the beef checkoff: where we’ve been and where we’re going
TRANSCRIPT
The Beef Checkoff:Where we’ve been and where we’re going
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Beef Checkoff History
• Beef checkoff programs in the U.S.
date back to 1922 … when the
assessment rate was 5¢ a carload
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Beef Checkoff History
• Voluntary state programs
• Referendum in 1977
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Referendum in 1977
• Complicated
• Value-added assessment
• Voting at ASCS offices
• Required two-thirds majority
• Failed (56.6%)
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Referendum in 1980
• Reduced assessment
• Required simple majority
• Targeted 30,000 “joiners”
• Failed (34.6%)
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Prior to 1985 Farm Bill
• Surveyed producers –
ask what they wanted
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What Producers Wanted
• Everybody pays/simple assessment
– No free rides
• Grass-roots Control
– States keep 50 cents
• Producer Control
– Nominated by fellow producers
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What Producers Wanted
• Cost-effective program– Limit on administrative expenses
• Test run to see if it works– 18-month test period before voting
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Referendum in 1988
• Simple assessment ($1 per head)
• Voting at Extension offices
• Required simple majority
• Passed (79%)
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Today’s Beef Checkoff Program
• Established as part of the 1985 Farm Bill
• Became mandatory via national referendum vote by producers in 1988
• States retain 50 cents on the dollar; forward 50 cents to Beef Board
• CBB administers program, subject to USDA approval
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Where Checkoff Dollars Come From
$1 per head invested by about 900,000 beef, dairy & veal producers – $72.1 million
$1-per-head equivalent invested by importers – $7.6 million
$1 per head invested by producers in five states without beef councils – $44,000
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Program Definitions
• Promotion
• Research
• Consumer Information
• Industry Information
• Foreign Marketing
• Producer Communications
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Beef Checkoff Guidelines
• No lobbying
• No Unfair or Deceptive Practices
• No reference to a brand or trade name
of any beef product without Beef Board
and USDA approval
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Beef Checkoff Guidelines
• No expenditures that
relate primarily to
live cattle production
or marketing – must
be directly related
beef or beef products.
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Coordinated Programs
• Nationwide industry
• Global marketplace
• Operating Committee combines
state and national leadership
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2008 Beef Industry Contractors
National Cattlemen’s Beef Association
National Livestock Producers Association
American National CattleWomen
U.S. Meat Export Federation
Meat Importers Council of America
American Veal Association
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Key Beef Checkoff
Accomplishments
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“Beef. It’s What’s for Dinner”
86 percent of consumers recognize tagline
New campaign celebrates “The Power of
Protein in the Land of Lean Beef.”
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Muscle Profiling
• Analyzed more than 5,500
muscles from chuck and
round
• Found several muscles
traditionally ground had
potential for higher-value
steaks
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44%
50%
19%
4%
0%
10%
20%
30%
40%
50%
60%
Rib Loin Chuck Round
Primal Values - 2007 vs 1992
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New Product Development
• More than 2,500 new products since 1998
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Beef Nutrition, Education
• Nutrition &
Beef:
Developing
a positive
relationship
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Leaner than Ever!
29 beef cuts meet
government guidelines
for “Lean” – including
favorites like tenderloin,
T-bone and 95% lean
ground beef.
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Leaner than Ever Before!
• Comparing 3-ounce cooked servings, these cuts have only 1.2 grams more saturated fat than a skinless chicken breast yet less total and saturated fat than the same size serving of a skinless chicken thigh
• Research shows lean beef can play the same role as skinless chicken or fish in a cholesterol-lowering diet
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Beef Quality Audit
• National Beef Quality Audit in 1991 said industry was
leaving $279.82 per carcass on the table due to:
– waste (fat)
– insufficient muscling
– taste (palatability, marbling, maturity and gender)
– management (hide defects, carcass and liver pathology, tongue
infection, injection sites, bruises, dark cutters, etc.)
– carcass weight.
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Beef Quality Audit
Follow-up audits in 1995 and 2000
showed reductions in waste from
$279.82 per animal in 1991 to
$104.92 per animal in 2000!
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Beef Quality Assurance
2005 BQA audit:
Focused on identifying needs for
BQA/producer education efforts
vs. comparison, but still found:
• 6-percent increase in cattle grading Choice or
higher and 3 percent increase in yield grades 1
and 2.
