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Supreme Court Upholds Beef Checkoff

posted on May 27, 2005

O-I-E ... B-S-E ... R-F-I-D ... To work in the cattle business these days, producers may need a little H-E-L-P.

The beef industry is transforming. Border closings, identification systems and disease have seen to that. But demand for U.S. beef, especially here at home, continues to climb. And it's worth noting that the U.S. has resumed about 91 percent of the beef exports that existed before the 2003 discovery of Mad Cow disease in the State of Washington.

That speaks to the power of marketing what most consumers believe is a safe and healthy product. But in marketing, too, the beef industry has been put to the test ... a test finally resolved this week by the highest court in the land. John Nichols reports.


Supreme Court Upholds Beef Checkoff

On a vote of 6-to-3, the U.S. Supreme Court this week upheld the constitutionality of the Beef Checkoff program. The High Court ruled the government was within its rights to force all U.S. beef producers to pay for multi-million dollar advertising and research initiatives.

Beef Checkoff Advertisement: "Beef: It's What's for Dinner."


Established by Congress in 1985, the Beef Checkoff program requires farmers and ranchers to pay a $1.00-per-head fee on cattle sold in the United States. Those funds, which amount to more than $80 million per year, are administrated by a government-appointed group to support promotion and research programs.

Secretary of Agriculture Mike Johanns: "The Supreme Court's decision on beef check off is welcome news. I have always been a believer in the checkoff programs, dating back to the time when I was Governor of Nebraska, they have done so much good.

The Livestock Marketing Association, or LMA, challenged the constitutionality of the checkoff. The LMA favored a referendum for America's cattle producers to vote whether to continue or abolish the mandatory program. LMA officials were optimistic the Supreme Court would strike down the checkoff.

John McBride, Director of Information, LMA: "We are very, very disappointed in the way the Supreme Court ruled given the fact that we got very strong decisions out of the federal district court and the federal court of appeals. We were hopeful the Supreme Court would rule the other way, they didn't and we think it is unfortunate, but obviously we are going to have to move on."

Pork Checkoff Advertisement: "Pork: The Other White Meat."

Mandatory checkoff programs are prevalent in American agriculture. Successful advertising campaigns for many commodities are well-known and cited frequently for sales of those goods. According to the National Cattlemen's Beef Association, or NCBA, the checkoff helped grow consumer demand for beef, by more than 25 percent since 1998.

In recent years, however, many of the mandatory programs have been challenged by producers who claim, for one reason or another, that they shouldn't be forced to pay the assessments.

Larry Ginter: "I want my checkoff dollars back!"

The Supreme Court's ruling on the Beef Checkoff has far-reaching implications for other commodities as well. Similar cases are pending for both the pork and dairy checkoffs. And while the High Court has ruled in favor of other mandatory promotional programs in the past, a 2001 Supreme Court ruling struck down the mandatory mushroom checkoff.

In that decision, the Supreme Court cited precedents giving members of labor unions the right to withhold dues from messages they did not support. But in its decision this week, the High Court ruled the beef checkoff is "government speech" controlled by USDA and therefore, constitutional.

Secretary of Agriculture Mike Johanns: "Now to have the beef checkoff program settled, we are back in business; we can continue to do the really great things that have occurred because of the checkoff program."

NCBA officials credit the checkoff with adding more than $200 per head to the value of cattle over the past seven years.

LMA officials claim they've always favored the promotion and research funded by the checkoff. But, they say cattle producers should be allowed to vote on whether they want to continue to support the program.

John McBride, Director of Information, LMA: "You have to remember the supporters of the beef checkoff for years, have said that they have 60% to 70% support among producers. All the time they are saying that they, according to the courts, illegally used checkoff dollars to keep people from signing petitions asking for a vote. All the time there you are talking about support, they blocked any attempt to get a vote on the program. Our position is you have 60% to 70% support for your program, a vote should be a slam dunk. They keep talking about polls, well there is a much better, more accurate poll out there and it's called a ballot box and that is why we want a vote."

The Supreme Court's decision means the beef checkoff will continue without interruption. And experts in agricultural law claim the ruling may revive cases where mandatory participation has been overturned in other courts including the Washington Apple checkoff, the Florida Citrus Box Tax, and the California grape checkoff.

For Market to Market, I'm John Nichols.

Tags: agriculture animals beef cattle livestock Mad Cow meat news U.S. Supreme Court