Beef checkoff decision likely headed to Supreme Court

By LORI COPE | East Texas Edition

July 17, 2003 -- Although a federal appeals court has ruled U.S. beef producers cannot be forced to pay the $1-per-head fee to support the national beef checkoff program, the final say will likely be decided by the U.S. Supreme Court.

On July 8, a three-judge panel of the 8th U.S. Circuit Court of Appeals in South Dakota affirmed a 2002 ruling by U.S. District Judge Charles Kornmann that the beef checkoff program is unconstitutional because it violates beef producers' First Amendment rights.

But the 9th Circuit Court of Appeals in Montana is reviewing an appeal on a similar challenge to the beef checkoff where the District Court ruled the program is constitutional. Then, there's the 3rd Circuit Court in Philadelphia and the 10th Circuit Court in Denver that have also found the beef checkoff program to be constitutional.

When asked about the various judicial decisions, and which would prevail for the nation's beef producers, Sharyl Sauer, executive director of industry communications for National Cattlemen's Beef Association, replied, "That's an interesting and complicated question and a big reason why this case is likely to go to the Supreme Court - because of conflicting lower court rulings."

In the instance of the most recent appeals court ruling (8th Circuit Court), the government and pro-checkoff interveners have 45 days to request a rehearing of the case, Sauer added. Until that time, even though the appeals court agreed with Kornmann's decision that the collection of fees cease, both national and state beef checkoff programs remain in operation and collections will continue.

Statistics show the beef checkoff program's collected fees are more than $80 million a year. The monies are used to increase beef demand through programs of promotion, research and education. In Texas, the Texas Beef Council is charged with overseeing the program. Of the $1-per-head collected, half of the money remains in the state, while the other half goes to the national Cattlemen's Beef Promotion and Research Board.

One Texas beef producer said he feels "loosing the checkoff program would be a step back for all of us."

Dwyatt Bell, a cow-calf rancher and an Independent Cattlemen's Association board member, said he supports the checkoff. "I feel the beef checkoff program has contributed greatly to the beef industry's recent gains in the market share. Since the year 2000 we have seen the demand for beef improve. The industry is doing a much better job of meeting consumer demands and the beef checkoff has played a material role in conducting research, developing new products, and educating both the consumer and the producer."

But not all beef producers feel the same, as evidenced by the matter being considered by federal judges. The recent decision by the 8th Circuit Court of Appeals began several years ago when three South Dakota ranchers and others sued the U.S. Department of Agriculture and the Cattlemen's Beef Promotion and Research Board. They said the ads paid for through the checkoff program promote beef in general and not just beef raised in the United States. Their main argument stated they should not be forced to pay for a marketing campaign they do not agree with.

"We are pleased with the decision by the Court of Appeals," said National Farmers Union President Dave Frederickson on July 8. "NFU supports a voluntary, not mandatory, producer controlled checkoff promotion program of U.S. origin commodities."

On the other hand, the president of the National Cattlemen's Beef Association, Eric Davis, replied to the court's decision: "We are deeply disappointed, ... but remain committed to our goal of protecting the future of the beef checkoff. The beef checkoff is absolutely critical to protecting the long-term marketing climate for beef. Without the checkoff and its 'Beef. It's What's For Dinner' consumer promotions, the beef industry would not be as successful as it is today."