By MITCH LIES
SALEM -- Come this time next year, Oregon sheep growers may be paying their state assessment by meat sales and not wool.
The Senate Rural Communities and Economic Development Committee has passed a bill backed by sheep growers that is aimed at giving the Oregon Sheep Commission a more reliable source of revenue.
Senate Bill 719 allows the commission to assess sheep growers up to $1 per head on sheep sold for meat.
Under the current system, producers are assessed 3 cents a pound on wool sales.
John Fine, chairman of the commission and president of the Oregon Sheep Growers Association, said the current system has resulted in a dramatic fluctuation in annual assessment revenue. Growers tend to store wool when prices are down and sell it when prices increase, Fine said.
Assessment revenue has fluctuated from $9,000 to $29,000 in recent years, Fine said.
"This fluctuation in the income from the assessment on wool makes it very difficult for the commission to plan a budget," Fine said.
The bill sets a minimum assessment of 50 cents a head and stipulates that the assessment cannot increase more than 10 cents in any 12-month period.
The commission is looking at assessing growers 50 cents a head in the near future, according to testimony.
"It isn't meant to be a major increase in revenue," said Sen. Doug Whitsett, R-Klamath Falls, who sponsored the bill. "It is designed to stabilize and make more consistent that revenue so they can plan their budgets better."
Fine said it should be relatively easy for the commission to transition to the new assessment formula, given that the American Lamb Board also assesses by the head.
The national assessment is $1 a head.
The state assessment would be in addition to the national assessment.
Reed Anderson, a sheep producer from Brownsville, Ore., said state assessment revenue can be leveraged to access federal assessment revenue for in-state promotion campaigns.
"The American Lamb Board is always looking for matching funds to do promotions around the nation," Anderson said. "The problem here in Oregon is we never know how (much revenue) we are going to have.
"In Oregon now, we have a real opportunity to try to get our dollars together and focus on (promotional) activities," he said.
By law, assessment revenue can only be used for research, education and promotions.
SB719 now goes to the Senate floor.