Latest / CattleUSA Daily / 172: The Dollars Behind The Beef Checkoff with Terry Quam

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172: The Dollars Behind The Beef Checkoff with Terry Quam · CattleUSA Daily

• 0:00
  Today on the podcast, we are welcoming Terry Kwan on to the
• 0:04
  podcast. Terry is a beef advocate, a
• 0:08
  industry connoisseur that is just involved in a little bit of
• 0:11
  everything. Terry is involved not only on
• 0:14
  the beef side of agriculture, but also on the crop side.
• 0:17
  Him and his family run and operate an operation in Michigan
• 0:21
  and Terry comes on today to share all about that, their
• 0:25
  experience. And we are also talking about
• 0:28
  financials with the Cattle Beef Board today and the beef check
• 0:32
  off. Terry has the great honor of
• 0:34
  serving as the secretary and treasurer for the Cattlemen's
• 0:38
  Beef Board. And so he's here today to talk
• 0:40
  money, talk financials talk. That dollar that we send to the
• 0:44
  beef check off for every single animal that is sold, what is
• 0:47
  happening with it? Where does that go?
• 0:50
  How do they track it? What gets sent to where?
• 0:53
  How do they make those decisions?
• 0:55
  All of those things. Terry breaks every bit of it
• 0:59
  down for us today. So without further ado, let's go
• 1:02
  ahead and hop into this episode with Terry.
• 1:04
  But if you guys could take a second to like, subscribe, rate
• 1:07
  and review this podcast, we would really appreciate it here
• 1:09
  at the team. And all of the links that you
• 1:12
  need to do all of those things are going to be in the show
• 1:14
  notes. Make sure you check those out as
• 1:15
  well. And let's go ahead and get into
• 1:17
  this episode with Terry. Welcome to the Cattle USA Daily
• 1:25
  podcast, your go to source for the latest livestock markets,
• 1:28
  industry insights and the updates shaping agriculture
• 1:31
  today. I'm your host, Lauren Moylan, a
• 1:33
  passionate advocate for agriculture, here to keep you
• 1:36
  informed and connected. Now let's dive into today's
• 1:39
  episode. Terry, welcome to the podcast.
• 1:49
  We are so excited to welcome you on.
• 1:51
  This is your first time on the podcast.
• 1:53
  If you could take a minute and just share a little bit more
• 1:55
  about you, your past, kind of what brought you to where you
• 1:59
  are right now. Just introduce yourself for the
• 2:01
  listeners. Well my name is Terry Quam, I'm
• 2:04
  part owner with my family and Marde Angus Farm LC in Lodi, WI.
• 2:10
  We're a 200 and spear bred Angus Cal calf operation.
• 2:15
  We now have added in the last two years we have added a
• 2:19
  Shorthorn operation. My mother came from a Shorthorn
• 2:22
  family and that herd dates back to 19 O 8.
• 2:26
  So we now are owners also of Miller Farm Shorthorns.
• 2:30
  So basically I'm a cattle person.
• 2:34
  We also run diversified crops. We run corn, soybeans, wheat,
• 2:38
  alfalfa, sweet corn for the canning company.
• 2:41
  We do a lot of different things. Wow, awesome.
• 2:44
  Can you touch a little, a little bit on just your background
• 2:46
  within the beef industry and the leadership positions that you
• 2:49
  kind of have as well and just different things that you've
• 2:53
  kind of done across the industry and how you currently serve NCBA
• 2:57
  as well? Well, I've, I've been active in
• 2:59
  a lot of different AG organizations.
• 3:01
  I'm a member of Farm Bureau, I'm a member of the National
• 3:05
  Cattlemen's Beef Association. I'm a member of NCBA.
• 3:08
  I'm a member of the Wisconsin Corn Growers, Wisconsin Soybean
• 3:11
  Association. My really the active role that
• 3:15
  I've had is I only live 20 miles from Madison, WI, a 350,000
• 3:24
  population town capital of the state.
• 3:27
  And it dawned on me early in my career as farming, if one thing
• 3:32
  was going to put me out of business, it was not going to be
• 3:35
  my ability to farm. It was not going to be the
• 3:37
  cattle. It was going to be regulation
• 3:40
  and other issues that were forced upon me by other things.
