DENVER -- Retail-oriented programs like the Summer Grilling promotion and the "Beef. It's What's for Dinner" advertising campaign could emerge relatively unscathed -- even if the U.S. Supreme Court rules the mandatory fees levied on producers to pay for such initiatives are unconstitutional, according to officials with the National Cattlemen's Beef Association.
The trade group has been working with state beef associations to bolster a voluntary participation plan that would pay for such programs should the Supreme Court decision dismantle the mandatory federal fee structure.
"We believe that [the checkoff] will continue at a level appropriate to continue our promotional programs," Mark Thomas, the NCBA's vice president of consumer global marketing, told SN. "There has been a group of producers working diligently to be able to enact those state-based programs to the highest degree possible."
The stakes are high for the beef industry, which is in the midst of a boom cycle of record demand and high wholesale prices. Sales outlets like supermarkets have likewise enjoyed the benefits of recent consumer trends, which the NCBA claims have been positively influenced as a direct result of checkoff marketing campaigns.
"We believe the checkoff is constitutional," Thomas said. "There are 30-plus attorneys general who filed a petition with the court in support of the checkoff, as well as numerous state and national associations who support it."
The case pending before the Supreme Court is an appeal of an 8th Circuit Appellate Court ruling that found the $1-per-head beef checkoff program unconstitutional. A panel of justices ruled the mandatory fees violate the First Amendment, agreeing with a group of producers who argued the checkoff program violated their rights of free speech because they did not concur with the marketing campaigns. The legal challenge to the checkoff's constitutionality was brought by the Livestock Marketing Association, the Western Organization of Resource Councils and individual producers.
The marketing and research fees in this instance are sanctioned by the U.S. Department of Agriculture. The agency created the checkoff program as part of the 1986 Farm Bill, which included a provision creating these types of commodity marketing programs. Independent research cited by NCBA shows that nearly 70% of producers support the program.
"On the short term, between now and when the Supreme Court issues its decision [in 2005], there will be no interruption whatsoever," Thomas said.
Thomas said the NCBA is confident the merits of the checkoff will prevail, though past decisions by the Supreme Court regarding similar programs have been mixed. The Court sided with such programs in the 1997 case of California peach growers, but against them in a similar case involving mushroom growers. In 2001, the justices ruled that use of assessments for advertising purposes was unconstitutional. As a result, the Mushroom Council's budget was reduced by 60%, and its role largely confined to research and development (see "W(h)ither Commodity Boards?" SN, July 14, 2003).
"A favorable decision by the court will certainly send a signal that checkoffs are considered constitutional," Thomas said of the implications of a decision on other checkoff programs. "While it's not legally precedent-setting, I think it would have an impact on other programs that might face a similar challenge down the road."