New Return On Investment Study Measures Impact of Cattlemen's Beef Board Activities on Beef DemandMon, 05 Aug 2019 11:36:57 CDT
The combined benefit of all Cattlemen’s Beef Board (CBB) programs is 11.91 times more valuable than their costs. That is one major finding from a recent third-party, return-on-investment (ROI) study commissioned by the national Beef Checkoff program and conducted by Dr. Harry M. Kaiser of Cornell University. You can listen to Dr. Kaiser explain the findings of this ROI study himself, by clicking here to hear Radio Oklahoma Ag Network Farm Director Ron Hays' full discussion with him.
Completed in June 2019, the study is based upon an econometric model which quantifies the relationship between the CBB’s various marketing activities and domestic and international demand for U.S. beef. It also compared the costs and benefits of those activities relative to producer and importer investments in the national portion of the Beef Checkoff program.* Under existing agricultural legislation, the CBB is required to have an independent analysis of the program’s economic effectiveness conducted at least once every five years.
“We’re extremely pleased with the results of this latest ROI study,” said Chuck Coffey, a cow/calf producer from Springer, OK who currently serves as CBB chairman. “Our primary goal is to increase beef demand worldwide. The statistics uncovered by this study tell us that we’re achieving that goal and providing producers with an excellent return on their national checkoff investments.”
The study’s other key findings include:
- CBB activities have a substantial impact on beef demand in the U.S. and in foreign markets.
- CBB activities increased beef demand by 2.6 billion pounds per year between 2014-2018.
- Without a national checkoff, U.S. beef demand would have been 14.3% lower than it actually was by the end of 2018
- CBB’s investment in export marketing programs increased U.S. beef exports by 5.5%
- CBB-funded activities generated $11.91 in additional net revenue for beef producers and importers.
- All nine demand-enhancing CBB activities - beef advertising, public relations, beef safety research, channels marketing, nutritional research, industry information, new-product development, product-enhancement research and foreign-market development - had a positive and statistically significant impact on increasing beef demand.
The study estimated three econometric questions: (1) retail domestic beef demand, (2) retail domestic beef supply and (3) U.S. beef import demand. The study’s domestic model also factored in consumer income, while the foreign-demand model factored in exchange rates and gross domestic product (GDP). It also evaluated the CBB’s expenditures in each of its demand-enhancing activities.
The previous ROI study, which Dr. Kaiser conducted in 2014, found that CBB programs were 11.20 times more valuable than their costs. The 2019 study’s ROI calculation of 11.91 shows that CBB programs have continued to provide significant value over the past five years by steadily building beef demand.
“While we are happy that CBB programs are successfully promoting beef, we know that there’s always room for improvement,” Coffey said. “Our board members are dedicated to making the best possible decisions on behalf of American beef producers and importers. As we head into our next fiscal year, we hope to take what we’ve learned in 2019 and continue moving the needle forward.”
To view the complete ROI study, a summary of the study or get more information about the Cattlemen’s Beef Board, as well as the Beef Checkoff and its programs - promotion, research, foreign marketing, industry information, consumer information and producer communications - click here.
* This study only pertains to the funds collected for the national Beef Checkoff program. It does not account for the portion of funds retained by the qualified state beef councils for the state-level efforts.
Source - The Beef Checkoff
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