Committee Approves Beef Checkoff Initiatives For FY2011

More than $42 million wil be spent on national checkoff programs.

Published on: Oct 4, 2010

The Beef Promotion Operating Committee approved investment of the Cattlemen's Beef Board  Fiscal Year 2011 budget of $42.8 million on a total of 42 national checkoff programs and associated costs.

"Our September meeting is always a tough one, because there are certainly more valuable programs than we have funds," said CBB and Operating Committee Chairman Dan Dierschke, a cattleman from Texas. "As a producer, however, I am pleased with the mix of excellent programs in which the Operating Committee chose to invest our checkoff dollars during the coming year.

"I think producers across the country can rest assured that the checkoff plan of work for Fiscal Year 2011 is a highly coordinated and integrated state and national effort that leverages our limited checkoff budget to the greatest extent possible," Dierschke said.

At the 2010 Cattle Industry Summer Conference in July, CBB approved a budget of $40.6 million for Fiscal Year 2011, which begins Oct. 1, 2010. Thanks to current checkoff revenues exceeding projections and an increase in next year's projected revenues, the Operating Committee on Tuesday recommended an amendment that increased that Fiscal Year 2011 budget to the $42.8 million. CBB's FY 2011 budget is 2 percent less than the $43.8 million budget in Fiscal Year 2010 and 20 percent less than just five years ago. The amended budget must be approved by the full Beef Board, as well as the U.S. Department of Agriculture (USDA).

Members of the Beef Promotion Operating Committee – including 10 members of the Cattlemen's Beef Board and 10 members of the Federation of State Beef Councils – met Sept. 20-21 in Denver. Here, they heard presentations of 48 proposals for checkoff funding in Fiscal Year 2011, asked questions about each, then voted on a Fiscal Year 2011 Plan of Work that included 42 of those programs.

The approved plan of work funds promotion, research and information programs and is designed to build demand for beef using national checkoff funds. Contractors whose program proposals were funded – subject to approval by USDA – include the American National Cattle Women, the Meat Importers Council of America (MICA), the National Cattlemen's Beef Association, and the U.S. Meat Export Federation (USMEF). The Operating Committee also reviewed the CBB's program proposal for producer communications, which the Beef Board staff manages in-house.

The approved national checkoff programs for Fiscal Year 2011 include:

• About $18.1 million for promotion, including consumer advertising, retail marketing, foodservice marketing, new product and culinary initiatives; a Northeast Beef Promotion Initiative to build demand in densely populated Northeast states, and veal marketing and communications. Included in the promotion budget is some funding for an early summer grilling season radio and retailer "blowout" and a new product development and innovation program for new fresh beef solutions.
• Nearly $6.7 million for research projects, focusing on a variety of critical issues, including beef safety research, product enhancement research, human nutrition research, and market research. This funding also included $784,400 for a life cycle assessment – or environmental profile – of U.S. beef production.
• More than $4.6 million for consumer information programs, including a Northeast public relations initiative, national consumer public relations, the 2011 National Beef Cook-Off, and nutrition-influencer relations.
• About $3.3 million for industry information projects, comprising the National Beef Ambassador Program, beef and dairy-beef quality assurance programs and dissemination of accurate information about the beef industry to counter misinformation from anti-beef groups and others.
• More than $5.7 million for foreign marketing and education efforts about U.S. beef in the ASEAN region; the Caribbean; Central and South America; the Dominican Republic; Europe; the Middle East; China/Hong Kong; Japan; Mexico; Russia; South Korea; and Taiwan.
• A total of about $1.7 million in Beef Board dollars for producer communications, which includes producer outreach using paid media, earned media and communications through livestock markets.

In addition to the program budget, other costs to operate the national checkoff program in Fiscal Year 2011 include $240,000 for evaluation of checkoff programs; $210,000 for program development; $263,000 for USDA oversight; and about $2 million for administration, which includes costs for all Board and committee meetings, as well as office rental, supplies and equipment, and administrative staff salaries – the total of which is limited to not more than 5 percent of projected revenues.

Proposals that were not approved because of funding shortages include an extension of U.S. beef promotions in South Korea, extensions of veal and foodservice marketing efforts domestically, and a public relations proposal to purchase technology for an instructional beef grilling promotion delivered to consumers via mobile phones.

"We were able to fund more than we thought we might because of slightly higher revenue than projected during the second half of the current fiscal year, and we expect the increase in collections to continue into next year," said CBB Secretary/Treasurer Robert Fountain, a cattleman from Georgia. "But the financial challenges remain significant as costs for carrying out these programs continue to rise, so the relative value of each dollar has diminished dramatically in recent years."

A separate $6.5 million in allocations from the Federation of State Beef Councils will further increase checkoff funding of national programs in promotion, research, consumer information, industry information and foreign marketing.

Programs authorized by the Operating Committee must be approved by USDA before any money can be spent. Each contractor of the Beef Checkoff Program works on a cost-recovery basis and, by law, cannot profit from work they do on behalf of the Beef Board and state beef councils. Each contractor is subject to compliance reviews by CBB and USDA on an ongoing basis.