• 3:45
  So that's when I really decided to get started being active in
• 3:49
  organizations. Even though I was a young
• 3:51
  farmer, two kids, young wife, working a lot, you know, to try
• 3:56
  and make this thing successful, I realized that the easiest way
• 4:01
  for me to lose the farm was to get regulated or permitted off
• 4:04
  the farm. And when you live only 20 miles
• 4:07
  from a 350,000 population town and you have cars driving by
• 4:13
  your driveway every day going to that town, you realize that if
• 4:19
  you want to be successful in this industry, you have to
• 4:22
  participate in the industry. And that's when I got involved
• 4:26
  with the Wisconsin Cattlemen's on a heavy basis.
• 4:29
  I became a director, then I became their president, and then
• 4:33
  I spent 20 years directing their lobbying organization,
• 4:37
  supervising the lobbyists for Wisconsin Cattlemen's
• 4:41
  Association. I was active in, also active
• 4:44
  with Farm Bureau, corn growers, soybeans, just in those
• 4:48
  associations. Then I had the opportunity, one
• 4:53
  of my former bosses when I worked for the Lodi Tanning
• 4:55
  Company as a kid came to me and asked me to be a part of the
• 4:59
  Lodi Agricultural Fair. And again I said, Nope, I'm too
• 5:03
  busy. I just don't have time.
• 5:05
  And I came home at 10:00 one night and, and I was talking
• 5:09
  with my wife while we were eating and I told her the
• 5:11
  opportunity and she's and when she asked what did you say?
• 5:14
  And I said Nope, I'm too busy. And she looked at me and called
• 5:18
  me a hypocrite. And she said, you do realize
• 5:21
  someone did that for you. Why won't you do it for your
• 5:25
  kids or for other kids? And so that started a 35 year
• 5:30
  fan of being on the board of the Lodi Agricultural Fair and 29
• 5:35
  years as fair board president. We took it from a fair that had
• 5:39
  when I got on, we had 4-4 different species there, 15
• 5:44
  total animals to now we have 450 kids, 1600 entries between
• 5:50
  everything and it's just a blossomed into a great success.
• 5:56
  But I get, I guess it all boils down to where I am now at the
• 5:59
  Cattlemen's Beef Board. After 20 years of doing the
• 6:03
  political side of things, I wanted to change.
• 6:06
  I think the industry needed to change because all the people my
• 6:09
  age were retiring and bringing in new people to work for their
• 6:14
  associations. And so I decided to let that go,
• 6:18
  let someone new for Wisconsin cattlemen get involved, a
• 6:21
  younger person, so they could grow with the other people that
• 6:24
  were coming up the ranks of the other organizations.
• 6:27
  And Farm Bureau nominated me to get on the Cattlemen's Beef
• 6:30
  Board. So I did.
• 6:31
  I was appointed by USDA. And I've taken an active role at
• 6:36
  Cattlemen's Beef Board doing the same philosophy that if you
• 6:40
  really want your industry to drive and survive and you got to
• 6:45
  be a part of it, you got to be active in it, and you've got to
• 6:49
  have your voice heard. And so that's what I've done.
• 6:51
  I couldn't have put it a better way, just summing everything up
• 6:55
  to get involved and be active. And if you want to see a change,
• 6:59
  you kind of have to be a part of the change.
• 7:01
  So thank you for being a part of that change.
• 7:03
  In your role on the Kettleman's Beef board, you serve as
• 7:07
  secretary and treasurer. So today I kind of want to talk
• 7:09
  about finances and what that looks like especially I feel
• 7:13
  like it's very timely, right? Today we're recording this on
• 7:16
  October 1st and that marks the start of the brand new fiscal
• 7:19
  year for the beef check off. And So what this has been a hot
• 7:23
  topic of conversation amongst producers, amongst people
• 7:26
  involved with the beef check off and the beef board and different
• 7:29
  things like that. But there's so many people that
• 7:31
  just don't necessarily know what happens at the beginning of the
• 7:36
  fiscal year. So can you kind of break that
• 7:38
  down for us, Terry October? One is the beginning of the
• 7:41
  fiscal year, but what people don't realize it's just a date.
