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Independent Analysis Shows Net Gain to Cattlemen from Beef Checkoff The average dollar spent through the beef checkoff generated a $5.67 net gain to cattlemen, according to an independent peer-reviewed study conducted by Ronald W. Ward, an economics professor from the University of Florida The findings were presented at the NCBA Convention. Ward's analysis predicted that cattlemen's receipts increased $6.46 billion over receipts that would have existed without the checkoff as follows: The analysis predicted total cattle producer revenues to be $321.18 billion during 1987 through the first quarter of 2000. Those revenues were estimated to have been $314.72 billion without checkoff expenditures leaving $6.46 billion of increased revenue in producers' pockets that can be attributed to checkoff activities. From 1987 through 2000, beef checkoff assessments totalled $968 million (less than 3-tenths of one percent of producer revenues during the same period.) Half of those funds stay at the states where they are collected and the other half is forwarded to the Cattlemen's Beef Board to fund national promotion, information and research programs. At the national level, the Beef Board has spent $337 million on promotion programs and another $100 million on consumer information and industry information programs as defined in the Beef Promotion and Research Act. These expenditure levels were for programs within the United States and do not include checkoff expenditures for foreign market development. "Analyses at the household level shows positive and significant responses to the promotion and information programs," Ward wrote. "Results show rates of return at the producer level from beef checkoff programs have consistently exceeded $5 returned for every $1 collected over time. Three separate methods of analysis show that U.S. consumers have responded to beef promotion and information programs." Ward drew from three independent databases to analyze domestic demand for beef. Two of the analyses were based on data from customer surveys and meat purchasing data. This information was gathered and tabulated by the NPD Group, a private company specializing in consumer surveys. These data report in-home use and do not include information about purchases for away from home consumption. The third database includes USDA national market information based on average quarterly beef, pork and poultry prices and volumes, consumer income and other national data. Ward notes that the end-results from three separate analyses using three different databases would not be expected to be exactly the same. However, Ward states, "if the checkoff is truly having an impact on beef demand, one should be able to draw similar broad conclusions when looking at results from analyses of different databases." "The three separate analyses show the beef checkoff had a positive and statistically significant impact on retail purchases of beef," Ward wrote. "Also, checkoff programs are shown to attract new consumers to the beef market and the impacts are statistically significant." Based on analysis of meat purchasing data, Ward explains that the change in demand attributed to the checkoff for an individual would not exceed a half-pound and the gain is probably less, depending on how much is spent on promotions and information in a particular quarter. Gains indicated with the meat purchasing model were higher than estimated with the other models. The lower range of impacts using the other models provide a more conservative estimate and Ward emphasized those more conservative results. Through further analysis, Ward concluded that consumer information and industry information programs are most effective in attracting new consumers or in assuring that consumers decide to purchase beef while promotion programs are most effective at influencing consumers to purchase more beef once the initial decision to purchase is made. Analyzing the beef servings data, Ward found that household servings could increase up to 2/10 of a pound in a two-week period depending on the level of checkoff expenditures. "We do not know exactly how much a "serving" weighs, but even with this limitation, this analysis shows that the beef checkoff has had a positive and important economic impact on beef demand," Ward wrote. |
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