Cattlemen were given a sobering assessment of the Beef Checkoff's revenue situation from National Cattlemen's Beef Association (NCBA) President John Queen at the 2007 Texas Cattle Feeders Association (TCFA) Annual Convention.
There is ongoing discussion in the beef industry about whether to increase the Checkoff from the $1 per head level it has been at since its inception. Queen said he would not be taking an official position on the issue until directed to do so by NCBA's state affiliates like TCFA, but said there is reason to question whether "the resources that we currently have to promote beef domestically and internationally are proportionate to the challenges of our product."
Queen underscored his point by asking his audience a rhetorical question: "How many of you operate your feedyard today, your ranch at home, or any other business you're in with the same budget you operated on in 1985?'' When no one raised a hand in response, Queen said that he wasn't surprised because it wouldn't be possible to do business on such an outdated budget.
Queen said it was equally "impossible to get what we need out of our Checkoff" when it is limited to the same budget established in the 1985 Farm Bill. "It takes about $1.90 to get the purchasing power, due to inflation, that $1 gave us 20 years ago."
The capacity of the Checkoff has also been eroded over time by increases in carcass weights in the time since the Checkoff was instituted, Queen said. "In 1986, the average carcass weight in the United States was 656 pounds. Last year in the United States, the average carcass weight was 779 pounds -- almost 20% more beef and still just a single dollar to successfully market it."
Cattlemen should also consider how little the Checkoff is extracting from their revenue compared to other costs like sales commissions, Queen said, explaining that, "Based on current prices, that $1 Checkoff that you pay with every animal makes up anywhere from one-seventh to one-tenth of 1% of the revenue you receive when you sell calves, feeder cattle and fed cattle."
For that "small investment," Queen said cattlemen are receiving "award-winning consumer marketing campaigns throughout the nation and aggressive marketing efforts across the globe." He added that the cattle business is also benefiting from Checkoff-funded product development "that has put new beef items on restaurant menus and in the meat case and added significant carcass value to every animal you sell."
Checkoff-funded initiatives have "added up to an increase in beef demand of almost 15% since 1998. That translates to about $200 per head in the price of cattle," Queen said.
Queen said the current Checkoff is not providing sufficient funding to develop more beef products and fund the research necessary to enhance the safety and quality of beef and to show its nutritional benefits. U.S. beef producers are also falling behind foreign competitors when it comes to fighting for market share, he added, noting that Australia's checkoff equates to $4.22 in U.S. dollars and Canada's $100 million federal budget for international beef promotion is almost four times as much as last year's Cattlemen's Beef Board Checkoff-funded budget for domestic and international promotion combined.