Study Finds Pork Producers Receive Return on Investment in USMEF's Market Development Programs

Report quantifies return on investment for Pork Checkoff and USDA FAS.

Published on: Sep 27, 2011

U.S. pork producers are receiving a positive return on their Checkoff investment in international markets through the U.S. Meat Export Federation, according to a study by Dr. Harry Kaiser, the Gellert Family Professor of Applied Economics and Management, at Cornell University.

The economic analysis of USMEF's Export Market Development Programs was commissioned by USMEF to quantify the returns that the U.S. Department of Agriculture's Foreign Agriculture Service and the Pork Checkoff programs received from their investments in USMEF's export market development programs.  The study also quantified the contribution of USMEF's programs to the growth in exports that has occurred over the past decade. Producer investments account for roughly 50% of USMEF's expenditures on export promotion programs and the Foreign Agriculture Service funds account for the other half.

"It's important to producers to understand and quantify the value of their investments," said Craig Christensen, chair of the Pork Checkoff's Trade Committee and a producer from Ogden, Iowa. "The results indicated a positive impact of export market development and promotion on imports of U.S. pork."

Specifically, the study found:

  •  An average annual increase in net pork industry revenue due to USMEF's programs ranging from $39.9 million to $169.7 million
  •  A contribution of 324 million lbs. per year to the growth of U.S. Pork exports over the past 10 years and
  •  A median return on investment of dollars at $7.42 to $1.

The research was conducted using an economic model which utilized statistical procedures to help researchers account for the impact of a variety of factors that affected import demand, including  price of imports of U.S. pork, price of imports of pork from other countries, consumer income in importing countries, exchange rates and USMEF expenditures on pork export market development.

Eight importing regions, accounting for 82% of U.S. Pork exports, were used in the model.  Mexico, South Korea, Hong Kong, EU, Japan, Taiwan, China and Russia Mexico and Japan had the highest gains in imports due to export market development.

The USMEF has been performing market development activities in numerous markets since 1976, with the goal of increasing demand for U.S. Pork by improving product image, increasing market presence, promoting total carcass utilization and providing trade support. Nearly 24% of U.S. Pork and pork variety meat production was exported in 2010.