It has been nearly a year since the lawsuit against the USDA and the Montana Beef Council (MBC) went into effect. I have been deeply intrigued by watching the development of this story and wanted to give an update now that Montana has gone through its first major cycle with this lawsuit lingering over its checkoff program.
Here’s a little background, which many readers will probably be familiar with. The federal $1-per-head checkoff was implemented in the 1985 Farm Bill with 50 cents of that dollar remaining under the state’s control and the other 50 cents being forwarded onto the national arm, the Cattlemen’s Beef Board. Many state beef councils were set up long before 1985. In fact, the MBC was created in 1954 to “protect and increase demand for beef and beef products through state, national, and international consumer marketing programs including promotion, education and research, thereby enhancing opportunities for Montana beef producers,” according to an April 10, 2018 MBC press release.
On June 21, 2017, the U.S. District Court of Montana granted a preliminary injunction restricting the MBC from using federal checkoff dollars for advertising, unless a producer has provided consent. This lawsuit, brought by R-CALF, accuses the MBC of violating the First Amendment, in particular by not differentiating Montana-raised beef from foreign beef in their advertising campaigns. The U.S. Court of Appeals for the Ninth Circuit upheld the lower court’s ruling on April 9, 2018.
Throughout the past year, there has been an effort to distribute consent forms across Montana that would allow the 50 cents to remain in-state. This lawsuit resulted in a major financial strain to the MBC, which had to dip into its reserve accounts in order to function this past year, not to mention the additional administrative costs. In my opinion this did not result in the best use of resources that could have been used for promotion. Many ranchers in Montana have told me they are disappointed in the fact that the lawsuit resulted in a loss of local control of a portion of their dollar.
The April 10 MBC press release shared some results from the first year of reduced funding. Last October, prior to the large fall run of calves that were marketed in Montana, the MBC board outlined a budget that allocated $860,000 to use for promotion, education, consumer information, industry information, foreign marketing, and producer communications in FY 2018. According to Jim Taber, MBC president, following their January board meeting, “We had just over $150,000 of consented producer dollars to work with…”. This is a huge difference and is going to have the MBC hobbled to do any significant promotion in the future.
I have worked for a state cattlemen’s association and had the opportunity to work closely with the staff of that beef council. I have seen firsthand the benefits and good that is accomplished with this small investment. Most of these state beef councils have a dedicated board of directors and staff who are masters at making the best use of the funds they are entrusted to oversee, and I have been impressed with their efforts without other sources of funding.
I believe we should be having discussions to increase these checkoff dollars; not cut them down. For example, in Australia, producers have a levy of $5 per head to invest in their product. A quick google search shows that if we were to keep up with inflation from 1985, we should be investing $2.34 in 2018. At a recent branding, a local rancher made a great point. To paraphrase, he told me that we as commercial producers take advertising for granted; commercial ranchers get to benefit from a very cheap advertising budget through their checkoff dollars and if they were required to have an advertising budget like seedstock producers have, they would realize that this is a good investment.
The Montana lawsuit has also provided the framework and precedent for other states to be targeted. For example, Utah recently had their checkoff collections threatened with a lawsuit and I am sure that there are many other states under the radar. I would encourage the critics of this program to get involved and attend a board meeting of their state beef council. Perhaps find a board member and see what they are trying to do to improve beef demand. These programs are important to our future and it’s going to take a larger war chest heading into the future. — Devin Murnin
