The Return on Your Beef Checkoff Investment How your $1-per-head benefits your bottom line

Background USDA requires independent analysis of the economic effectiveness of the programs funded by the Beef Board at least once every five years. Accordingly, the checkoff’s Evaluation Committee researched and discussed needs with various potential researchers and commissioned Dr. Harry Kaiser of Cornell University to complete the macroanalysis in 2014.

About the Researcher Dr. Harry Kaiser Gellert Family Professor of Applied Economics and Management at Cornell Author of more than 128 journal articles, five books, 17 book chapters and more than 150 research bulletins Has conducted more than 120 economic evaluation studies of checkoff programs in the U.S., Canada and Europe

Objectives of Research Address two questions regarding programs funded with CBB budget 2006-2013: What would U.S. beef demand be in domestic and foreign markets had there not been any CBB-funded programs? Are the benefits of the CBB marketing programs larger than their costs?

Methodology Dr. Kaiser developed two econometric models – one for domestic market and one for international market. Models netted out impacts of other important factors (besides checkoff activities) affecting beef demand, including beef and other meat prices, income, exchange rates and economic conditions in countries to which we export.

What Was Measured? Most comprehensive ROI study ever completed for checkoff Evaluated all commercial beef disappearance, including retail, foodservice and international data, over 8 years, as opposed to previous studies of just domestic retail. Also analyzed individual categories of nine checkoff-funded marketing categories (including foreign marketing) separately, then brought categories together for overall return on investment.

Key Findings Every dollar invested in checkoff programs funded by CBB between 2006 and 2013 returned about $11.20 to the beef industry! “The news for beef checkoff investors couldn’t be better.” Dr. Harry Kaiser

Key Findings Making a dramatic difference in pounds of beef sold in U.S. market Checkoff increased pounds sold by near 16 billion from 2006 through 2013.

That’s an increase of 11.3% in sales in the domestic market alone Key Findings That’s an increase of 11.3% in sales in the domestic market alone

Key Findings Making a dramatic difference in pounds of beef sold in global marketplace International demand for U.S. beef was 6.4% higher, thanks to checkoff programs

Key Findings Checkoff-funded foreign- market development increased market share of U.S. beef products: Each 1% increase in expenditures increased market share 0.167%

Key Findings Individually, each checkoff program area analyzed had a positive and statistically significant impact on beef demand: Generic beef advertising Channels marketing Industry Information New-product development Public relations Nutrition research Beef-safety research Product-enhancement research 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: Had there been no generic beef advertising by the CBB, domestic beef demand would have been 0.7% lower over this period than it actually was; 2. Had there been no CBB channels marketing, domestic beef demand would have been 0.6% lower over this period than it actually was; 3. Had there been no CBB industry information marketing, domestic beef demand would have been 0.2% lower over this period than it actually was; 4. Had there been no CBB new product development, domestic beef demand would have been 1.2% lower over this period than it actually was; 5. Had there been no CBB public relations, domestic beef demand would have been 0.5% lower over this period than it actually was; 6. Had there been no CBB nutritional research, domestic beef demand would have been 3% lower over this period than it actually was; 7. Had there been no CBB beef safety research, domestic beef demand would have been 2.1% lower over this period than it actually was; 8. Had there been no CBB product enhancement research, domestic beef demand would have been 0.4% lower over this period than it actually was; and 9. Had there been no CBB foreign market development expenditures, foreign beef demand would have been 6.4% lower than it actually was.

Combination of Programs Percentage impacts of each of the eight domestic areas analyzed add up to less than 11.3% -- which indicates that there are positive synergistic impacts of these activities collectively In other words, you can’t take away an individual program area without affecting the end result

What Does it Mean for Checkoff Payers? Higher prices for cattle and beef Higher net revenue for your business than you would have had without the beef checkoff Increased opportunity for continued growth 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.

Dr. Kaiser’s Conclusion “If I was investing my hard-earned dollars into the checkoff, I would be proud to do so, based on the findings of this study…. Most of us probably wish we could get that kind of return on all of our investments!” 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.

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