TO: State Beef Council Execs/Collection Compliance Staff
FR: Steve M. Barratt, Director of Collections Compliance
Cattlemen’s Beef Promotion and Research Board
RE: Clarification on Packer Assessments
A situation arose recently in which a packer bought cattle for processing but was then forced to place the cattle in a feedlot longer than ten days. The question was asked: Do packers have to pay the checkoff if they hold cattle longer than ten days? The answer is yes. In this situation, the packer should collect $1 per head when purchasing the cattle and pay another $1 when processing cattle held longer than 10 days in the feedlot.
Since one packer had a question on this issue, we thought others would as well. Please consider sending this to all packers/processors in your state. They would probably appreciate it as well, since it may help them stay in compliance with the law.
Imported Cattle assessments
Questions have also arisen over how to treat imported cattle and when a second checkoff assessment is due. First, a dollar is collected on all live cattle, beef and beef products by U.S. Customs for the CBB when they enter the U.S. This import assessment, however, is separate and distinct from other assessments which may need to be paid.
When can importers use a non-producer status form?
If cattle transfer ownership in a foreign country, such as Canada, meaning 1) payment is tendered and 2) risk of loss transfers, then the person bringing the cattle into the U.S. may present a Certification of Non-Producer Status form when reselling the cattle in the U.S. in lieu of having the $1 checkoff collected from them. Note that in these circumstances, a non-producer certificate may only be used when reselling cattle in the U.S. within 10 days of their purchase in another country.
For example, if a packer is buying cattle in Canada and bringing them to the U.S. to be processed, they have ten days within which to import and process the cattle. If they hold them longer than ten days, then they become a “producer” and another checkoff assessment is due.
When do importers have to pay a second assessment?
If cattle do not transfer ownership in another country but are sold for the first time in the U.S., then a second assessment in addition to the dollar paid to Customs at the border is necessary. A seller may not use a non-producer status form to be exempt from paying the dollar just because a dollar was paid at the border.
For example, if a packer imports cattle into the U.S.for processing and they are sold to the packer for the first time in the U.S., then two checkoff dollars are owed – $1 at the border, and a second $1 for change of ownership in the U.S. The $1 collected at the border goes to the CBB and the second assessment is collected by the state in which the importer resides.
Call at (303) 850-3453 or (800) 388-2333 with any questions.