• 7:45
  And it does start the new financial year and it starts the
• 7:48
  new versions of the authorization requests, which
• 7:53
  are approved by the beef operating committee, Beef
• 7:55
  promotion operating committee. And what if the authorization
• 7:58
  requests are, that's what the nonprofit organizations that
• 8:02
  want to do work on the check off or the check off or the
• 8:07
  producers, they have to submit to the Cattlemen's Beef Board to
• 8:11
  get funding to do projects for us.
• 8:15
  And whether it's in research, promotion, consumer information,
• 8:19
  producer, communications, the export business, you all have to
• 8:24
  do the same thing, put in that authorization request.
• 8:28
  And in the month of September, 20 people, 10 from the
• 8:31
  federation, 10 from the Cattlemen's Beef Board come
• 8:35
  together and they decide which authorization requests are going
• 8:39
  to get funded. And now that's a long process.
• 8:43
  We spend probably 3 months going over all those authorization
• 8:46
  requests, picking them apart, nitpicking them.
• 8:49
  And I mean, I feel sorry for the people that present those
• 8:53
  authorization request because we always have to trim around $10
• 8:57
  million. So it makes it very difficult.
• 9:01
  And a lot of very important questions have to be asked,
• 9:05
  serious questions about financing, about their goals,
• 9:09
  what they're going to do, how they're going to do it, why are
• 9:12
  they going to do it, How will it build demand for beef.
• 9:16
  And that's the key to this whole thing.
• 9:18
  Any dollars spent by the check off is a dollar spent to build
• 9:22
  demand for beef. And that don't matter if it's in
• 9:25
  research, promotion, industry information producer,
• 9:29
  communication in the export world, international marketing.
• 9:34
  It has to build demand for beef. And one of the things the
• 9:38
  committee has to look at when you're getting them
• 9:41
  authorization requests to start new on October one, is it a
• 9:45
  balanced approach? Are we doing it so that the
• 9:49
  whole industry can can benefit? Are we doing enough research?
• 9:54
  Are we giving the producers the information they need to be in
• 9:58
  favor of the check off? Are we giving the consumers the
• 10:01
  information? Are we doing the right ad
• 10:03
  campaigns? Are we hitting the right people?
• 10:06
  So it's a very, very complex system.
• 10:09
  So it all starts October 1. After everything's been
• 10:12
  approved, first the operating committee has to approve it,
• 10:17
  then it has to go to the executive committee of the
• 10:20
  Cattlemen's B Board. They have to prove it.
• 10:23
  From there, they go to USDA, they have to approve them.
• 10:28
  Nothing gets done on the check off world without USDA's
• 10:32
  approval. So once USDA is approved of
• 10:35
  them, they come back, they're all approved.
• 10:38
  October one starts, all the contractors get to go to work,
• 10:42
  then they get to start doing the exact jobs that they were
• 10:45
  designed to do, whether it be roll out an ad campaign, whether
• 10:49
  it to do post harvest research, pre harvest research, whether it
• 10:54
  be get into that international marketing realm and start
• 10:59
  working in different countries to move our product.
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  So I mean October 1 is the start date that we get to do this.
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  And from there it doesn't just start there.
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  What people have to realize, these people all work on a cost
• 11:16
  recovery basis. And what that means is they
• 11:19
  don't get paid until the work is done, reviewed and approved.
• 11:23
  And the big thing about that is it has to go through several
• 11:27
  steps to get approved. It has to go through our
• 11:30
  financial audits at in the the Cattlemen's Beef Board.
• 11:34
  We have two people that review them extensively to make sure
• 11:38
  that the hours they're putting in are correct, make sure
• 11:41
  everything meets with the ACT in the order.
• 11:44
  And then from there, we have what's called the evaluation
• 11:48
  committee. And that is a group of
• 11:50
  producers, all producers, that sit down and go over these ARS
• 11:55
  on a quarterly basis to make sure that they're doing exactly
• 11:59
  what they're supposed to do. That means are they doing the
• 12:02
  research they're supposed to do? Are the ad campaigns hitting the
• 12:05
  people they're supposed to? Yeah.
