and     experience and leadership are              ranches in Lakeview, Ore. Then he
working to change the company's           greatly appreciated and will be sorely     managed Weigand Ranch in
problems into challenges.                 missed."                                   McArthur, Calif.

"We worked really hard to develop         Caubin said that he is not retiring        "I am looking forward to working
a structure to get Tri-State back on      completely though. He will be              with people in the livestock industry
its feet so it would really work toward   working with Tri-State as a                and focusing solely on agriculture,"
the benefit of the owners and users,"     consultant in his home office.             Elston said.
he said. "We eventually found the
right banking relationship, which         "I am looking forward to spending          Elston graduated from California
proved critical to making this            more time with my wife, Lauralee,          Polytechnic University in San Luis
happen."                                  and my family," he said. "I have a         Obispo, Calif., with a bachelors
                                          sailboat and plan to do more sailing       degree in animal science and a
Caubin is originally from California,     and some golfing too. "                    masters degree in general
but he was raised in Colorado.                                                       agricultural sciences. He also has
Before joining Tri-State he worked        "I have truly enjoyed my time with         secondary teaching credentials in
for Farmland Industries, Adolph           Tri-State, but there are lots of things    vocational agriculture.
Coors, Co., First National Bank,          I've wanted to do and didn't have
Colorado National Bank and                the time, now I will," he said. "Tri-      Elston also serves as secretary/
Western Farm Management Co.               State will be in good hands."              treasurer for the Tehama County
                                                                                     Cattlemen's Association, is a past
Caubin has been a livestock lender        As of July 1st, Mike Elston will           director of the Kiwanis Club of Red
(sheep included) since 1967 in            officially take over the duties as         Bluff and is a treasurer of Cal Poly
Colorado, Wyoming, Idaho,                 President and CEO.                         Boots and Spurs, member of the
Oregon and California. He used                                                       Rodeo Club and member of Alpha
his knowledge of financing ewe/           "It will be difficult to follow Jack,"     Zeta.
lamb and feeder lamb operations as        Elson said. "He has done a really
a member of NLPA's Sheep & Goat           wonderful job for the company and          Elston and his wife, Vicky, who is a
Fund Committee.                           he is highly respected and well-liked."    school nurse, live in Lincoln, Calif.
The National Producer

NLPA Sheep & Goat Fund Recipient, Tolman Sheep
Dairy Farm Works to Create New Dairying Alternative
Tolman Sheep Dairy Farm, LLC, is a       suited for the development of the       “We are supplying a raw material —
work in progress, developing a sheep     sheep dairying industry because of      sheep milk — to a niche market that
dairying model that can be a realistic   its available land base, its existing   has an enormous demand for its
option for Upstate New York farmers.     dairy agriculture infrastructure, and   premium-priced product,” Tolman
                                         especially its close proximity to the   said. “The domestic market for
The Tolman Sheep Dairy Farm is           largest discretionary marketplace       sheep-milk products is extremely
owned by Bee Tolman and her              in the world.                           strong, particularly in the
husband, Simon Hurley, and                                                       Northeast. There has been
managed by Tolman. The business,         “The sheep business is not generally    considerable interest in this
located in Cazenovia, N.Y., became       a financially viable option for         enterprise among (cow) dairy
fully operational in April 2000.         Upstate New York farmers looking        farmers in the region, many of
                                         for an alternative to milking cows,”    whom are on the lookout for
The sheep dairy sits on a leased 300-    Tolman said. “The addition of           alternatives to traditional dairying.”
acre farm in Chittenango, N.Y.,          sheep milk as a revenue source,
and now includes 250 East Friesian       however, might make a small flock       From a farm business perspective,
cross dairy ewes and a purpose-built     of about 250 ewes a more appealing      Tolman believes that Tolman Sheep
sheep-milking parlor. The main goal      option for an individual farmer.”       Dairy Farm model is attractive
of the farm is to be milking 250                                                 because of its modest start-up costs
highly productive ewes and                                                       ($100,000), its modest annual
producing over 75,000 pounds of          "There has been considerable            operating costs ($70,000), its
Grade A milk in 2003.                    interest in this enterprise             potential for return on assets, and
                                         among (cow) dairy farmers in            the strong market for its products.
The Tolman Sheep Dairy Farm is           the region, many of whom are            And from a dairy farmer’s perspective,
located in an area of Central New                                                the Tolman Sheep Dairy Farm model
                                         on the lookout for alternatives
York where the (cow) dairy industry                                              might be attractive because of its
                                         to traditional dairying.
is struggling and seeing a steady                                                location on an ex-dairy farm, its use
decline in cow numbers, with no                -- Bee Tolman, Manager            of standard machinery and feeding
real alternatives emerging. In fact,                                             systems, and its easy conversion of
Tolman Sheep Dairy Farm sits on a                                                dairy buildings and facilities.
farm property where cows were            Unlike the Tolman Sheep Dairy
milked from 1903 to 1997.                Farm, most sheep dairy farmers          Tolman is well-suited to take on the
                                         in the Northeast also process and       venture. She began her agricultural
“Dairy farm numbers in Madison           direct-market their own cheese.         career as a shepherd in Scotland in
County (where the dairy is located)      That model may be attractive to         1982, followed by shepherding jobs
and neighboring Herkimer and             those inclined to produce and           for eight years in New England. In
Oneida Counties, have dropped by         promote      “farmstead”-style          1990, She left shepherding to
about 4 percent every year for the       products from small, part-time          pursue a Masters degree in Animal
last half-dozen years,” Tolman said.     farm operations.                        Science at Virginia Tech.
“Most exiting farms are small farms,
averaging 62 milking cows and            Tolman Sheep Dairy Farm,                Tolman and Hurley moved to New
operating on less than 100 acres.”       however, sells its raw sheep milk to    Zealand in 1993 to capitalize on a
                                         the Old Chatham Shepherding             career opportunity for Hurley.
Tolman said she believes that            Company, a New York State cheese        While in New Zealand, Tolman
Upstate New York is optimally            manufacturer.                           worked for 18 months as managing
                                                                                  National Livestock Producers Association

