For each dollar invested in the Beef Checkoff Program between 2006 and 2013 about $11.20 was returned to the beef industry, Dr. Harry Kaiser of Cornell University found in his recent study of the return on investment from the Beef Checkoff.
"The news for beef checkoff investors couldn't be better," said Kaiser, the Gellert Family professor of applied economics and management at Cornell and director of the Cornell Commodity Promotion Research Program, who shared the results of the study last week at the 2014 Cattle Industry Summer Conference.
"It is clear to me that activities funded through the Beef Board budget have a substantial impact on beef demand in the U.S. and in foreign markets. The return on producers' and importers investments into this program is vastly greater than the cost of the program."
The study was commissioned through the checkoff's Joint Evaluation Committee.
Some additional key findings in Kaiser's benefits-cost analysis include:
• Had there not been any CBB-funded marketing between 2006 and 2013, total domestic beef demand would have totaled 15.7 billion pounds – or 11.3 percent less than it was with the checkoff programs in place. Holding the effects of all other demand drivers constant, the activities funded by the CBB resulted in an increase in beef demand of 2.1 billion pounds per year.
• Had the national Beef Checkoff Program not invested in foreign-market development between 2006 and 2013, foreign demand for U.S. beef would have been 6.4 percent lower.
• The statistical results indicate that all eight CBB demand-enhancing activities -- generic beef advertising; channels marketing; industry information; new-product development; public relations; nutrition research; beef-safety research and product-enhancement research -- have a positive and statistically significant impact on increasing per capita beef demand.
• At the bottom line, the increase in beef demand due to CBB-funded marketing efforts resulted in higher prices for beef producers and importers, which means higher net revenue than they would have experienced without those checkoff programs.
Given the tremendous budget challenges of the checkoff in recent years, the Cattlemen's Beef Board commissioned the all-encompassing study to provide a more thorough evaluation possible of checkoff activities than it traditionally has.
As a result, this new study presents a more complete and accurate picture of checkoff returns and provides a new benchmark, the Checkoff says.
"Let me caution against trying to compare the results of this study with the 2009 study, which reported a return of $5.55 on each checkoff dollar," Dr. Kaiser said. "This time around, the Beef Board asked for a more comprehensive study than ever before, so I evaluated all commercial beef disappearance, including retail, foodservice, and international data over eight years, whereas the 2009 study looked solely at domestic retail data for a five-year period.
"Furthermore," Dr. Kaiser continued, "my study analyzed individual categories of nine marketing categories separately, and then brought the categories together to identify an overall beef checkoff return on investment. In 2009, the Beef Board commissioned a study analyzing only the checkoff as a whole."
Source: Beef Checkoff