Ranching Couple Embroiled in Beef With National Livestock Group

Bothered by how a national livestock group was spending some of the money raised from a fee on cattle they sold, Steve and Jeanne Charter simply stopped paying it.

They say they were trying to make a point--and never believed their small protest might one day threaten their livelihood.

Three years after the eastern Montana ranchers first refused to pay the mandatory $1 beef “checkoff” on 247 cattle, they face $12,000 in civil penalties and an expensive ongoing legal battle. They’re among a handful of ranchers involved in civil lawsuits filed by the government for refusing to pay the fee.

“It’s wrong for people to treat us like common criminals,” Jeanne Charter said at her ranch home near the small town of Shepherd, north of Billings. “It’s just our own economic self-interest as independent producers we’re trying to protect.”

Those who support the fee, however, say producers like the Charters are benefiting from the checkoff without paying their fair share.

“I’m sure you can find people that are sympathetic to [the Charters], but I think you’ll find a lot of people that aren’t,” said Larry Switzer, a rancher near Richey.

“They are trying to destroy the checkoff because they don’t support the policy,” he added. “I think they’re taking an erroneous track in reaching their ultimate goal.”

The Charters and others who have refused to pay say the National Cattlemen’s Beef Assn. uses the money to champion its own agenda--one that favors large meatpackers and producers over family ranchers.

But the Cattlemen’s Beef Promotion and Research Board, which collects part of the federally mandated fee, says everybody must pay. No exceptions.

“Everybody pays because everybody benefits in the long run. There’s no free ride,” said Steve Barratt, director of collections and compliance for the board.

When Congress passed the Beef Promotion Act and Order in 1985, it contained a refund provision for those who didn’t want to pay, but producers did away with that three years later in a national vote.

One of the most recognizable efforts the checkoff has funded is the “Beef. It’s What’s for Dinner” advertising campaign. Funds also are used for research into food safety and raising better, healthier cattle.

State beef councils keep 50 cents for every dollar of the fees. The promotion and research board gets the rest, and most of that share goes to the National Cattlemen’s Beef Assn.

The checkoff generated about $88 million in the last fiscal year, Barratt said.

Besides the handful of producers involved in lawsuits, about 100 who have refused to pay are in negotiations in an effort to avoid court, Barratt said. That’s out of more than 1 million dairy and beef producers nationwide.

Some producers suspect they have been singled out because of their vocal opposition to the checkoff and their disdain for the cattlemen’s association.

“They’ll get me, make an example of me and frighten everybody else. They want to buy our silence,” said Wallace McRae, a prominent eastern Montana rancher who is facing legal action for failure to pay.

In addition to refusing to pay the fee on the 247 cattle they sold, the Charters later refused to turn over fees from three other cattle. Since then they have resumed paying the fee but still believe it is wrong.

They are challenging the checkoff’s constitutionality in federal court, arguing that it violates their right to free association and free speech as independent producers.

“The first two steps we took on principle. We thought somebody had to call them on this,” Jeanne Charter said. “This time we’re betting they’re going to lose. We took them to court because we think we’ll win.”

Those who don’t comply can face a civil penalty up to $5,500 per transaction. Administrative law judges have interpreted that to mean each animal. In addition, they can be ordered to pay checkoff dollars owed, plus interest.

McRae said the U.S. Department of Agriculture claims it could seek $4.5 million to $5 million from him, even though the cattle it says he owns are actually the property of his family’s corporation. He said the USDA offered him a deal--a $10,000 fine, plus due checkoff dollars and interest. He hired an attorney and is awaiting a hearing.

In their legal challenge, the Charters point to a case involving a mushroom checkoff that the U.S. Supreme Court has agreed to decide. The U.S. 6th Circuit Court of Appeals ruled the tax violated the Constitution’s 1st Amendment. Mushrooms are not regulated by USDA, and growers cannot be forced to pay for generic advertising, that court said. The Supreme Court is reviewing the decision.

The Charters’ attorney, Kelly Varnes, said if the Supreme Court upholds the appellate court ruling, it could force USDA to review all its checkoff programs. A USDA spokeswoman declined to comment on the Charters and other pending cases.

USDA last year received petitions carrying the signatures of 126,000 producers urging a nationwide vote on whether the checkoff should continue. The agency recently asked an outside firm to validate those by mid-January.

Those who favor the checkoff fee say they’re confident it would survive a vote by producers. Surveys of ranchers for the Cattlemen’s Beef Board over the last six years show that support for the checkoff has not fallen below 60%, Barratt said.

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Cattlemen’s Beef Promotion and Research Board: https://www.beefboard.org

Livestock Marketing Assn.:

https://www.lmaweb.com