                                                                                  Left: A friend puts cups on the last
                                                                                  ewes in the 12-bail row. Center:
                                                                                  Ewes in the parlor. Right: Sheep at
editor of a regional farming                                                      the Tolman Sheep Dairy, "row up"
newspaper, for 12 months as a                                                     in the 12-bail rapid-exit parlor.
research technician on Massey
University’s sheep and beef farms,        “Getting loans from community ag          lamb they prefer, and my husband
and finally, happily, she spent 30        lenders was difficult,” she said. “We     and I have learned a bit of their
months as a (cow) dairy farm worker.      did find a supportive local bank to       language — enough to greet them
She and Hurley relocated to Upstate       finance part of the start-up costs,       or commiserate about the weather.”
New York in 1998 to be closer to          but at a fairly high interest rate
their families.                           because sheep dairying is such an         Tolman said she feels a bit like a
                                          unknown. NLPA allowed us to               guinea pig right now in regard to
Tolmans’ farm experience has              refinance, which helped a lot.”           her farm business model.
included both extensive, low-input
systems in Scotland and New Zealand,      In addition to the dairy, Tolman          “If I can make it work it will be a
and intensive, high-input systems in      Sheep Dairy Farm sells many lambs         good model for those producers
New Hampshire and Vermont. She            for meat consumption - accounting         looking for a decent alternative to
said this helped her appreciate the       for about 50 percent of the farm          the marginally viable dairy
profit limits placed on Northeast         revenues. Tolman said she sold 450        business,” she said. “The sheep dairy
livestock agriculture by the high costs   lambs last year, about 97 percent of      business hasn’t created a return at
of feed and capitalization. This has      which went to the local Bosnian           this point, but I’m working on it.
made her determined to focus on the       community either directly or              These things take time.”
low-cost production of sheep milk         through a contact - without packers       Story submitted by Bee Tolman
and market lambs.                         or breakers.                                   and Melissa Schneider

When Tolman learned of the                “The Bosnians represent a
NLPA Sheep & Goat Fund she                substantial market in our immediate            NLPA Sheep & Goat
decided it was worth a try to get a       area,” she said. “They love lamb                Fund Applications are
loan, and in September 2000, the          and prefer to serve it for special                available online!
NLPA Sheep and Goat Fund                  occasions or family gatherings.”
Committee entered a loan                                                                Visit the NLPA Web site at
agreement with Tolman Sheep               “Service really counts with them,                        or call
Dairy to use toward the purchase of       too,” she said. “Over the past couple                1-800-237-7193
state-of-the-art milking equipment.       of years I’ve learned what type of
The National Producer

