Livestock Marketing Association's Lawsuit Against the Beef Checkoff

In an Aug. 6 letter to Pat Goggins, president of the Livestock Marketing Association (LMA), NCBA President Lynn Cornwell asked that the LMA litigation challenging the constitutionality of the beef checkoff be dropped. Cornwell sent the letter on behalf of the NCBA Executive Committee. Goggins on Aug. 8 responded, declining to drop the lawsuit.

In the letter Goggins stated -- as he has done publicly -- that “LMA, USDA and the CBB agreed that the constitutional issue raised by the Supreme Court’s mushroom decision had to be resolved before proceeding with LMA’s request for a referendum.” The facts don't support that statement.

Following the Supreme Court decision on the mushroom checkoff -- a totally separate program -- Judge Kornmann asked USDA to state their position on the beef checkoff. USDA declared their belief that the Beef Promotion and Research Act is constitutional, and that it would vigorously defend the program’s constitutionality.

Furthermore, the chain of events shows that LMA unilaterally made the decision to amend its legal complaint. That left the CBB and USDA no choice but to agree to resolve the constitutionality issue first, so that the industry may turn its focus back to the business of building beef demand. LMA had the option of supporting the existence of the beef checkoff program, while pursuing its original case. Their choice to amend the suit, however, left the CBB and USDA no choice in its response.

The suit is no longer about a vote -- a claim that LMA has all but abandoned. The actions the organization is taking are jeopardizing the futures of not just the national beef checkoff, but all state and national checkoff programs conducted by producers.

The Aug. 8 letter from Goggins also states that “The only objection which your organization has ever posed to a referendum is that it would be costly...” Wrong. The NCBA objection is that this effort takes valuable industry resources away from where they should be focused -- on increasing consumer demand for beef, which has been trending upward for the past three years. In fact, according to the beef demand index, demand for second quarter 2001 is up 5 percent over second quarter 2000. This remarkable achievement was done in the face of a slowing national economy, rampant media coverage of the foreign animal diseases BSE and FMD, and near-record meat and poultry production.

NCBA is NOT against a producer’s right to call for a vote. Its members were the ones who requested the provision in the original Act specifying the criteria for holding a vote. Based on an independent firm's analysis, LMA failed in its attempt to meet that criterion.

On the subject of cost, it's appropriate to use as a benchmark the recent pork referendum. Prior to the vote, an AMS representative told the Pork Board that the cost could be anywhere between $550,000 and $800,000, not counting Farm Service Agency employee costs. The pork industry is one-tenth the size of the beef industry and is more geographically concentrated. Based on this, the cost to the beef industry could easily equate to the Beef Board’s international marketing budget for two years.

It is also untrue that the NCBA opened the constitutionality issue. Since 1988 we have vigorously defended the constitutionality of the checkoff when it was attacked, and will do so again in this instance. By joining with those who wish to do away with the checkoff, the LMA has very clearly chosen its position on the $1-per-head beef checkoff and its efforts to increase beef demand.

LMA has been invited to numerous Beef Board Executive Committee meetings, as well as many NCBA events and meetings. In a letter following the LMA's failure to secure sufficient producer signatures, then-NCBA president George Hall invited LMA to sit down to discuss how we might move the industry forward. No meetings have taken place, despite suggestions to the contrary in the LMA letter. But it is LMA, not NCBA, who has declined to be part of a collective solution to any ongoing misunderstandings.

In a July 2001 independent survey, 72 percent of producers said they support the checkoff. Rather than being strong-armed into an exercise in duplication, it's NCBA's position that it's better to spend producer dollars to continue the upward trend in demand. Furthermore, that same survey showed that 93 percent of producers felt it was important to be informed about how their checkoff dollars are being invested and what the results of those investments are. Therefore, NCBA will support continuation of producer communications programs.

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Producer-directed and consumer-focused, the National Cattlemen's Beef Association is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.