Promoting Beef: Checkoff $ at work
May 28, 2014
How are Beef Checkoff dollars being spent? It's a question producers tend to ponder every time they sell cattle and notice the line stating a dollar per head has been taken out for the Beef Checkoff Program. Despite new challenges including the record low cattle numbers, both the national and state checkoffs' continue efforts to generate the most demand for beef possible with every dollar they are given to work with.
North Dakota Beef Commission executive director Nancy Jo Bateman said, "One of the most fun activities we have gotten involved in is a BBQ Bootcamp. Meat experts take this program out to communities throughout the summer months and educate up to 300 people in one evening on everything from how to season and spice up your beef to selecting the proper cuts for the meal you want to prepare. It covers all sorts of different grilling techniques, and at the end everyone gets to taste the various products made throughout the evening. It's a great learning experience for the people within the community, plus it serves the purpose of promoting beef because how much better does it get than grilling the right cut of beef with the right seasoning then eating it?"
She said North Dakota is among the most stable states with regard to beef numbers, even as national cow numbers continue to decline, with roughly 1.1 million head marketed annually. Following the first 50 cents that goes to the Cattlemen's Beef Board for national programs, North Dakota currently puts another 12 percent into the Federation of State Beef Councils and the U.S. Meat Export Federation. Remaining Checkoff dollars are split among expanding national Checkoff programs in-state, nutrition, research and education of youth and adults.
Montana Beef Council executive director Chaley Harney said, "This year marks the second Montana will be hosting a pasture-to-plate tour for dietetic interns, which provides these to-be registered dietitians a personal, in-depth experience on how beef is raised and all the benefits it has to offer. This program educates and enables future dietitians to become comfortable recommending beef to their clients and patients."
Montana's 2014 Checkoff budget totals $1.7 million, which is similar to 2013 according to Harney. Of the half of that budget which stays in Montana, 34 percent is dedicated to in-state programs, 47 percent goes toward supporting national programs and 19 percent supports international programs.
"For the month of May, which is beef month, we are giving a $5 beef certificate to anyone in South Dakota who donates blood with United Blood Services," said South Dakota Beef Industry Council director Ron Frederick. "We also include a brochure that talks about the nutritional benefits beef provides in building healthy blood cells – many people are particularly surprised to learn beef has twice as much iron as spinach, and we are really happy with how the campaign is promoting beef and how it fits into a healthy lifestyle."
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Frederick noted that South Dakota sees much greater volatility in its budget year to year compared to North Dakota and Montana. The state is currently tracking between 170,000 and 180,000 fewer head, and consequently dollars, than in 2013. This is due in part to the October 2013 Atlas blizzard and drought conditions over the past few years.
"We were at 3.65 million head of cattle as of Jan 1. 2014, down 200,000 head from a year previous. Following our contributions to the U.S. Meat Export Federation and the Federation of State Beef Councils we had a remaining balance between $1.3 and $1.4 million in South Dakota. We typically invest a large portion of those funds into a state to state partnership with the Northeast region of the U.S., including New York and Pennsylvania. That is where 25 percent of the nation's consumers reside who represent 26 percent the nation's spending, and we feel it is important to drive demand in that area," said Frederick.
Maintaining and increasing beef's appeal with the changing face of the American consumer is among the greatest challenges checkoff programs face going forward, and a key area of focus for the National Beef Checkoff according to Cattlemens Beef Board communications manager Diane Henderson.
"Following hefty market research the last couple years to identify the real target audience with which our national checkoff dollars can make the most impact, the checkoff has become extremely focused on the millennial generation. Those are the 18-35 year olds, and we have put more emphasis toward the older end of that generation. They are a huge, 80-million strong generation that is even bigger than the baby boomers, and they have questions about beef that they ask on social media. We have moved to a more digital and technology based campaign with consumer advertising and marketing that really focuses on these people and engages them in discussion about our product," she said.
This strong consumer focus comes in combination with the lowest budget the national checkoff has seen since its conception. Henderson added that not only are there fewer cattle, but cattle are becoming increasingly more efficient, requiring fewer head of animals to produce the same pounds of meat.
"While a reduced budget poses challenges, the phenomenal thing is the increase in product quality we also have to work with. Ten years ago we had 8-9 cuts of beef that qualified as lean under USDA (United States Department of Agriculture) guidelines. Now we have 38 thanks to the producer improving that end product, and that enhances our ability to promote beef based on nutrition, convenience and taste, all of which are things consumers state make them want our product above other protein sources," said Henderson.
Frederick said that an additional challenge going forward will be maintaining or improving upon current demand despite the record high prices consumers are seeing at the meat counter.
"It's a double-edged sword. We've been very successful in driving beef demand the last few years despite the economy, and while demand is still high, so are prices. High prices are good and necessary for the producer, but I am concerned we could see a loss in market share to competitive meats like chicken and turkey. The question now is how do we maintain beef demand when the per capita availability of beef domestically is going down and the price is going up?" Frederick said he foresees the tremendous demand for U.S. beef overseas potentially filling and exceeding that gap in domestic demand.
Harney agreed that while local and state programs are important, the greatest return on investment the checkoff sees are those efforts focused on high population areas.
"I was reading some Montana checkoff articles from 1959 and one line that caught my eye said, 'Using Montana for example, we could double or even triple beef consumption within the state but that would still not be a drop in the bucket. We need to direct our efforts to where the consuming public is.' That is the perfect example that the more things change the more they stay the same. We still work toward this today, and must continually evolve to connect with our target – the consumer," she said.
As tighter budgets are used in increasingly targeted and efficient ways going forward, Bateman said that beef producers may have to look beyond their normal reading materials to find examples of their checkoff dollars at work.
"We do have those producers who occasionally ask why we aren't doing as much as we used to, and why they don't see ads or other checkoff programs they have in the past. What is happening is our producer-led committees and boards are finding there is more value to the producer to invest those dollars in places where they create demand with consumers versus where a producer may see them. Those consumers need to be convinced to choose us over competitive sources of protein, and as available checkoff dollars decrease, one way to increase efficiency is to stop preaching to the choir, so to speak," she said.
As 2014 continues to unfold, Frederick summed up what could help the Beef Checkoff Program most as being synonymous with what would most help the producer who funds it.
"We really need Mother Nature to cooperate so ranchers can start rebuilding their herds. That's what we need to happen to meet the demand we have for beef out there and to keep prices high enough we can make a profit yet affordable enough to consumers that they don't switch protein sources," he said.