Federal appeals court issues stay on beef checkoff injunction

Friday, July 12, 2002

A federal appeals court has issued a stay of a lower court's order that would have halted collections of the national beef checkoff program next week.

Depending upon whom you ask, that's either good news or bad news for Southeast Missouri farmers, who pay the $1 a head charge that generates $86 million each year for research and promotional campaigns.

"I think we need it," said Glen Birk, who has 125 head of cattle at his farm three miles west of Jackson, Mo. "It's been a reason we're doing as good as we have."

Birk said the checkoff has been integral in turning around the beef industry after 20 years of demand decline. He pointed to its research which has come up with convenience beef products and its promotional efforts, which came up with the famous tagline: Beef, it's what's for dinner.

But Jeff Preusser, an owner of the livestock auction in Fruitland, Mo., said he hears many cattlemen grumbling that they don't like the mandatory checkoff.

"They'd just as soon get every dollar they could," he said. "But it's mainly about forcing something on them. That's what they don't like more than anything."

The 8th U.S. Circuit Court of Appeals action on Wednesday means the checkoff program can continue its collections and activities while the appeals court further considers last month's ruling by U.S. District Judge Charles Kornmann of South Dakota.

In ruling the checkoff program unconstitutional, Kornmann on June 21 ordered the USDA to halt collections starting next Monday. Wednesday's stay nullifies that cutoff date and gives the Justice Department -- on the USDA's behalf -- and intervening cattlemen's groups more time to challenge Kornmann's finding that the program violated First Amendment rights of cattle producers.

On Monday, the government asked the 8th Circuit to grant the stay no later than Thursday, calling the deadline necessary to give it time to notify collectors whether they must comply with Kornmann's injunction.

The 8th Circuit did not immediately announce Wednesday when further hearings on the matter would take place.

In effect since 1985

Since 1985, livestock producers have had to pay a mandatory $1-per-head fee on cattle sold in the United States. Half of that money from the checkoff goes to the Cattlemen's Beef Promotion and Research Board and half to qualified state beef councils.

Those opposed to the checkoff are upset that the advertisements promote beef in general and not American beef. In his ruling last month, Kornmann sided with three South Dakota ranchers, the Livestock Marketing Association and others who sued the USDA, Agriculture Secretary Ann Veneman and the Cattlemen's Beef Promotion and Research Board, seeking to force a referendum on the checkoff program.

While Kornmann ruled that cattlemen should not be required to pay for commercials -- a form of speech -- that they are opposed to, the government argued that the nationwide injunction to halt collections was too broad.

The government also said cattle producers would suffer minimal harm if required to take part in the beef checkoff program while the appeal is ongoing.

In earlier cases, the U.S. Supreme Court has ruled that a similar checkoff program for mushrooms was unconstitutional because it touted mushrooms in general. Producers argued some mushrooms are superior to others.

Still, the high court has upheld a checkoff program for fruit trees.

In cheering Wednesday's stay, Cattlemen's Beef Promotion and Research Board chairman Dee Lacey said "it's definitely disappointing that industry resources continue to be diverted from beef marketing and promotion efforts to spend money and time in the courtroom instead."

"But this appeal is one more step forward in a lengthy battle," added Lacey, a cow-calf producer from Paso Robles, Calif..

Business editor Scott Moyers contributed to this report.

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