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Checkoff Suit Fizzles; Trends Are Concerning

Checkoff Suit Fizzles; Trends Are Concerning

The conventional wisdom was that resolution of the lawsuit against the national beef checkoff filed by Mike Callicrate, the Organization for Competitive Markets (OCM), and Humane Society of the U.S. (HSUS) would take years, and cost the industry considerably in time and capital. Strangely, however, the Polsinelli Shugart law firm asked the judge to withdraw its attorneys from the lawsuit, citing a “previously unknown conflict” related to "another client’s pre-existing discussions” with USDA. USDA, of course, oversees the checkoff program.

Callicrate has objected to the attorney’s request, which must be sorely disappointing to him, as the law firm was acting pro bono, in what was believed to be a favor to HSUS. Callicrate’s court filing objecting to the filing says that his loss of counsel makes it impossible for him to continue the case.

Logistically, of course, this could threaten the case, as neither OCM nor Callicrate ever likely intended to use their own resources to bring this case forward. The litigation had already been stayed by a federal judge pending the release of USDA’s Office of the Inspector General’s audit.

Conspiracy theorists already are advancing the theory that the law firm bowed to pressure from some giant multinational corporation, which was also a client. But given the law firm's close ties to HSUS and historical litigation successes, it seems unlikely that any firm involved in mainstream agriculture would employ this firm.

Another Perspective: OCM, HSUS Partnership Makes For Strange Bedfellows

Meanwhile, others speculate the move is related to HSUS’s involvement in the pork checkoff. I think it's doubtful that HSUS has changed its assessment that attacking the checkoff programs is a great way to harm the industries. Rather it may be that the organization just ascribes to the domino effect, and feels that the pork industry and its checkoff is a far easier target in the public-perception arena than the cattle industry.

It's doubtful Callicrate really wants to force the firm to represent him. After all, coercion usually isn't a very effective team-building strategy. More likely, I think it's a plea for another anti-industry aligned law firm to stand up and take on the lawsuit on behalf of Callicrate. And it's hard to believe that OCM, which has been staunch in its support of HSUS, won't do its part to ensure that HSUS steps forward to keep the lawsuit moving.

In a related note, there continues to be widespread recognition within the beef industry that the impact of the $1/head checkoff is being eroded, both as a result of herd liquidation (lower numbers) and inflation. There is also the growing realization that more dollars are needed to continue to successfully build beef demand.

However, the politicization of the checkoff seems to be an irreversible trend, and it's a trend that's certainly not in the best interest of the industry. As a result, any discussion about increasing the checkoff assessment for the first time in 25 years appears to be unready to move beyond the discussion phase.

While the lack of checkoff funds is leaving many worthwhile projects unaddressed, virtually everyone acknowledges the tremendous and growing success of the program. There is also, however, the realization that the Act & Order that created the checkoff program was flawed in its creation, and can't prevent the destructive politicization that's occurred.

A Closer Look: Beef Checkoff Preparing For New Realities

As a result, there is movement building for individual states to push for increases in their state checkoff programs; theoretically, the states then could send the money to the national organization for support of certain programs. Most importantly, however, the states would then maintain control in how that money is spent. Hopefully, that could avoid the potential of a politically motivated activist minority hijacking the process and/or jeopardizing the support of the checkoff.

Nobody wants to throw the baby out with the bathwater, and a move to a more state-centered checkoff may prevent this from happening. The recent flaws in the USDA appointment process make it clear that while extra funds would continue to benefit the industry, those funds must be spent by individuals singularly focused on raising beef demand.

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