Weather, Feed Costs Fuel Pork Checkoff Uncertainty

Pork Checkoff funding is expected to decline this year, causing National Pork Board members to carefully plan checkoff expenditures.

Published on: Jul 10, 2012

The National Pork Board will meet during the annual Pork Industry Conference to begin work on their 2013 budget Tuesday.

The board begins its planning process each year by assessing market conditions, projecting available Checkoff revenue, and then establishing a fiscal-year spending target. Economist Steve Meyer, who consults for the board, will provide board members his projections for 2013, which he said appears to one of unusual uncertainty. Meyer said this summer's drought in the Corn Belt means feed costs will put great pressure on profitability in 2013.

Meyer currently is projecting that 2013 revenues from the Pork Checkoff will be approximately $79 million. That compares with an $82.9 million revenue projection for 2012. Producers contribute 0.4% of the sales price to the Checkoff each time they sell a hog. Pork importers contribute a similar amount based on U.S. sales. In 2012, approximately 110 million hogs will go to market in the United States. The board distributes roughly 20% of the Checkoff revenue to state pork organizations for their use to promote pork and conduct research. The remainder is devoted to national programs in promotion, research and consumer information.

Pork Checkoff funding is expected to decline this year, causing National Pork Board members to carefully plan checkoff expenditures.
Pork Checkoff funding is expected to decline this year, causing National Pork Board members to carefully plan checkoff expenditures.

"With the current projections for hog prices, combined with a corn crop whose yields are being threatened by hot, dry weather, 2013 is shaping up to be a difficult one for farmers," said Board President Conley Nelson, a farmer and pork executive from Algona, Iowa. "Board members will be very cognizant of those facts as we set a spending target for 2013 that addresses our need to promote pork domestically and internationally and our commitment to managing programs that protect our farmers' ability to operate freely and that keep us competitive."

Once the board establishes a spending target, producer-led committees and National Pork Board staff begin building specific program and budget requests. In September, the staff will present a proposed balanced budget to a task force of 75 producers from across the country. Members of the task force review that budget and forward their recommendations to the board for final consideration in November.

For 2013, the board expects to hear requests to continue funding its successful Pork Be inspired branding initiative, which includes national television, internet and magazine advertising.  The board also expects producers to request continued research into sow health issues, feed efficiency and environmental sustainability.

In other action, the board is expected to review its participation in the U.S. Farmers and Ranchers Alliance. The alliance, made up of more than 70 commodity association and businesses involved in production agriculture, is working to improve consumer trust in today's agriculture and to increase the voice of farmers in public discussions answering Americans' questions about how their food is raised.  The board was one of the inaugural funders of the alliance and is represented on the alliance board and executive committee by Dale Norton, a pork producer and National Pork Board member from Bronson, Mich.