Agriculture Department officials say a test confirmed Tuesday that the 1,300 pound steer had been given a prohibited anti-inflammatory drug called Banamine.
Agriculture Director Chuck Hartke declined to overturn a decision by an administrative law judge to disqualify the animal.
The steer was shown by 14-year-old Whitney Gray of Gilman. Her family argues they told a fair official about the drug and were given the impression that it was ok, but Hartke said "the rules are the rules.''
The junior champion steer is auctioned at the Sale of Champions scheduled for this evening.
Department spokesman Jeff Squibb says it's the first time in livestock competition at the fair that a champion was disqualified for illegal drug use.
Squibb says the runner-up steer cleared the drug test.