Menu

Several court decisions within the past few months dealing with commodity marketing and promotion, typically referred to as check-off programs, have left questions in the minds of producers and commodity organizations about the future of commodity education, promotion and research efforts.

Mushroom advertising efforts, Washington apple promotion funding, conflicting decisions on the constitutionality of the national beef check-off and confusion with the national pork check-off are just a few examples of the disorder caused when programs are called into question, according to David White, OFBF director of commodity relations.

"Typically, these efforts are being challenged because a small minority is dissatisfied with one aspect of a check-off program. They don’t feel they are being represented," he said.

And confusion within the court system isn’t putting many minds at ease, especially after two federal courts – one in South Dakota and another in Montana – issued conflicting rulings on the constitutionality of the national beef check-off. And both courts used basically the same information to make their rulings, according to information from Elizabeth Harsh, executive director of the Ohio Cattlemen’s Association.

Ultimately, the U.S. Supreme Court will be asked to hear a check-off-related case, White said, and that decision could point the way for the rest of the nation’s producer-funded promotion efforts.

"Check-offs are state and national mandates put in place by various legislation enacted by Congress and state legislatures. Many have been in existence for 10 to 15 years or more," White said. "And challenges to the check-offs put the commodity organizations between a rock and a hard place."

Because check-off funds can only be used for specific things – typically promotion, education and research – the check-off programs cannot "defend themselves" in court, White said. So the commodity organizations end up using funds designated for other producer and commodity-related programs – not to mention staff time – to support check-offs within the court system.

OFBF and American Farm Bureau policies support check-off programs, provided they are producer-controlled.

For a check-off with an approval rating that’s never dipped below 60 percent, the beef check-off has experienced more than its fair share of battles recently.

"There are pockets of producers who differ with the national organization on policy issues," according to Harsh. "Especially those in states that border Canada and Mexico who have concerns over trade issues, marketing and promotion efforts. It’s frustrating because the check-off has nothing to do with policy, yet it’s being targeted."

And the Livestock Marketing Association, which has long been dissatisfied with the National Cattlemen’s Beef Association, has gotten into the picture by calling for a vote of producers, even though that organization’s membership is largely comprised of auction markets, not producers who pay the check-off, she said.

Both the South Dakota and Montana cases have been appealed. The South Dakota court ruled the beef check-off unconstitutional while the Montana court ruled the opposite. The South Dakota appeal hearing was heard in the St. Louis 8th circuit federal court while the Montana appeal is scheduled to be heard in a California 9th circuit federal court. The St. Louis decision is expected sometime this summer, Harsh said.

"The Supreme Court will hear one of these check-off cases; it just depends on which one gets there first," she said.

If the beef check-off is thrown out, Ohio would still have a check-off as a state program is in place. "So if the national check-off is ultimately ruled unconstitutional, Ohio would revert to the state program, but when you do that, you lose all the synergy and coordination of a state and national marketing plan," Harsh said.

When a vote of pork producers on the pork check-off was scheduled during the Clinton administration, then-Agriculture Secretary Dan Glickman failed to validate the signatures on petitions. So even though the required number of producers’ signatures wasn’t collected on petitions, the vote went ahead anyway – and it failed.

"There were a lot of people unhappy with the way the industry structure was changing," said Dick Isler, executive vice president of the Ohio Pork Producers Council.

And it didn’t help any that just prior to the vote, hog prices were near their lowest in history. "Hog production was historically the most profitable sector in agriculture, but the bottom dropped out several years ago," he said, adding that the negative check-off vote "was primarily a vote of economics and structure of the industry rather than a reflection of how the check-off was doing."

A challenge to the check-off in the Michigan courts was heard and appealed to the Cincinnati 6th circuit federal court. That decision is expected within the next several months, Isler said.

But that doesn’t mean pork promoters are waiting on the decision. "More than a year ago, NPPC (National Pork Producers Council) knew it needed a plan for the future (in case the pork check-off was thrown out)," he said. A national, voluntary Producer Consent Program was established that calls for producers to pay 10 cents for every $100 of sales to NPPC to fund legislative and policy programs, things the current mandatory program can’t fund. If the federal mandatory check-off is ruled unconstitutional, that voluntary check-off would jump to 45 cents per $100 of sales and would continue to fund promotion, education and research in addition to legislative and policy programs.

Of the voluntary check-off, 50 percent goes to NPPC and 50 percent is sent to the state commodity organization.

"Ohio has been a leader in the formation of the Producer Consent Program, which began last summer," Isler said. "Ohio has more producers signed up than any other state. Nearly half of the hogs marketed in Ohio are enrolled."

Isler said the future of commodity check-offs "definitely is in jeopardy. But we’re looking at things this way: We serve the people in the industry today who want to be in this industry in the future."

The question remains in White’s mind: "Who is going to promote our commodities? How and what will the source of funding be and how will we do research?"

If mandatory check-off programs are eliminated, "we’ll have to re-examine how to promote our products," White said.

One thing is for sure, White said. "Check-off programs have learned they need to do a better job communicating with producers about what they’re doing and how their work is benefiting producers and consumers."