The USDA’s Agricultural Market Service announced it will be approving the $3 million annual payment by the National Pork Board to the National Pork Producers Council for the purchasing of “Pork, the Other White Meat” trademark.
As a result of the Humane Society of the United States lawsuit challenging the USDA’s approval of the purchase agreement and annual payments, AMS reviewed the value of four trademarks.
In 2015, the plaintiffs filed an appeal with the Appellate Court in Washington, D.C. A federal judge reinstated the lawsuit and sent it back to the lower courts, ordering an investigation into the transaction.
As part of that review process, the NPB was directed to utilize checkoff funds to contract an independent valuation of the current value of the trademarks. Stout Risius Ross found the value of the trademarks exceeds the value of the original purchase price, triggering the AMS to approve the continuing payments under the original agreement.
Stout Risius Ross completed the appraisal and concluded that, “as of Jan. 1, 2016, the investment value of the four trademarks is between $113 million and $132 million using the cost approach, one of several acceptable and recognized approaches for determining valuation.”
The NPPC also submitted valuation reports. The independent firmed hired by the NPPC valued the trademarks at $175 million as of Dec. 31, 2015.
Late last year, the pork industry learned the USDA entered into negotiation with the HSUS. Immediately, the NPPC officially filed to intervene but the organization was denied the right to get involved because of other stipulations between USDA and HSUS.
In two separate annual meetings at the Pork Industry Form, voting delegates of the NPPC and the NPB, presented a resolution and advisement, petitioning the USDA secretary to “mount a strong and vigorous defense.”
In the same AMS announcement, the USDA’s General Counsel says it has sent a letter to the NPB Chief Operating Officer regarding the NPB Delegate Body’s advisement urging the Secretary to mount a vigorous defense in the case. According to the USDA’s General Counsel, the NPB advisement and the letter forwarding was in “violation of the Pork Promotion, Research, and Consumer Information Order and AMS Guidelines forbidding AMS Research and Promotion Boards from using mandatory assessment funds to engage in lobbying for governmental action, and was in direct contradiction to counsel provided by AMS during the Delegate Body meeting.”
In addition, the General Counsel directed that within 30 days, the Board must account for and reimburse all pork checkoff funds related to the Delegate Body action, and suggested that the COO, Board officers and any other critical staff attend a remedial training on the proper use of pork checkoff funds.