• Significant reductions in brands, bruising and
horns
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Safety Research & Intervention
• Since 1993, checkoff has invested more than $35 million in beef-safety research
• Today, checkoff-developed food safety systems are used in processing of 90% of fed cattle in the U.S. and can reduce bacteria during processing by 99.99 percent
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Foodservice Partnerships
• Over six years, the beef checkoff allocated $2.4 million
to foodservice partnerships, while partners invested
$138.6 million
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Food Communications
• Reach consumers more than 1 billion times a year by providing editors with recipes, photos and beef facts
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Checkoff Results?
What does it all mean for the beef industry?
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Evaluation
• Specific outcomes
• Measurable
• Achievable
• Relevant
• Time bound
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Beef Demand Index
1. USDA per capita beef supplies
2. USDA Choice retail prices
3. Adjustment for inflation based on Consumer Price Index
4. Fixed relationship between beef price and quantity demanded, called elasticity
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100.00
94.19
87.9986.27
83.26
79.1976.41
70.3269.38
65.8364.6062.59
59.6358.08
56.0855.0853.25
50.6750.2751.94
53.4755.9355.21
58.39
62.9160.71
57.3757.87
1980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007
0
10
20
30
40
50
60
70
80
90
100
Annual Beef Demand Index
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Beef Demand
All told, Cattle-Fax estimates that the
increase in consumer demand for beef
since 1998 has added about $250 per
head to the price of fed cattle and about
$200 per head to the price of calves
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Consumer Confidence
Percent confident U.S. beef is safe from BSE
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Beef SafetyPrevalence of E. coli O157:H7 in Ground Beef
00.10.20.30.40.50.60.70.80.91
95 96 97 98* 99** 00 01 02 03 04 05 06 07
Per
cen
t P
osi
tive
s
First BIFSCo Meeting Held
Jan. 2003
* and ** indicate a change to more sensitive sampling and methodology
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Carcass Value
• New products created through
muscle profiling contributed to
a $60- to $70-per-head
increase in value of the chuck,
and new products represent 28
percent of demand growth
since 1998
- Cattle-FaxFlat Iron $5 - $6 lb
Chuck Roast 99¢/lb
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Consumers Responding!
More than 20,000 restaurants have offered
Beef Value Cuts and about 10,000 U.S.
supermarkets are offering them – nearly
double the 5,000 offering them in 2005
and up from just 321 in 2003
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Consumer Expenditures on Beef
90 91 92 93 94 95 96 97 98 00 01 02 03 04 05 06
YEARS
35
40
45
50
55
60
65
70
75
BIL
$
Source: USDA & Cattle-Fax
99 07
Reco
rd $74 b
illion
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Accountability• Producers in the U.S. are the investors
and hold all contractors accountable for expenditures
• Important to follow procedures set by the Beef Board through USDA and the CBB Executive Committee
• Two important rules include checkoff acknowledgment and brand or trade name references
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Acknowledgment
• Critical to acknowledge funding source or sources so investors realize return on investment
• Simple “Funded by the Beef Checkoff” with Beef Check Logo with domestic use
• USMEF has a variance for multi-species international marketing
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Beef Checkoff Acknowledgment
• With the realization that the Beef Check Logo may not have particular meaning in some international arenas, it is adequate for multi-species promotional and educational materials in these markets to appear with USMEF’s U.S. Meat logo.– If, however, the materials are used in presentation in the U.S., the Beef
Check Logo and tagline must be used.
• If another funding source, such as pork or MAP funding, is recognized with a separate logo, then the Beef Check Logo must also be included, though the domestic tagline is not required. – Must be at least as prominent in size and location as other logos.
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Beef Checkoff Acknowledgment
• The “American Beef Club” logo may be used in place of the Beef Check Logo in international markets if no other protein logos are used.
• The “High Quality American Beef” logo is appropriate for use in place of the Beef Check Logo when the nature of the activity requires use of only one logo.
• When no other species’ logo is used but the activity is jointly funded by beef and pork, for example, the tagline “Funded by U.S. beef and pork producers” or similar wording may be used, and the Beef Check Logo omitted.
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Brand & Trade Name References
• