Beef Checkoff posts return of $5.55

by MEAT&POULTRY Staff
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CENTENNIAL, COLO. — Approximately $5.55 in value was returned to beef producers for every dollar they invested into the Beef Checkoff Program between 2003 and 2008, according to a new economic study completed by Dr. Ron Ward, professor emeritus for the Food and Resource Economics Department of the University of Florida.

"Is the beef checkoff a demand driver? This was the most fundamental question of the entire study, and the answer is an overwhelming ‘yes,’ the generic promotion of beef has shifted beef demand," Mr. Ward said. "The marginal rate-of-return is large enough to provide overwhelming evidence that the programs are achieving positive impacts [on] the U.S. demand for beef."

Titled "The Beef Checkoff Programs and Their Impact on U.S. Beef Demand," the study evaluates the effectiveness of checkoff-funded programs in reaching their overarching goal of growing beef demand. Ward employed statistical models measuring the effects of major beef demand drivers overall, then specifically, of the Beef Checkoff Program itself as a demand driver. Mr. Ward presented the study results to the checkoff's Joint Industry Evaluation Advisory Committee at the 2009 Cattle Industry Summer Conference in Denver.

Objectively determining the effectiveness of recent beef checkoff programs required identifying all factors impacting the demand for beef – including household demographics, market penetration, amount of beef consumed per household and beef promotions, just to name a few.

The report on Mr. Ward’s research addresses beef consumption patterns, estimation of the impact of the checkoff on market penetration or the probability of consuming beef within a defined period, and the impact on the level of consumption among beef consumers. The end product is the determination of the rate-of-return from beef producers’ and importers’ national checkoff investments.

Report findings include:

• The percentage of U.S. households purchasing beef in a given two-week shopping period – at 78.8% – would have been about three percentage points lower between 2003 and 2008, if not for the beef checkoff programs in place then, the study concluded.

• The two-week shopping analysis found an average of 3.42 servings of beef consumed per household member and concluded each of those households would have purchased about 0.11 fewer servings per two-week period if not for the beef checkoff programs.

• Expressing shifts in demand back to the live-weight level, Mr. Ward estimates the marginal rates-of-return to the checkoff program between 2003 and 2008 to be $5.55 for the average checkoff expenditure level.

The full "Ward Report" is available for review at http://www.beefboard.org/evaluation/files/Ward%20Study%202009.pdf.

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