• 12:07
  Are the international marketing people hitting the markets
• 12:11
  they're supposed to hit? So the evaluation committee does
• 12:14
  that quarterly. And at the end of the year, each
• 12:17
  one gets an evaluation of are the results there?
• 12:21
  Are they're not there? Did they meet all their
• 12:24
  objectives? Everyone has to have measurable
• 12:27
  objectives. What are you going to do for us?
• 12:30
  How are you? And then they got to tell us how
• 12:32
  they're going to do it. So this, it all starts October
• 12:36
  1, but it goes throughout the whole year.
• 12:39
  But the big thing everybody has to realize it is on a cost
• 12:42
  recovery basis. They do not get paid until the
• 12:45
  work is complete, till the work is done.
• 12:48
  And some work may get done within a month, some work may
• 12:52
  get done within six months. And that helps because the check
• 12:56
  off is a revolving door on economics.
• 12:59
  We get every month, we get remittances from all the state
• 13:03
  beef councils and the importers. So our money comes in monthly.
• 13:07
  And so by not having all the work completed at one time, that
• 13:12
  helps us keep the checkbook flowing, keep everything going.
• 13:16
  We may pay some money out every month, some of them may get it
• 13:20
  all at the end, some may not. So that helps us balance the
• 13:24
  budget by doing a steady cash flow.
• 13:28
  And how we determine that budget is we use many, many economics
• 13:33
  and economic analysis from a lot of different people on to
• 13:37
  determine where the cattle inventory is, where the cattle
• 13:41
  inventory is going to go. Because after all, we get $1.00
• 13:44
  for every animal marketed. So we have to determine a year
• 13:49
  in advance what the cattle markets going to do and we've
• 13:53
  got to do it accurately. And that takes probably two to
• 13:56
  three months to complete that analysis of both the internal
• 14:00
  people at CBB reaching out to cattle packs, reaching out to
• 14:05
  every entity that we can. What are you seeing in the
• 14:07
  country reaching out to USDA, getting their numbers and coming
• 14:11
  up with that final dollar that we think we have I.
• 14:16
  Think that one of the biggest concerns that a lot of producers
• 14:19
  have is that the dollar that they are contributing is going
• 14:24
  towards something, right? That it's actually making an
• 14:26
  impact or that it when it's going to these check off funded
• 14:30
  programs, that everything within those programs is being done
• 14:34
  properly within the rules, all of those things.
• 14:38
  How do you guys kind of like go about that process of making
• 14:41
  sure and tracking those dollars and then making sure that those
• 14:44
  dollars are following the rules and the regulations and
• 14:47
  everything being done properly there?
• 14:49
  We have to do what's called a return on investment every so
• 14:53
  many years. And that return on investment
• 14:56
  study is done by Cornell, has been done in the last two terms
• 15:00
  by Cornell University. And they do an in depth study of
• 15:04
  every program, every AR that we've done.
• 15:08
  They do. They look at how the industry
• 15:10
  was at the start. They look at how the interest
• 15:14
  fee was 2-3 years ago. They look at every aspect of the
• 15:17
  beef industry from consumer all the way through producer.
• 15:22
  And they determined what did the check off do for us?
• 15:26
  For every dollar that we put into the check off, what did it
• 15:29
  do? Did it make us money?
• 15:31
  Did it not make us money? And the nice thing about it is
• 15:36
  Cornell came out just this past year with the new return on
• 15:40
  investment study and it said for every dollar that we put in, we
• 15:44
  get $13.41 back. And that's a tremendous
• 15:49
  investment when you think about putting a dollar in and getting
• 15:52
  $13 back. And a lot of that is driven by
• 15:55
  what are sales doing, what are export sales doing, how things
• 16:00
  are going in the grocery store. So I mean, there's a lot of ways
• 16:04
  to calculate that. I'm not an economist.
• 16:07
  I'm not a Cornell researcher. I rely on them.
• 16:12
  I feel they do a really, really good job.
• 16:14
  But I mean, that's the biggest thing we look at is the return
• 16:18
  on investment study. Is it doing something for us?
