Kaiser talks Beef Checkoff ROI

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In the most comprehensive study ever rendered about the Return on Investment (ROI) of beef checkoff assessments, Dr. Harry Kaiser of Cornell University concludes that each dollar invested in the Beef Checkoff Program returned about $11.20 to the beef industry.

"The findings couldn’t be better for beef importers and beef growers in the United States," Kaiser said. "I found that the Beef Checkoff Program had a substantial impact on beef demand both in the United States and in international markets. In the United States, what I found was over the period of 2006 to 2013, had there not been any CBB marketing activities, beef demand in the United States would’ve been 11.3 percent lower than it actually was. So obviously that was a substantial impact. Likewise, I found a very similar finding in terms of CBB contributions to foreign market development in the selected markets that I looked at, which were seven regions in the world, had there not been a CBB contribution to foreign market development, foreign U.S. exports would’ve been 6.4 percent lower than they actually were. So clearly that is a substantial impact on beef demand." 

Kaiser explains what this means for U.S. producers and importers.

"In terms of the bottom line, beef producers and beef importers are getting a tremendous rate of return on their investment," Kaiser said. "Specifically what I found is for the overall nine marketing activities both domestic and foreign, these investors in this checkoff program are receiving $11.20 back on each incremental dollar invested. So put differently, if there was another additional dollar that the CBB found and they put it into their marketing portfolio, that would generate an additional $11.20 in net revenue to the industry." 

Kaiser leaves beef producers with two conclusions from the study.

"There are really kind of two conclusions that I’d like to make," he said. "First is that your dollars are having a tremendous impact:  a rate of return of $11.20 in terms of every dollar invested. So the take-home there should be that you should be feeling very happy and very proud of the marketing effort that your organization, on behalf of you, is making. A second message however, is that given the tremendous benefit-cost ratio, what an economist like me would tell you is you should probably be spending even more money on the marketing activities because you are leaving dollars on the table. And when you have such a high marginal benefit-cost ratio, it tells you No. 1, it’s profitable, but it also tells you that you’re under-investing. So that’s one message: you are under-investing in a very profitable program." 



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