Why is there a beef checkoff?

Beef producers created the beef checkoff program 12 years ago as a self-help promotion, research and information program. It was approved by 79 percent of beef producers in a referendum after grassroots input reshaped the program. In January 1998, a Producer Attitude Survey conducted by Aspen Research showed that 70 percent of cattlemen now approve of the checkoff.

The beef checkoff is based on five producer directives:
1) It’s fair – Everybody pays. No one gets a free ride. Producers wanted the assessment to be simple – $1 per head each time a bovine animal is sold.

2) It’s grassroots – State beef councils keep half of each checkoff dollar they collect and spend it according to priorities set by producers in their state.

3) It’s producer-controlled – National board members are nominated by fellow producers at the state level to represent them.

4) It’s cost-effective – The program didn’t create a new bureaucracy. It used existing national, nonprofit, industry-governed organizations to implement programs. Cattlemen’s Beef Board administrative expenses are limited to 5 percent or less of projected revenues. The 1997 administrative costs were 3.1 percent of projected revenues, the lowest level since 1987.

5) It works – The industry’s only self-help program, the beef checkoff works to build demand through promotion, research and information.

Who Makes Checkoff Decisions?

The Cattlemen’s Beef Board administers promotion and marketing programs funded by the national beef checkoff. This 111-member board is appointed by the Secretary of Agriculture to oversee the collection of the $1-per-head checkoff, to certify state beef councils, to implement the provisions of the Federal Act and Order establishing the checkoff, and to evaluate the effectiveness of checkoff programs.

In addition, more than 600 producers serve on state beef council boards in 45 states to make program decisions according to producer priorities in their states.

What can the checkoff do?

The checkoff acts as a catalyst for change. The checkoff doesn’t own cattle, packing plants or retail outlets. It can’t single-handedly turn around a bad market. Beef producers never intended it to be in the business of growing cattle or handling product. What they wanted was a way to stimulate others to sell more beef. This can be done through direct advertising, cooperative marketing, public relations efforts, education programs and new product development assistance.

What can’t the checkoff do?

Checkoff funds cannot be used to influence government policy or action.

Domestic Marketing:

• Foodservice operators are encouraged to add new beef dishes to their menus and promote beef as a meal choice.
• The 1998 foodservice media objectives are to build overall awareness for beef in foodservice; maintain the "look of the leader;" serve as a credible resource for beef information; and motivate foodservice operators to menu and promote a wider variety of beef items.
• To promote underutilized cuts, including the chuck and round, and to stimulate consumer trials of prepared beef products, the rules for the 1999 National Beef Cook-Off have been changed. Qualifying recipes will fall into two categories:
• Ground beef — specifically recipes using ground round or ground chuck as the main ingredient.
• Prepared beef — recipes that create an innovative recipe using a prepared beef product as the recipe’s main ingredient.

Foreign Market Development:

• Foreign marketing efforts are expanding demand for high quality U.S. beef and beef variety meats. Export demand added $110.06 per head to the value of fed cattle, $105 per head to feeder cattle, and $99.70 per head to calf prices in 1996.
• USMEF leveraged $6.4 million checkoff dollars in fiscal year 1997 to gain $6.3 million from USDA Market Access and Foreign Market Development programs to build demand for U.S. beef overseas.
• Despite global economic concerns, exports of beef muscle meats in 1997 exceeded record 1996 exports by over 13 percent, thanks to targeted use of beef checkoff funds and the industry’s hard work addressing such issues as food safety.

Information:

• Food safety research aims to eliminate

microbial and physical contamination on beef carcasses and assure consumers that beef is a wholesome safe product.

• Checkoff provided 75 percent of the research funds needed to develop four technologies now approved USDA to eliminate microbial and physical contamination on the carcass. These include organic acid rinses, hot water rinses, steam pasteurization and steam vacuuming. Steam vacuuming alone is conservatively estimated to save the industry $200 million per year by eliminating trimming waste.
• In 1996, of 26 checkoff-funded research projects, 22 resulted in major policy or industry changes being made at the packing and processing level.
• Checkoff provided a mechanism for the industry to identify the most critical issues in the beef industry, such as E. coli O157: H7, and to develop highly focused research programs to solve these problems.