Most ag commodities have a checkoff program for public promotion, whether it is grain, crops or meat. They are all tightly regulated by the U.S. Department of Agriculture (USDA). The checkoffs are producer funded for marketing and research of a certain product. It is a fair tool for producers to use as everyone raising the product pays into it.
At times, producers wonder if their checkoff programs are actually supporting their product, but after looking over the numbers, checkoffs have proved to be worth the dollars invested.
It has long been proven if a person is selling a product, promoting an association or any other cause, they have to market it. They have to get their name out and make sure the public gets the quality they are looking for. Whoever pays for marketing gets a fair return in demand for the product.
The largest checkoff in our region is most likely the Beef Checkoff. This checkoff is funded by all who raise and sell cattle.
According to the Wyoming Beef Council, “The funds are used for marketing and research programs designed to increase domestic and international demand for beef. This can be done through promotion, research and new product development and a variety of other marketing tools.”
As mandated by the Beef Promotion and Research Act, checkoff funds must be invested in programs to increase consumer demand for beef and to create opportunities to enhance producer profitability.
Every time a cow is sold, one dollar is paid to the checkoff by the seller. Up to 50 cents may stay in the state under the state beef council and the rest is under the authority of the Cattlemen’s Beef Board.
This past spring, the Beef Checkoff commissioned an independent economic analysis to assess the effectiveness and additional financial benefits produced by the program’s demand-driving activities. It was conducted by Dr. Harry M. Kaiser of Cornell University.
The analysis reports in the five-year period from 2019-23, for every dollar invested in the Beef Checkoff’s demand-driven activities, producers and beef importers who pay into the program received a $13.41 benefit.
In addition to calculating a return on investment of $13.41, the analysis enabled the study to simulate market conditions for beef demand in the absence a national Beef Checkoff.
In this study for the five-year period, had there not been any investments in national Beef Checkoff demand-driving activities, total domestic beef demand would have been 2.4 billion pounds or 8.5 percent lower per year than actual results.
The steer price would have been 7.8 percent lower per year than actual results. U.S. export beef demand would have been 372 million pounds or 11.5 percent lower than actual results in the seven major importing countries included in the study.
The study also concluded the national Beef Checkoff helped U.S. employment income by $2 billion and helped the gross domestic product by nearly $49.5 billion. Across the nation, the checkoff brought in $34 million in county tax revenue, $205 million in state tax revenue and $504 million in federal tax revenue.
Based on this analysis, I believe the national Beef Checkoff has positive impacts, most likely more than people realize.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available online and in print. He can be reached at: Dennis@wylr.net
