Angus e-List Vol. 2, 32

DENVER (June 21, 2002) - In a strike against the American beef industry, a U.S. District Court judge in South Dakota today ruled the Beef Promotion and Research Act is unconstitutional and ordered a halt to checkoff collections starting July 15.

Ag. Secretary Ann Veneman
Regarding Beef Checkoff Challenge

"I am disappointed by the ruling of the U.S. District Court in South Dakota that the Beef Promotion and Research Act is unconstitutional. The U.S.Department of Agriculture regards such programs, when properly administered, as effective tools for market enhancement.

"The beef promotion program in particular has helped beef demand to increase and has contributed to increased U.S. beef exports. These results have led to support for the program by a majority of beef producers.

"We are consulting with the Department of Justice to determine next steps."

"We believe this ruling is only a temporary setback for American beef producers," said Wythe Willey, president of the National Cattlemen's Beef Association and a beef producer from Cedar Rapids, Iowa. Willey said NCBA is confident the case will be overturned on appeal and the judge's ruling stayed so that the checkoff can continue while the case advances to the next court level.

"We will continue the business of promoting beef while this process takes place, with minimal distraction," Willey said. "We believe the checkoff, the 'Beef. It's What's For Dinner.®' promotions and other similar programs designed to build demand have returned significant dividends to producers over the years. We will follow the law, of course, but believe the judge has misinterpreted it. Fortunately, the beef industry has an extremely strong case, and we believe we will prevail in higher court. The checkoff has been and will continue to be an effective way for producers to invest in their future."

The challenge to the beef checkoff's constitutionality was raised by the Livestock Marketing Association (LMA), the Western Organization of Resource Councils (WORC) and several individual producers in an earlier petition. Defendants in the case are the U.S. Department of Agriculture, the Cattlemen's Beef Promotion and Research Board, which administers the checkoff, and Nebraska Cattlemen, Inc., which is leading a group of supportive producers to intervene on behalf of the checkoff.

"This ruling reverses the will of Congress," said J.D. Alexander, immediate-past president of Nebraska Cattlemen and a feedlot operator from Pilger, Neb. "It's an attempt to stop an entire industry in its tracks and takes away the empowerment of nearly a million beef producers."

"In 16 years of producer attitude surveys by three different companies independent of the industry, support for the checkoff has always remained above 60 percent," Alexander said. "The most recent survey showed a more than two-thirds approval rating. And in pushing its earlier petition for a new vote on the checkoff, LMA failed to gain the 10 percent of beef producer signatures required. It's frustrating that when LMA and WORC couldn't get what they wanted through a democratic referendum process, they chose to just take it to the courtroom."

By taking the beef checkoff to court, LMA and WORC have demonstrated a disregard for the future of U.S. agriculture, said Alexander. "It's ironic that they are taking this action at the same time Canada is working to get its own checkoff program, which opens the door to increased competition in export markets.

"Foreign marketers are increasing efforts to promote their beef in the U.S. and our competitive position will be weakened if we lose the checkoff," Alexander said. "So, LMA and WORC are opening the door for importers to promote their own brands in the U.S. -- and they are doing it with contributions to WORC from activist and environmentalist organizations that are working to put U.S. beef producers out of business."

Ralph "Shorty" Jones, a beef producer from Midland, S.D., and an intervener in the lawsuit, said the beef industry is "deeply disappointed" by the judge's decision. "However, the industry remains confident in the constitutionality of the checkoff."

"The U.S. Department of Agriculture and Department of Justice have promised to vigorously defend the beef checkoff," said Willey. "We expect the Department of Justice to immediately initiate appeal procedures. The checkoff and its programs will continue while a request for stay is considered."

Willey noted that since Congress launched the $1-per-head beef checkoff in 1986, all previous constitutional challenges to it have been defeated. He said that in 15 years the administration of the program has not changed. It has always been producer directed with USDA oversight.