A three-judge panel of the 8th Circuit Court of Appeals in St. Paul, MN, upheld in mid-July a ruling by a South Dakota District Court judge that the mandatory beef checkoff violates the First Amendment of the U.S. Constitution. The checkoff programs will remain in operation with collections continuing pending the probable filing of an appeal by the U.S. Department of Justice (DOJ) on behalf of USDA.

The next step in the process would be for the full 8th Circuit to reconsider the decision.

As expected, opponents of the checkoff heralded the decision as a great victory. Meanwhile, checkoff proponents claimed they weren't overly surprised of the ruling and say they still feel the case will ultimately be decided in their favor by the U.S. Supreme Court.

USDA and the DOJ essentially reissued the press releases following the earlier South Dakota decision, regretting the decision and stating that they will look at their options, although they believe in the legality of their position.

The checkoff question will be ultimately answered by the courts' decision on whether the generic advertising that is funded by these programs is government speech or not. The sum of the courts' decision on these issues is clearly split. The difference is highlighted by the fact that the Federal District Court in Montana, using the same facts as the South Dakota case ruled in favor of the checkoff. The 9th Circuit Court of Appeals is currently considering the Montana case.

With obvious disagreement in the lower courts, and with questions raised by past Supreme Court decisions that have upheld some checkoffs while disallowing one, it's likely that the final disposition of this case lies with the U.S. Supreme Court.

The industry has yet to come up with a viable plan for promoting our product if the checkoff fails. If promotion moves away from promoting beef as a category and is no longer funded by the aggregate but by individual entities, the industry must deal with two realities:

  • The amount of money for promoting beef will be dramatically decreased,

  • and what money is spent will be geared to specific products and/or brands.

Both these conditions will serve to build on the disadvantage that small producers already face, and the net result will be to increase the amount of consolidation and concentration in the beef industry.

Troy Marshall is a weekly contributor to BEEF Cow-Calf Weekly, a free, electronic newsletter from BEEF magazine. To register for your free, weekly copy of BEEF Cow-Calf Weekly, delivered by e-mail to 30,000-plus readers every Friday afternoon, go to www.beef-mag.com and sign up.

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