United Producers Premiers Livestock Listing Service
Columbus, OH (UPI) -- Producers Technologies, Inc.,                audience of potential buyers while continuing to allow
a division of United Producers, Inc. has developed a               for the traditional personal interaction.
new livestock listing service available on
                                                                   "United Producers, Inc.., is committed to bringing our
                                                                   members the programs and services they need that will
This listing service will bring livestock right to the front       allow them to be competitive in today's livestock
doors of buyers and sellers across the country. Producers          markets," Mike Bumgarner, Vice President of
will get first hand what livestock species are available           Marketing Services and Producers Technologies, Inc.,
along with a detailed description and pictures for each            said. "We are excited to offer a service that will not only
lot. The livestock listed will include special features in         provide greater competition for our producers, but will
United's regular auctions, special sales and direct on             also provide improved marketing efficiency. Buyers
farm lots.                                                         will be able to view livestock at their convenience and
                                                                   make marketing decisions according to their schedules."
Each lot listing will include head count, type, weight,
asking price and health information. Producers will                This new service lists available cattle, hogs, sheep and
also have the option of sorting the animals into various           any additional livestock needed. To get more
groups that best fit viewing needs. By placing livestock           information regarding this new service or to participate,
online United Producers, Inc. is able to reach a larger            please visit www.uproducers.com

Dairylea Joins Efforts to Establish Livestock ID System
Syracus, NY (Dairylea) - Dairylea         Members of the consortium                    The      Wisconsin      Livestock
Cooperative Inc. has joined the           recognize that creating a universal          Identification Consortium (WLIC)
Wisconsin Livestock Identification        program would be an overwhelming             is a group of more than 20 trade
Consortium (WLIC) in order to             challenge and therefore decided to           associations, proprietary firms and
lend support to, and stay abreast         first develop a regional identification      government agencies interested in
of, developments in the creation          system that includes all livestock           adding value to, and protecting the
of a food animal identification           species. WLIC was formed and has             interest of, livestock agriculture
and information system. The               secured funding to establish a regional      through animal identification and
members of WLIC, in an effort to          system that could serve as a model for       product tracing from the producer
add value to - and protect the            a national program. Starting out on a        to the consumer.
interests of - animal agriculture,        regional scale will allow problems to
advocate the implementation of a          be worked through more easily and            Dairylea Cooperative Inc. is a
national livestock identification         efficiencies to be created before            farmer-owned           agricultural
program through regionalized              implementing full-scale.                     marketing and service organization
systems.                                                                               based in Syracuse, N.Y. It has more
                                          "There is a critical need for a universal    than 2,500 member farms located
The WLIC believes that the                identification system in our country         throughout the Northeast. Dairylea
development of a national                 in order to ensure public health             is a provider of resources such as
program would allow the U.S.              and safety as well as profitability for      insurance coverage, loan programs,
livestock industry to better contain      animal agriculture,” said Clyde              milk price risk management
and respond to problems with              Rutherford, president of Dairylea            services, business planning, livestock
animal disease and food safety. In        Cooperative. “That is why we are             marketing (through Empire
addition, it would provide a              involved. The Wisconsin Livestock            Livestock), and investment and
number of economic benefits for           Identification Consortium is headed          retirement planning through its
those involved in animal                  in the right direction and we are            holding company, Agri-Services,
agriculture.                              pleased to be a part of this group.”         LLC.
                                                                                 National Livestock Producers Association

