Bill Slovek

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August 26, 2011
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Cattlemen's Corner: Checkoff history

Over the past year there has been a lot of press concerning the checkoff, NCBA and the CBB, so I wanted to take a moment to give you all a brief history.

This month, the Cattlemen's Beef Board (CBB) launched a six-part series featuring 25 years of beef checkoff successes, but let's begin with a refresher on the basics of the beef checkoff. It was established as part of the 1985 Farm Bill and assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States, through their state beef councils, retain up to 50¢ of every dollar collected and forward the other 50¢ to the Cattlemen's Beef Promotion and Research Board, which administers the national checkoff program.

The checkoff was launched in 1986 when a pound of ground beef cost about $1.29 at retail. Fast forward to 2011 when ground beef averages $3.87 per pound and the checkoff is celebrating its 25th anniversary. Today, beef is the number-one selling protein in the U.S., with consumer spending on beef totaling $73.4 million in 2010. And more than 85 percent of consumers know the industry's "Beef. It's What's for Dinner" slogan.

While building demand for beef is one of the goals of the checkoff, that goal is often misunderstood because beef demand is commonly confused with beef consumption. In fact, beef consumption can actually drop as beef demand rises, if consumers are willing to pay more for their favorite protein.

Beef demand is the set of quantities of beef that consumers will purchase at different prices. For example, if we have a quantity of 60 pounds of beef per capita to sell, price will adjust to clear the market - and the price that consumers are willing to pay will depend on how much consumers like the product offerings, as well as the price of other meats, and consumer income levels.

If we use consumption as a measure of demand, we ignore the desirability of what we offer and we fall into the trap of offering consumers what they really don't want, which was the cause of sagging beef demand prior to the implementation of the checkoff. Demand will only increase as everyone in the beef production chain understands demand and offers consumers what they want in the form of a continuing series of new quality-controlled products. There simply has to be a consumer-level willingness to pay that supports and finances progressive change over time. That's where your Beef Checkoff Program comes in.

With a clearer understanding of beef demand, it's easy to see that our checkoff can't single-handedly change a bad market, but instead is meant to act as a catalyst for industry participants to help sell beef. For more information about how producers benefit from our $1-per-head investments, and to read success stories from the first 25 years of the beef checkoff, visit the CBB's Web site at www.beefboard.org. They will be featuring each program area - promotion, research, consumer information, industry information and foreign marketing - more in-depth over the coming weeks. You can also learn more about checkoff activities in South Dakota on the South Dakota Beef Industry Council Web site at www.sdbeef.org.

Over the past year there has been a lot of press concerning the checkoff, NCBA and the CBB, so I wanted to take a moment to give you all a brief history.

This month, the Cattlemen's Beef Board (CBB) launched a six-part series featuring 25 years of beef checkoff successes, but let's begin with a refresher on the basics of the beef checkoff. It was established as part of the 1985 Farm Bill and assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States, through their state beef councils, retain up to 50¢ of every dollar collected and forward the other 50¢ to the Cattlemen's Beef Promotion and Research Board, which administers the national checkoff program.

The checkoff was launched in 1986 when a pound of ground beef cost about $1.29 at retail. Fast forward to 2011 when ground beef averages $3.87 per pound and the checkoff is celebrating its 25th anniversary. Today, beef is the number-one selling protein in the U.S., with consumer spending on beef totaling $73.4 million in 2010. And more than 85 percent of consumers know the industry's "Beef. It's What's for Dinner" slogan.

While building demand for beef is one of the goals of the checkoff, that goal is often misunderstood because beef demand is commonly confused with beef consumption. In fact, beef consumption can actually drop as beef demand rises, if consumers are willing to pay more for their favorite protein.

Beef demand is the set of quantities of beef that consumers will purchase at different prices. For example, if we have a quantity of 60 pounds of beef per capita to sell, price will adjust to clear the market - and the price that consumers are willing to pay will depend on how much consumers like the product offerings, as well as the price of other meats, and consumer income levels.

If we use consumption as a measure of demand, we ignore the desirability of what we offer and we fall into the trap of offering consumers what they really don't want, which was the cause of sagging beef demand prior to the implementation of the checkoff. Demand will only increase as everyone in the beef production chain understands demand and offers consumers what they want in the form of a continuing series of new quality-controlled products. There simply has to be a consumer-level willingness to pay that supports and finances progressive change over time. That's where your Beef Checkoff Program comes in.

With a clearer understanding of beef demand, it's easy to see that our checkoff can't single-handedly change a bad market, but instead is meant to act as a catalyst for industry participants to help sell beef. For more information about how producers benefit from our $1-per-head investments, and to read success stories from the first 25 years of the beef checkoff, visit the CBB's Web site at www.beefboard.org. They will be featuring each program area - promotion, research, consumer information, industry information and foreign marketing - more in-depth over the coming weeks. You can also learn more about checkoff activities in South Dakota on the South Dakota Beef Industry Council Web site at www.sdbeef.org.


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Tri-State Livestock News Updated Aug 14, 2012 04:04PM Published Aug 26, 2011 11:12AM Copyright 2011 Tri-State Livestock News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.