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By Lana Robinson
Field Editor
The Supreme Court’s ruling, May 23, upholding the Beef Promotion and Research Act of 1985 comes as very good news to the state’s largest general farm and ranch organization.
“Cattle producers across Texas are extremely pleased with this ruling that keeps the beef checkoff program operating,” said Texas Farm Bureau President Kenneth Dierschke. “A self-help program such as the beef checkoff is vitally important to the industry. So are other commodity checkoff programs which benefit from producer dollars.”
Texas Beef Council Chairman Dan Dierschke of Austin, a beef producer who also serves as Texas Farm Bureau’s District 8 state director, agreed.
“Texas beef producers applaud this positive decision by the nation’s highest court,” said Dan Dierschke, speaking on behalf of TBC’s 20-member board of directors. “Texas is the No. 1 state in beef production, and this ruling is welcome news for our state’s industry and economy.”
By a 6-3 vote (Justices John Paul Stevens, Anthony Kennedy and David Souter dissented), the U.S. Supreme Court’s ruling, written by Justice Antonin Scalia, overturns lower court decisions by the U.S. Court of Appeals for the 9th Circuit and the U.S. District Court for Montana, which ruled the program unconstitutional. In a split decision, the high court said the generic advertising at issue is the government’s own speech and, therefore, exempt from the First Amendment free-speech challenge that had been brought.
The Beef Checkoff Program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval. The checkoff assessment became mandatory when the program was approved by 79 percent of producers in a 1988 national referendum vote. Checkoff revenues may be used for promotion, education and research programs to improve the marketing climate for beef.
“It was just a tremendous win for the beef producers of Texas,” said TBC Chairman Dierschke. “We in Texas collect about $12 million per year from producers as they sell their animals. Of the $12 million, about $9 million goes toward the national effort to promote beef and $3 million remains in the state of Texas, where we attempt to increase beef demand among the citizens of Texas.”
As a result of the decision, the Beef Checkoff Program will continue without interruption. One successful campaign derived from the checkoff is the highly recognizable “Beef: It’s What’s for Dinner” campaign.
“Looking back since 1998, beef’s demand index has gone up 25 percent. In the last year alone, it’s gone up 8 percent. Largely this is the result of people working collectively, pooling their resources to increase education, research and promotion of our product, and because it is our product, and our funding of it, it’s the perfect illustration of the American ideal,” Dierschke added.
The TBC chairman said a look at the beef demand index chart validates the effectiveness of the beef checkoff.
“The beef demand index was going downhill, it was just a slide downward for many, many years. After the checkoff was instituted, the demand slide was halted, and after an action plan was established in 1998, it’s just been this upward movement of 25 percent in beef demand. I think looking at it statistically and historically, we can see that it’s just been tremendous,” he said.
Dierschke noted that CattleFax, an organization that tracks cattle prices, observed that approximately $250 has been added to the value of every animal coming out of the feedlot, and $200 to the price of a 500-pound steer, as a result of the promotional efforts that producers have paid for from their checkoff funds.
“Perhaps the most singular advance made due to checkoff-funded programs is the research. People were being told that it was not healthy to eat beef,” Dierschke recalled. “Today, we have demonstrated that lean cuts of beef are every bit as fat conscious as chicken, and at the same time has more nutrients.”
The ruling in the beef case could affect similar cases pending before the Supreme Court on the pork checkoff program known for “Pork: The Other White Meat” campaign; the “Got Milk?” dairy advertisements with milk mustaches on celebrity faces; and a state-run program promoting alligator products.
Critics argued the programs fund activities that favor large corporate producers and violated free-speech rights of individual farmers who do not want to participate and who have to pay for advertisements with which they disagree. Livestock Marketing Association President Randy Patterson, a plaintiff in the lawsuit along with WORC (Western Organization of Resource Councils), issued this statement upon hearing the court’s decision upholding the constitutionality of the mandatory beef checkoff:
“We are deeply disappointed in the Court’s decision. Given the two strong decisions supporting our position, from the federal district court and the court of appeals, we had high hopes the Supreme Court would have decided otherwise. However, we respect the legal system and the Court’s deliberations in this case, and we reluctantly accept their decision and will move on from here...Given the Court’s acceptance of the government speech argument, we expect greater supervision by the government of the checkoff, and a greater effort by USDA to address the concerns of producers and marketers that led to our initial referendum campaign, and our constitutional challenge.”
LMA favors periodic referendums on checkoff programs.
Dierschke said TBC’s board of directors, made entirely of Texas beef producers appointed by Texas’ nine cattle and beef organizations, will continue to move forward with promotion, education and research programs. These programs will supplement national efforts to build beef demand in domestic and international markets.
Texas is the nation’s largest beef cattle producing state. Nationally, producer support for the Beef Check-off Program is at a 10-year high. Seventy-three percent of beef producers voiced their approval of the program in a January 2005 survey. That approval number is up from 70 percent in July 2004.
