2003 News Archive

Contact:	(303) 220-9890	beefboard@beef.org

How Does the Checkoff Program Build Demand for Beef?

DENVER (Dec. 16, 2003) - When cattle producers helped develop the mandatory Beef Checkoff Program in the mid-1980s, they asked for a self-help program that would focus strictly on building demand for their end product - beef.

Building demand remains the mission for the checkoff program today, more than 17 years later. But just how have producers who serve on the Cattlemen's Beef Board and state beef councils invested those $1-per-head beef checkoff assessments to build demand, and how does that truly help cattlemen back on their family farms?

DEMAND TRENDS  

Consumer demand for beef began heading upward in 1998, after nearly 20 years of decline. All told, demand increased about 10 percent between 1998 and 2002. And with an increase of more than 3 percent between 2000 and 2002 and demand remaining on a strong upward trend in 2003, the beef industry is clearly on track to meet the goal of its Long Range Plan to increase demand by 6 percent between 2001 and the end of 2004.

It's important to realize that the Beef Demand Index that tracks consumer demand takes into account more than just consumption levels. Consumption measures supply, not demand, because we consume virtually all that we produce. The question is, at what price? Among other economic factors, then, the Beef Demand Index includes consideration for the prices that consumers are willing to pay for beef at any given time (compared to prices paid for competing protein choices) and further makes adjustments for population increases, so that demand does not necessarily grow simply because the population grows.

Of course, growing or strong demand for beef does not automatically correlate to profitability for producers. After all, supply may have a larger impact on prices producers receive at any point in time. But certainly it's easy enough to understand that producers fare better with demand growing than they would if it were not advancing. In fact, Cattle-Fax estimates that the increase in beef demand during the last few years has added about $175 to $200 per head to the value of fed cattle and $200 to the value of a 550-pound steer calf during recent months.

Certainly, then, even if producers were not receiving what they hoped for their calves at any given point in time, realizing $175 to $200 that wouldn't otherwise be available is extremely beneficial. That is what the Beef Checkoff Program focuses on - building demand for cattlemen's product amid or even despite various other economic, industry and political forces at work separately.  

SO HOW ARE CHECKOFF DOLLARS INVESTED TO BUILD DEMAND?

Based on its very mission, in fact, all checkoff programs are aimed at building demand for beef. Following are a few examples of some of the demand-building programs being funded with checkoff dollars:

Consumer Advertising - The checkoff launched its current "Beef. It's What's for Dinner" nutrition campaign in 2003 to help set the record straight about the nutritional values of beef. This campaign featured four new print ads, which ran in 16 consumer magazines during the year, aimed at helping health-conscious consumers feel good about eating beef. The ads show a delicious-looking lean beef meal and deliver the message that lean beef has only one more gram of saturated fat than a skinless chicken breast - yet packs a nutritional punch with six times more zinc, three times more iron and eight times more vitamin B12.

During the course of the nutrition ad campaign, more than 92 percent of adults in the target audience - more than 86 million people! - were reached by the advertising an average of 13 times each in 2003. On average, the advertising reached consumers for less than a penny a person.

Sam Elliott's voice and Aaron Copland's "Rodeo" music accompany beef checkoff advertising in top markets throughout the country, helping achieve 87 percent consumer recognition of the checkoff program's "Beef. It's What's for Dinner" advertising campaign slogan. That's considered an astounding accomplishment by advertising standards of even the biggest advertisers, like Coke or IBM, which spend exponentially more on advertising than the checkoff could invest.

New Product Development - Since the checkoff program began focusing on new product development about five years ago, about 1,600 new beef products have come to market. To continue to work toward building demand, it has been critical to get products out there that appeal to modern consumers' demands for convenience, variety, versatility, nutrition, tenderness, good taste, and the like.

More than 800 restaurants and five new retailers have sold 6 million steaks from the checkoff's Beef Value Cuts program, including the Flat Iron, Shoulder Tender, and Ranch Cut steaks, which also are available in a growing number of meat cases at retail outlets. Other new product development efforts have netted development of a "Homestyle Beef Pot Roast" in the hot foods delis of more than 1,000 Kroger, Ukrop's and Super Target Stores, and have improved the quality of heat-and-serve product offerings through the Mark of Quality program.

Consumer and Industry Information - More than 100 million positive media impression about the nutritional value of beef have been generated through the checkoff-funded Council for Women's Nutrition Solutions. In addition, thousands of Girl Scouts are participating in a nutrition and physical activity program designed especially for them through the Beef Checkoff Program. "Fit for a Princess" is designed for Junior Girl Scouts (ages 8 to 11) and addresses the fact that girls in this age group do not get enough zinc or iron, according to USDA. This program has been a hit with Girl Scout troops throughout the country.

During fiscal 2002, checkoff dollars generated coverage of beef information in more than 6,500 newspapers and magazines with a combined circulation of 1.27 billion, plus broadcast media. The checkoff also funds extensive food communications programs that share beef information and recipes with top-tier food media and food professionals and answers their questions about beef and beef products.

Food Safety Research - About $1.5 million in checkoff funds are invested in food safety research and technology each year, in addition to the millions spent by individual companies, universities and government agencies. Some significant technologies to reduce the risk of food contamination, such as organic acid rinses and steam vacuuming, have resulted from these research investments and are being used today. In fact, beef checkoff-developed food safety systems are used in the processing of nearly 90 percent of fed cattle in the U.S. and can reduce bacteria during processing by 99.99 percent.

Certainly beef safety programs are demand-building ones because consumers are more likely to buy more beef if they are comfortable that it is safe. A recent report indicates that there has been a 21 percent reduction in E. coli illnesses since 2000, and 87 percent of consumers polled in August 2003 said they are confident that beef products in the U.S. are safe from BSE.

Foreign Marketing - The Beef Checkoff Program promotes U.S. beef in nearly 80 foreign countries. Since the checkoff began about 17 years ago, U.S. beef and beef variety meat exports have risen more than 300 percent in volume and nearly 400 percent in value.

These are just a few of the programs that the Beef Checkoff Program has and is investing in toward its mission to build consumer demand for beef. More information about these and other demand-building programs are available at checkoff web sites including www.beefboard.org <http://www.beefboard.org/>, www.beefitswhatsfordinner.com <http://www.beefitswhatsfordinner.com/>, www.cwns.org <http://www.cwns.org/>, www.rdranch.com <http://www.rdranch.com/>, www.teachfree.com <http://www.teachfree.com/>.

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The Beef Checkoff Program was established as part of the 1985 Farm Bill. The checkoff 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 retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen's Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval. The checkoff assessment became mandatory when the program was approved by 79 percent of producers in a 1988 national referendum vote. Checkoff revenues may be used for promotion, education and research programs to improve the marketing climate for beef.

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