An Organization's Response to a Vexing Cattle Market
By Jerry Effertz, Chairman
Federation of State Beef Councils
Velva, North Dakota
It hasn’t been smooth sailing for the beef cattle industry over the past year. For its part, the cattle market has certainly been aggravating. As a beef producer I know the limitations of what any of us at the ranch level can do individually to fully control profitability and assure that the bottom line has more black ink on it than red.
Our industry organizations must not only be aware of those limitations, but be on the lookout for ways that damaging outside influences can be mitigated. Recently the Federation of State Beef Councils did just that, dipping into its reserve funds to support national and international promotion programs that would help increase demand for beef.
The Federation allocated more than $1.2 million from its reserve funds over the last nine months for this effort. These dollars come from state beef council boards who voluntarily remit part of their half of the $1-per-head beef checkoff to be used at the national and international levels. State board members recognize that beef production states without large population centers benefit from spending their checkoff dollars where most beef consumers live.
The promotions were conducted during a time of high protein production that put significant pressures on the cattle market. One of the efforts was a campaign conducted by the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff Program, to drive nationwide sales of fresh beef at retail.
That promotion is based on a program called Ibotta, a mobile shopping app with a subscriber rate of 22 million mostly-millennial consumers. The partnership gave consumers the chance to engage with educational information about beef and then unlock a small cash-back rebate for any ground beef product at any store, nationwide. The Beef Checkoff Program paid for the rebates of verified sales.
Results from the effort significantly surpassed standard Ibotta campaigns. The redemption rate for ground beef was nearly 40 percent; the average Ibotta redemption rate is 23 percent. More than 1.45 million consumers unlocked the beef rebate and saw beef content, such as videos, recipes and messages, and more than 576,000 redeemed the rebates. In just four weeks more than 631,000 pounds of ground beef were sold.
Many state beef councils contributed additional funding to promote the campaign to consumers in their markets. They helped drive traffic to the app and create broader visibility for beef. The total value of the Ibotta campaign is estimated to be more than $4.4 million.
But that’s only half of it. International promotion funded through the Federation allocation and conducted by the U.S. Meat Export Federation, another checkoff contractor, helped move more than a million incremental pounds of beef in Japan and Korea. Among the efforts was a push to have chilled U.S. beef replace Australian beef at all Costco outlets in Korea – which came to full fruition in May 2017. This was accomplished through USMEF trainings, sampling demonstrations, regular visits and meetings to build relationships, and more. It means an incremental increase of over 33 million pounds, which will increase the total U.S. market share in Korea by about 3-4%.
These results are gratifying, but obviously only a small portion of what the state and national checkoff-funded partnership does daily to help increase consumer acceptance of and demand for beef in the United States and abroad. I’m proud of the work my fellow beef producer volunteer leaders have done to oversee these kinds of efforts, and the staffs that carry out the programs. And I’m especially proud of all cattle producers who make this work possible through their $1-per-head checkoff investments.
Jerry Effertz is a third-generation cattle producer who with his wife, Norma, operates Black Butte Acres Limousin Ranch, raising seedstock cattle and backgrounding feeder calves near Velva, N.D. He has served in numerous beef industry leadership positions at both the state and national levels.