Iowa Public Television

 

Busy Week for Courts

posted on June 29, 2001


The government also played heavily in news from other fronts. On the Southern Plains the EPA is hard on a case involving a large pork producer. In California farmers are reacting to recent EPA mandates on gasoline. On the East Coast a court ruling is leading to a merger of giant meat processors that has been on and off. And from the Supreme Court, issued in the shadow of the Microsoft ruling, a victory for opponents of commodity checkoffs used for promotion.

 

A Supreme Court decision this week said mandatory product advertising, paid from the mushroom commodity check-off program, violates the First Amendment right of free speech.

The court said the compulsory fees amounted to unconstitutional forced speech. In it's case before the court, mushroom producer, United Foods Incorporated, said the mandatory promotional campaign forced the company to pay for ads that benefited its competitors.

In a different court case --Tyson foods was forced by a Delaware judge to complete a merger it tried to back out of in March. So this week, Tyson agreed to acquire IBP for $2.7 (B) billion dollars in cash and stock. The price is 16% less than the previous bid.

The combined company will have 28% of the beef market, 25% of the chicken market, and 18% of the pork market.

A new market is just what some California farmers hope to gain with a Bush Administration order to use environmentally safe gasoline additives to reduce air pollution. Rice farmers want a piece of the Midwest corn farmers ethanol market. A handful of rice farmers plan to build an ethanol plant that would use straw stalks, left over after the rice harvest.

A byproduct of a different sort isn't receiving such positive attention. Oklahoma's largest hog producer -- Seaboard Farms -- is under a federal order to repair leaks in its manure lagoons. The lagoons are suspected of contaminating wells in two counties. The company has 24 hours to tell the EPA its intentions on compliance of the latest order.

Giant pork processor Smithfield Foods has announced it will dedicate more funds to marketing its own products. Smithfield currently sells about 65 percent of its products directly to restaurants, grocery stores and sports stadia. The new strategy, say company officials, is to spend more money and develop Smithfield into a dominant consumer brand.

The decision is independent of the Supreme Court's ruling on mandatory checkoffs. But it's worth noting Smithfield, which markets millions of hogs a year, is one of the largest sources of revenue for the pork checkoff that finances the highly visible "other white meat" campaign.


Tags: chickens courts ethanol mushrooms news