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Sheep Extension Program
American Lamb Checkoff
"This
information is provided by the American Sheep
Industry Association (ASI) with basic explanations
of the checkoff to assist you with the implementation
of this program." |
As of July 1, 2002, all members of the sheep industry
will be participating in the new lamb checkoff created
by the Lamb Promotion, Research & Information Order.
Assessments will be used for American lamb programs.
Funds and programs will be managed by a Board of Directors,
which will be appointed this fall by the U.S. Department
of Agriculture (USDA). This information is provided
by the American Sheep Industry Association (ASI) with
basic explanations of the checkoff to assist you with
the implementation of this program. This information
is not an official legal document but rather a guide
to help explain the checkoff collection and remittance
system. The official Federal Register notice of the
regulation published June 7, 2002 can be found at www.ams.usda.gov/lsg/mpb/rp-lamb.htm,
or contact Marketing Programs Branch, AMS/USDA at (202)
720-1115.
All sheep are subject to the assessment (all feeder
and market lambs and all breeding stock and cull animals)
when sold.
General operation of this checkoff is to have the purchaser
collect the assessment with a deduction from the sales
proceeds of the seller and carry the funds forward to
point of slaughter or export at which time the checkoff
is collected and sent to the Board.
Who Will Be Assessed
- Producers
- Seedstock producers
- Exporters
- Feeders
- Packing plants
Lamb importers will not be assessed, but purchasers
of live lambs from Canada should contact the USDA.
Rate of Assessment
One-half cent ($.005) per pound of live lambs (ovine
animals of any age) sold by producers, seedstock producers,
exporters & feeders.
30 cents ($.30) per head of lambs purchased for slaughter
by first handlers. A first handler is defined as an
entity that takes possession of the lambs for slaughter
(including custom slaughter) or sale directly to the
consumer. First handlers will usually be packing plants,
but possibly producers and feeders.
Marketing agencies (sale barns) will not be assessed
but will be required to collect assessments from the
producer, feeder or seedstock producer and pass it on
to the subsequent purchaser.
Assessments for Direct Marketers
Persons who are both producer and first handler (one
who processes lamb or lamb products of their own production
and markets the products) will be assessed one-half
cent per pound on the live weight at the time of slaughter
and will be required to pay an additional assessment
of $.30 per head.
How It Works: Collection and Remittance
Each producer, feeder or seedstock producer is obligated
to pay that portion of the assessment that is its share
and pass it on to the subsequent purchaser – ultimately
reaching the first handler or exporter, who will remit
the total assessment. If a person is both producer and
first handler, they will be responsible for remittance.
Assessments MUST be remitted to: Lamb Promotion, Research
& Information Program, c/o the Secretary at USDA,
23039 Network Place, Chicago, IL 60673-1230. The USDA
is receiving assessments until the Board becomes functional.
Assessments must be sent with Form LS-81, Monthly Remittance
Report, found at www.ams.usda.gov/lsg/mpb/lamb/lambforms.htm.
Remittances are due no later than the 15th day of the
following month in which lambs or lamb products were
purchased for slaughter or export. Thus, assessments
due on a lamb sold for slaughter in July will be due
August 15th. If the 15th day of the month falls on a
weekend or holiday, then the assessment will be due
the next business day. Late payment charges will be
assessed by increasing unpaid assessments by 2% each
month.
If a person has sought non-producer status as described
under “Exemptions”, a copy of the form for
Certification of Non-Producer Status needs to be provided
to the subsequent purchaser. This form should be forwarded
with remittances.
Each person collecting an assessment must give the
person from whom the assessment was collected a receipt.
This receipt should include:
- Name and address of the person collecting the assessment;
- Name of the person who paid the assessment;
- Number of head of lambs sold;
- Total weight in pounds of lamb sold;
- Total assessments paid by the producer, seedstock
producer or feeder;
- Date of sale.
Additional Notes on Collection and Remittance
If more than one producer, feeder or seedstock producer
shares the proceeds from the sheep sold, each is obligated
to pay that portion of the assessment proportionate
to its share of the proceeds.
Failure of a person to collect the assessment from
a producer, feeder or seedstock producer does not relieve
the producer, feeder or seedstock producer of their
obligation to pay the assessment.
Exemptions
The order allows for a 10-day hold period during which
no assessments are due if the sheep is sold before the
period expires. Thus, market agencies – i.e.,
commission merchants, auction markets, brokers or livestock
markets in the business of receiving lambs for sale
or commission -- are generally exempt from paying the
assessment.
Any person seeking an exemption must complete a form
certifying that the sheep were resold no later than
10 days from the date on which the market agency acquired
ownership. A copy of Form LS-78, Certification of Non-Producer
Status can be found at: www.ams.usda.gov/lsg/mpb/lamb/lambforms.htm.
The completed form should be given to the subsequent
lamb purchaser to include with remittances.
It should be noted that although market agencies are
exempt from the assessment, they are responsible for
ensuring that they collect the assessment from the seller
and pass it on to the subsequent purchaser.
Reporting Requirements and Records
Books and records must be made available for inspection
to verify any required reports. Records must be retained
for three years.
Refunds
The order calls for a delayed referendum to be conducted
no later than three years after assessments begin. It
also provides the right for any producer, seedstock
producer, feeder, first handler or exporter to receive
a refund, or pro rata share thereof, of their assessments
paid during the pre-referendum period. The refund is
available whether the referendum passes or not. Refunds
will be made within 90 days after the results of the
referendum are announced.
Refund requests require a refund application, Form
LS-85, Application for Refund, found at www.ams.usda.gov/lsg/mpb/lamb/lambforms.htm.
The form must be accompanied by proof of payment of
assessments and are due no later than 60 days from the
date the assessments were paid.
Examples
Packer purchases a 130 pound lamb. (.005 x 130 pounds
= $0.65) will be deducted from the seller’s proceeds
and remitted to the checkoff by the packer. The packer
must also remit an additional 30 cents at slaughter
to the checkoff.
Producer sells 80 pound feeder lamb. (.005 x 80 pounds
= $0.40) is deducted from his/her proceeds by the feeder.
The feeder carries that 40 cents forward as his sale
proceeds will be deducted for the final live weight
of the lamb at slaughter. The lamb weighs 130 pounds
at slaughter. The feeder forwards the assessment on
the weight gain (.005 x 50 pounds = $0.25) as well as
the prior assessment of 40 cents ($.40 = $.25 = $.65)
to the packer. Since it is the point of slaughter, the
packer will remit the 65 cents to the checkoff plus
his 30 cent assessment.
Producer sells 200 pound cull ewe. (.005 x 200 pounds
= $1) is deducted from his proceeds by the auction barn
and the purchaser carries that assessment forward to
the point of slaughter or export, at which time the
final weight is assessed and funds are remitted to the
checkoff. The auction barn completes the non-producer
status form to show it is exempt from the checkoff.
Producer has a 65 pound lamb custom slaughtered for
sale to the consumer. Producer remits (.005 x 65 pounds
= 32.5 cents) plus 30 cents first handler assessment
to the checkoff.
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