• 16:21
  Is it getting us our dollars? Now, if that number would go
• 16:25
  down, we'd have to look at and maybe change courses, maybe
• 16:28
  change some of how the authorization requests are
• 16:31
  funded. But right now, if you look at
• 16:34
  the return on investment, because every check off has to
• 16:37
  do 1 by the act in order, if you look at the beef dollar coming
• 16:41
  back to us, we're one of the highest ones in the ag world.
• 16:45
  Amazing, amazing. I think it's so fun to be able
• 16:47
  to like sit with someone and be able to talk about those things
• 16:49
  and say like, hey, there's so much backing all of this to show
• 16:53
  that like, hey, there's an actual impact that's being made
• 16:56
  here and your dollar is going towards something that you can
• 16:59
  trust and that is really pushing the beef industry forward both
• 17:04
  nationally and internationally on just all different fronts.
• 17:08
  I want to switch topics a little bit onto a little bit of a
• 17:11
  lighter note. I know that my husband and I are
• 17:14
  avid football fans around this household on Sundays or whenever
• 17:18
  they're playing. The Chiefs are on in our
• 17:20
  household or we're at K State Games on the weekends here in
• 17:23
  Manhattan. Terry, do you and your family
• 17:25
  have any family fall traditions that you really lean in towards,
• 17:30
  especially on the beef side? I know at our tailgate it is
• 17:34
  beef only hot dogs at our tailgates.
• 17:37
  A I'm allergic to pork so we couldn't have pork even if we
• 17:40
  wanted to, but it is beef hot dogs at our family tailgates.
• 17:44
  What are your guys's kind of traditions and things like that?
• 17:48
  Well, we are both college football fans.
• 17:51
  My wife and I both went and attended the University of
• 17:54
  Wisconsin Madison. So we're average bad Badger fans
• 17:58
  and we've had four season football tickets since the day
• 18:02
  we graduated. And I got bad news.
• 18:04
  That's been a long time ago. But we do have four season
• 18:08
  tickets and my daughter and her husband go with us to the games.
• 18:12
  We're a little different. We used to tailgate years ago
• 18:16
  and do the whole grill out, sit by the car, do all that.
• 18:20
  But when my daughter went to the University of Wisconsin, she got
• 18:25
  a job at a local Tavern called the Laurel Tavern.
• 18:29
  It's a just a friendly community bar, you might say.
• 18:33
  And she bartended on Thursday night.
• 18:37
  And just so happens that every Thursday night, the coach for
• 18:42
  the University of Wisconsin football team and his assistants
• 18:45
  would all come in, sit at one end of the bar at her end of the
• 18:48
  bar and, and be there for 2-3 hours meeting and doing things.
• 18:53
  And, and then she would waitress when she was on college on
• 18:57
  Saturday, Saturday. So she did game days.
• 19:00
  So we stopped our tailgates at that time and we went to that,
• 19:04
  that Tavern. And that's what we've been doing
• 19:07
  ever since because it's good family atmosphere.
• 19:10
  They have great hamburgers. They have great.
• 19:13
  I always eat a bacon cheeseburger while I'm there.
• 19:16
  My wife will always eat a Reuben sandwich while we're there.
• 19:20
  And but one of the nicest things, if you hit the timing
• 19:24
  right and they have the game when you're supposed to have it,
• 19:27
  you can come back after the game and have a really good prime rib
• 19:30
  dinner. They do a tremendous job with
• 19:33
  prime rib. And so then you can come back,
• 19:35
  have a few cocktails, have a good prime rib meal, and just
• 19:40
  have a really, really leisurely day where my wife doesn't have
• 19:44
  to pack everything up and then unpack everything.
• 19:48
  We park there. It's about 9/10 of a mile to the
• 19:51
  stadium. We take a nice leisurely walk
• 19:54
  up. We take a nice leisurely walk
• 19:55
  down and just enjoy both eating beef on that day and enjoy the
• 20:01
  college atmosphere. Now on Sundays, because I take
• 20:04
  off Saturdays, I don't get to watch the Packers on TV or go to
• 20:08
  the games. Them I usually listen to on the
• 20:11
  radio, either in the combine or tractor or whatever, working
• 20:15
  cattle, whatever we're doing. And again, my mother's the
• 20:19
  biggest Green Bay Packer fan you're ever going to see, so she
• 20:23
  don't miss them. But because we do take The
• 20:26
  Saturdays off and and what have you, that's what we do.
