In June 2017, a U.S. District Court judge issued a temporary injunction on the allocation of Montana’s state beef checkoff funds. At a hearing on Monday before the Ninth Circuit Court of Appeals, Feedstuffs reports, advocates for independent ranchers faced off against lawyers for the Department of Agriculture in an effort to make the injunction permanent.
Typically, cattle producers must pay $1 per head of cattle sold into a federal checkoff fund, which is tasked with marketing, promoting, and researching the commodity. Fifty cents of each dollar are then redirected to the state where the producer lives, for local promotion, research, and marketing efforts. But the injunction last year means that now, producers must opt in to directing their funds towards the state checkoff, rather than having to opt out from funding the state program. As a result, Montana’s beef checkoff administrator, the Montana Beef Council, collected just $150,000 in checkoff funds in 2017. Typically, the MBC would manage about $800,000 each year.
The issue at the center of the debate is whether checkoff-funded marketing amounts to “government speech,” which ranchers are required to fund, or “private speech” that some ranchers can opt not to fund. USDA argued Monday that because USDA oversees and approves the promotions funded by checkoff dollars, it is government speech.
The Ranchers-Cattlemen Legal Action Fund, the group that won the injunction last year, argued that checkoff funds are used to benefit a particular group of ranchers over others—namely large-scale industrial producers over smaller independents. Ranchers that don’t benefit shouldn’t be required to participate, the group said. It also argued that taxpayers who fund government speech must be able to shape that speech through a democratic process, which does not exist for checkoff promotions.
The case is being closely watched by organizations working to fight mandatory checkoff collections in other states.