Beef checkoff ruling an opportunity for reform

DENVER— Rocky Mountain Farmers Union (RMFU) is calling Friday’s court decision ruling the mandatory beef checkoff unconstitutional as a win for independent producers.

“This ruling is positive for America’s hard working cattle producers. It will enable them to promote their product as they see fit,” said RMFU President John Stencel. “Farmers Union supports checkoff programs but only if they are optional and truly producer-controlled.”

South Dakota Federal District Court Judge Charles B. Kornmann ruled June 21, that the Beef Promotion and Research Act and checkoff “are unconstitutional and unenforceable” because they violate the First Amendment of the U.S. Constitution.

Kornmann halted any further collection of the $1 per head checkoff after July 15. Since passage of the beef promotion act in 1985, cattle producers had paid a mandatory $1-per-head fee on each head of cattle sold in the United States. The checkoff currently raises about $86 million per year, which is used by the Cattlemen’s Beef Promotion and Research Board and state beef councils to promote beef in U.S. and foreign markets. “Those opposed to the mandatory checkoff complained that the advertisements promote all beef, not just U.S. beef,” Stencel said.

The suit is the result of a petition drive initiated in 1998 by the Livestock Marketing Association (LMA) to obtain a producer referendum on the checkoff. The LMA later filed a lawsuit in South Dakota federal district court challenging the U.S. Department of Agriculture’s process to validate those petitions. According to LMA spokesperson John McBride, the judge decided to rule on the constitutionality of the checkoff before considering the validity of the referendum petitions. Although it is likely Kornmann’s decision will be appealed, McBride said the order to cease collection of checkoff dollars after July 15 is likely to be upheld.

In making his ruling, Kornmann criticized cattle producers being required to pay for promotions, which are a form of speech, that they oppose. He also said it was wrong for them to pay for advertising that benefits restaurants and retail outlets, likening the beef checkoff system to requiring a wheat farmer to pay for advertising of General Mills cereal.

Stencel notes that failures of both the mushroom and beef checkoffs to pass the constitutionality test will likely result in additional lawsuits by producers dissatisfied with their checkoffs. “This ruling is an excellent opportunity for producers to improve or replace these programs.”

Claims made by the Cattlemen’s Beef Board and the U.S. Department of Agriculture that checkoff programs constitute government speech were contradicted by several years of producer communications in which it is stated that the Beef Board is a “producer-controlled, independent board.”