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Study quantifies beef checkoff ROI

johnrandallalves/iStock/Getty Images cattle drive in western U.S.
Findings show CBB activities increased beef demand by 2.6 billion lb. per year in 2014-18.

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.

Completed in June 2019, the study is based upon an econometric model that quantifies the relationship between 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, CBB is required to conduct an independent analysis of the program’s economic effectiveness 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, Okla., 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 increased beef demand by 2.6 billion lb. per year between 2014 and 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.

The study estimated three econometric factors: (1) domestic retail beef demand, (2) the domestic retail 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. It also evaluated CBB’s expenditures in each of its demand-enhancing activities.

Overall, all nine demand-enhancing CBB activities – beef advertising, public relations, beef safety research, channel 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 previous ROI study, which 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.”

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