from page 1 . . . Judge        Orders Halt to Beef Checkoff NCFC Names LTA
with people whose beliefs they          stayed so that the checkoff can           Vice President and
share. It’s now up to the industry to   continue while the case advances to       General Counsel
come together to discuss a voluntary    the next court level.
                                                                                  Washington, DC (NCFC) —The
program, which we can all support.”
                                                                                  National Council of Farmer
                                        “We will continue the business of
                                                                                  Cooperatives (NCFC) announced
LMA began a petition drive in 1998,     promoting beef while this process
                                                                                  that Charles R. Rawls will become
to obtain a producer referendum         takes place, with minimal
                                                                                  the new Vice President for Legal, Tax
on the checkoff. LMA later filed a      distraction,” Willey said. “We believe
                                                                                  and Accounting (LTA) this June.
lawsuit in South Dakota federal         the checkoff, the ‘Beef. It’s What’s
                                                                                  Rawls will also assume the title of
district court challenging the U.S.     For Dinner.®’ promotions and
                                                                                  NCFC’s General Counsel upon the
Department of Agriculture’s process     other similar programs designed to
                                                                                  retirement of Jim Krzyminski, the
to validate those petitions.            build demand have returned
                                                                                  current general counsel.
                                        significant dividends to producers
The matter became a constitutional      over the years. We will follow the        Rawls will work with the NCFC
challenge to the checkoff following     law, of course, but believe the judge     member-led Legal, Tax & Accounting
the Supreme Court’s decision last       has misinterpreted it. Fortunately,       Committee to help identify and
year ruling that the mushroom           the beef industry has an extremely        analyze legislative and regulatory issues
checkoff was unconstitutional.          strong case, and we believe we will       important to farmer cooperatives and
                                        prevail in higher court. The              to develop recommended actions on
National Cattlemen's Beef               checkoff has been and will continue       these issues. Rawls comes to NCFC
Association Responds to Ruling          to be an effective way for producers      from the Senate Committee on
                                        to invest in their future.”               Agriculture, Nutrition, and Forestry,
The challenge to the beef checkoff's                                              where he has served as general counsel
constitutionality was raised by LMA     “Foreign marketers are increasing         since 2001.
and the Western Organization of         efforts to promote their beef in the
Resource Councils (WORC) and            U.S. and our competitive position
several individual produces in an       will be weakened if we lose the
earlier petition. Defendants in the     checkoff,” Alexander said. “So,
case are the U.S. Department of         LMA and WORC are opening the
Agriculture, the Cattlemen's Beef       door for importers to promote their
Promotion and Research Board,           own brands in the U.S. — and they
which administers the checkoff, and     are doing it with contributions to
Nebraska Cattlemen, Inc., which is      WORC from activist and                          Every day, Mutual of Omaha helps

leading a group of supportive           environmentalist organizations that
                                                                                        millions of people like you feel more
                                                                                        secure about tomorrow. We offer
producers to intervene on behalf of     are working to put U.S. beef                    insurance products that help protect
                                                                                        your income, assets and lifestyle.
the checkoff.                           producers out of business.”                     And our business planning services
                                                                                        can help you ensure a financially
                                                                                        sound future.
“We believe this ruling is only a       Willey noted that since Congress                NLPA members have access to a
temporary setback for American          launched the $1-per-head beef                   variety of Mutual of Omaha products
beef producers,” said Wythe Willey,     checkoff in 1986, all previous                  and services - many with reduced
                                                                                        rates or enhanced benefits not
president of the National               constitutional challenges to it have            available to the general public. Call
                                                                                        Mutual of Omaha at (800) 223-6927
Cattlemen’s Beef Association and a      been defeated. He said that in 15
beef producer from Cedar Rapids,        years the administration of the
Iowa. Willey said NCBA is               program has not changed. It has                                Begin today.

confident the case will be overturned   always been producer directed with
on appeal and the judge’s ruling        USDA oversight.

The National Producer

NIAA Summer Expo to Focus
on Animal Identification
Bowling Green, KY (NIAA) – The National Institute              NLPA Launches Redesigned Web Site
for Animal Agriculture (NIAA) has announced ID/                In early June, the National Livestock Producers
INFO EXPO 2002, a conference and trade show                    Association's launched its re-designed and reorganized
devoted to the subject of animal identification and            web site at www.nlpa.org. The new site has familiar
information systems.                                           information such as information on NLPA member
The event will take place in Chicago, July 29 - Aug. 1,        organizations, contacts, and general information about
and will feature the National Food Animal Identification       NLPA. The new site has a site map for easier navigation,
Symposium, the first-ever National Equine                      an expanded links area, and a benefits page.The new
Identification Symposium and a trade show featuring            site has an expanded communications page that includes
manufacturers and service providers in the animal              weekly newsbriefs, which are updated every Friday, and
identification and information systems business.NLPA           downloadable versions of The National Producer
will also facilitate a Livestock Subcommittee meeting at       newsletter. Also, the newly added Resource section has
the ID/INFO EXPO. All NLPA members are invited to              the latest information regarding livestock disease
participate in the EXPO and the Subcommittee meeting.          outbreaks, legislation and other issues affecting NLPA
                                                               members. The NLPA Sheep & Goat Fund has its own
For more information, please call Michelle Thomas at           section on the new site, which includes: applications,
270-782-9798 or visit the NIAA web site at                     contacts, grant information and project descriptions as
www.animalagriculture.org.                                     well as its own news section.

                                                                            (719) 538-8843
                                                                            Colorado Springs, Colorado 80906
                                                                            660 Southpointe Court, Suite 314
                                                                        National Livestock Producers Association


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