By MEGGIE I. FOSTER
Assistant Editor

DENVER, Colo. — Backed by emotion and passion for their beloved industry, the Cattlemen’s Beef Board Operating Committee recently recommended a sharp 6.6 percent decrease in their promotion budget for Fiscal Year 2009 following a series of intense meetings in Denver, Colo.

According to Dave Bateman, chairman of the Beef Board from Illinois, this lighter recommendation reflects changes in the industry, including foreign marketing and the best use of the Board’s $1 producer-paid checkoff fee.

In an emotional step towards change, the Beef Promotion Operating Committee, of the Cattlemen’s Beef Board,
recommended a $45.8 million budget for Fiscal 2009, reflecting a nearly 7 percent decrease from the $49 million budget for Fiscal 2008. The Beef Board budget is the primary administrator for the national beef checkoff program, which funds popular advertisement campaigns such as Beef. It’s What’s For Dinner.

However, before moving forward with ink and pen, the $45.8 million recommendation for the 2009 budget must first be approved by the full Beef Board and the USDA.

“We faced some very difficult decisions last week as we tried to decide what areas to make cuts in,” said Bateman. “This came on the heels of even steeper cuts last year, and costs keep increasing so it’s getting extremely challenging to find more places to cut back without eliminating the checkoff’s effectiveness in any particular area.”

According to Bateman, the biggest cuts came in the areas of promotion, down 12.4 percent from 2008, and consumer information, down 13.3 percent, while producer leaders did recommend increasing checkoff investments in foreign marketing by 11.2 percent as overseas opportunities expand.

For specific budget recommendations, visit www.beefboard.org
Before making their recommendations, members of the operating committee, which include 10 members of the Cattlemen’s Beef Board and 10 directors from the Federations of State Beef Councils – spent several days with state beef council executives and leaders of the checkoff’s joint checkoff committees, as those groups developed strategies for investing the limited checkoff dollars in the most efficient manner possible in Fiscal 2009.

“I was involved in several of the discussions in Denver with my collegues from across the United States,” said Elizabeth Harsh, executive director of the Ohio Beef Council. “One of the most positive influences of the Beef checkoff is the building of state and national integrated marketing efforts.”

“All states are looking at their budgets carefully … as we know that all the pieces need to gel together at the end of the year,” said Indiana Beef Council executive director and beef producer Julia Wickard. “Any budget recommendations that were made during our meetings in Denver have to be approved by the full Board and then the USDA. Additionally, producers will have the opportunity to make changes and recommendations during summer meetings in Denver,” she added.

“There is a lot of consternation among my colleagues and I from across the U.S. regarding some of these changes,” said Wickard. “From promotion to research to producer communications, we need to make sure we’re working with producers to make sure they’re comfortable with the recommendations and the unfortunate cuts we are going to have to make.”

At the core of sometimes emotional debates during the planning sessions was funding for consumer advertising, which has become increasingly difficult in recent years because of growing costs for all media advertising, at the same time that checkoff collections have decreased, said Bateman.

According to USDA National Ag Statistics Service (NASS) numbers, general U.S. cattle numbers are on the negative downtrend from previous years.

“At the U.S. level, cattle inventory is at 96.6 million, down from a peak in the early 1970s,” explained Greg Preston, director of Indiana NASS, who also noted a slight decrease from 2007 inventory at 97 million.

“Although national beef cow numbers are down from the 1970s, “through production efficiencies we actually produce more beef today than in 1975 and as a result have more beef to market with less checkoff dollars to utilize,” said Harsh.

In regards to Indiana cattle numbers, “beginning cattle inventory in 2007 was 900,000 and in 2008 we saw a slight decrease at 890,000,” Preston noted.

For Ohio, cattle inventory noticed a slight increase in 2008 at 1.27 million from 1.26 million in 2007, which Harsh attributed to the drought and increased slaughter.

The beef with advertising

Maintaining its well-known advertising campaign is a key concern for the beef checkoff leaders.

“We struggled to figure out how to maintain a strong enough promotion budget to support a viable print and radio advertising campaign without cutting other important programs beyond recognition,” said Beef Board Secretary/Treasurer Dan Dierschke, a producer from Texas.

“While consumer advertising is definitely the most visible area of checkoff investments, we also understand that areas such as research and foreign marketing are extremely important if we are to stay ahead of disease and pathogen challenges and tap international markets, where the majority of our growth potential lies.”

“We’re trying to find the best (budget) balance to facilitate all the programs through the beef checkoff,” said Wickard. “This is the first time I’ve been through this,” she said, referring to the open, often emotional discussions in Denver.

“I appreciate the work of the Beef Board and my colleagues in Denver, who worked openly to listen to all of the talented industry professionals in the room that work with these programs everyday.”
In the coming stages of the Fiscal 2009 budgeting process, the full Beef Board will be asked to approve the budget at its meeting in Denver in July. Joint industry advisory committees and subcommittees also will meet in Denver to prepare recommendations for specific program proposals that are funded with that budget.

Those proposals will be considered by the Operating Committee in September, before the Oct. 1 beginning the fiscal year, and must finally be approved by the USDA before any checkoff dollars may be spent.