• 20:30
  That is so fun. Honestly, the whole like prime
• 20:34
  rib dinner at a Tavern. That is my ideal college
• 20:37
  football day right there. Like in a nice mile walk, you
• 20:40
  get to walk off the game afterwards, whether it was a win
• 20:43
  or lose, you get to go walk it off and go enjoy a nice drink
• 20:47
  and all the things. So I couldn't think of a better
• 20:49
  idea. And especially tailgates are a
• 20:51
  lot of work. They are a lot of work to put
• 20:52
  together. You got to get there at the butt
• 20:54
  crack of dawn, like to get in line and get in and do all the
• 20:58
  things. And so I love that tradition.
• 21:01
  I think that that might have to be something that we take into
• 21:04
  consideration as we continue to go throughout our football
• 21:08
  experiences and things like that.
• 21:10
  But Terry, as we round out this podcast, I have just enjoyed
• 21:14
  chatting with you so much today and just learning more about
• 21:17
  everything that you have done within your family and your
• 21:20
  operation and just within the world of cattle all together.
• 21:23
  Is there anything else that you would like to leave with our
• 21:26
  listeners today as we rounded out?
• 21:27
  All I ask, I want to leave to everybody that's out there in
• 21:30
  the cattle world, or even if you're in the crop world, even
• 21:34
  if you're in anything else, get involved.
• 21:36
  It has been very, very rewarding for me the amount of people that
• 21:39
  you meet all across the United States when you go to these
• 21:42
  meetings, the friendships you develop.
• 21:45
  But most importantly, I've always been a big promoter.
• 21:48
  If you don't like things the way they are, help change them.
• 21:51
  It doesn't do any good to step back and complain about things
• 21:56
  if you're not willing to get in the in the circle and and do the
• 21:59
  work that it takes to get it changed.
• 22:02
  And I go back to my college days being a smart ass kid, coming
• 22:07
  off the farm, going to college, going to come back and farm.
• 22:10
  I had to take a rural sociology course and and of course I was a
• 22:13
  meat and animal science major. Whole role was to come back to
• 22:16
  farm. What the heck did I need rural
• 22:18
  sociology for? And I look back to the one thing
• 22:22
  that I, I bring up the most of my four years at the University
• 22:27
  of Wisconsin, Madison, all my technology, everything that I
• 22:30
  learned then has been outdated. But the one thing holds true,
• 22:34
  what that rural sociology professor said, for society to
• 22:38
  survive and and thrive, you have to give back as much as you took
• 22:44
  out of it. And to me that is so true that,
• 22:47
  and I've been lucky enough to take a lot out of this cattle
• 22:50
  industry. This cattle industry has made a
• 22:52
  great living for me. It's been great memories, a lot
• 22:56
  of great people. I just want to make sure that
• 22:58
  I'm doing my part so that the next generation coming up on
• 23:01
  this farm has the opportunity to do the exact same thing I do and
• 23:06
  any anybody else in the industry, and I really encourage
• 23:09
  people to get involved. Wonderful Terry, thank you so
• 23:12
  much for your time today. And I just want to echo
• 23:15
  everything that you said too. I have found the most rewarding
• 23:18
  part of being involved in this industry is the fact of just
• 23:22
  getting involved in the 1st place.
• 23:24
  The connections that I've made, the people I've met, the places
• 23:26
  I've gone, just everything that comes with that and getting out
• 23:31
  of your comfort zone has, Oh my gosh, it has absolutely just
• 23:35
  changed my life and changed the way that I view our industry,
• 23:38
  how it continues to grow and go forward.
• 23:40
  So thank you for your amazing words, your advice, your
• 23:43
  thoughts, everything that you shared with us today, Terry.
• 23:45
  We really appreciate it here at the podcast.
• 23:47
  To all of our listeners, make sure you check out the show
• 23:50
  notes down below. I have all of the links down
• 23:52
  below if you want to learn anything more or dig deeper into
• 23:55
  any of the topics that we chatted about today.
• 23:57
  And as always, have a blessed rest of your day and we will see
• 24:00
  you all tomorrow on another episode.
• 24:02
  Have a good one y'all.