Iowa Public Television


Beef Checkoff Ruled Unconstitutional

posted on July 12, 2002

A group of three cattle feeders is pressing suit against four of the nation's largest beef packers. The cattlemen contend the packers manipulated prices at a cost of millions to cattle producers.

The complaint arises from a period of time when the USDA was attempting to implement new price reporting practices. In late May of 2001, USDA discovered prices reported for boxed beef included lower grade products, which cheapened the publicly reported price and lowered cash cattle prices.

The plaintiffs say the packers knew the reported prices of boxed beef were incorrect and pocketed an extra 40-million dollars during that period of time. The cattlemen are seeking a class action status for their suit and restitution for all class members.

While litigation on that complaint is just underway, another legal initiative involving the beef industry is making steady progress through the judicial process. The impact of the outcome could ripple far beyond the ranch or feed yard.

Beef Checkoff Ruled Unconstitutional Implemented by Congress in the 1985 farm bill, the beef check-off was made permanent in 1989 by a national referendum with the approval of 79 percent of the producers who voted. The check-off, a dollar for each head marketed, generates 86 million dollars a year. Half goes to the beef promotion fund, the other half to qualified state beef councils.

But a South Dakota Federal judge has agreed with plaintiffs who argued the check-off is a violation of their first amendment rights because they were forced to pay for a message with which they didn't agree.

The plaintiffs insist the campaigns promote beef in general, not American beef. Moreover, the cattlemen, the Livestock Marketing Institute, The Western Organization of Resource Councils and others who pressed the suit contend the mandatory fees benefit retailers, restaurants and packers as much, if not more, but the fees, were imposed on only cattle producers.

The judge's decision heartens dissidents of other commodity groups like those who have protested the pork check-off for the past several years. It's expected the beef case will reach the Supreme Court and ultimately determine the constitutionality of check-offs for many commodities.

Tags: agriculture beef cattle courts meat news