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Beef checkoff wrestles with a budget reduction

By MEGGIE I. FOSTER
Assistant Editor

INDIANAPOLIS, Ind. — In an era of a changing economic climate, the same is true for the beef checkoff as it recently faced a 15 percent reduction in its budget during the National Cattlemen’s annual meeting in San Antonio, Texas.

“The newly amended national checkoff program budget for Fiscal 2009 is 15.8 percent lower than our Fiscal 2008 budget and it’s likely to get worse before it gets better,” said Lucinda Williams, of Hatfield, Mass., who serves as the chairperson for the Cattlemen’s Beef Board.

While the checkoff deals with a dwindling budget for marketing, research, education and product promotion, the Cattlemen’s Beef Board proposed a recommendation of a $1 per head increase in the checkoff fee from $1 to $2.

According to Williams, this would help increase checkoff investments in foreign markets, product research and development as well as advertising, promotion and education.

“With more than 95 percent of the world’s population living outside of the United States, it seems obvious to invest in that growth potential,” she said during a visit to the Indiana Cattle and Forage Symposium in Indianapolis, Ind. on Feb. 27.

In past years, the beef checkoff has experienced tremendous success in foreign marketing endeavors focusing on buyer loyalty, market expansion and issues management.

“In Fiscal 2008, U.S. beef exports reached 2.09 billion pounds valued at $3.4 billion – an increase of 29 percent in volume and 28 percent in value over Fiscal Year 2007,” said Williams. “There is great opportunity in this area, we need to get our product to these markets and watch our demand skyrocket.”

Williams cited the many beef products that Americans don’t have at the dinner table - such as tongue - that many markets value as a premium product.

“Our ability to export just brings value back to us as producers,” she added.

Williams discussed other changes recommended by the board including providing an opportunity for a referendum every seven years and expanding contract authority to any national non-profit beef organization.

“None of these suggestions will move forward unless producers speak up,” Williams explained.

In fact, she worries that many cattlemen and dairy producers may be unaware of how the beef checkoff works and why it is critical to the beef and dairy industries.

Williams specifically targeted dairy producers as well as beef producers, since she herself owns and operates a 200-cow Holstein dairy farm alongside her husband in a highly populated rural area of Massachusetts.

“Twenty-five percent of all beef products are dairy, so it’s important for this industry to be involved in checkoff activities just as much and have a voice,” said Williams, who added that she is the first officer of the Board from a dairy farm.

Williams wanted the producers to understand that under the current checkoff guidelines $1 per head on every sale of a bovine animal is committed as a checkoff fee, where 50 cents is dedicated toward national funding and 50 cents toward state funding of the checkoff. This investment is made by more than 800,000 beef, dairy and veal producers equaling a nearly $69 million checkoff.

One of the checkoff’s strongest programs is geared toward the improvement of consumer demand for U.S. beef. “All told, Cattle Fax estimates that the increase in consumer demand for beef since 1998 has added about $250 per head to the price of fed cattle and about $200 per head to the price of calves,” she said.

And despite the growing consumer weariness to purchase products from large-scale poultry, dairy and swine operations, consumer confidence in the safety of beef continues to be strong, ranking on par with fruits and vegetables.

“Consumer confidence in the safety of beef reached historic highs in November 2008, when a food safety tracking study showed that 91 percent of consumers have strong confidence in the safety of ground beef,” Williams said. “Beef is on par with confidence in fruits and vegetables and higher than consumer confidence in chicken. Consumers will buy our products when we ensure safety and quality is No. 1.”

3/11/2009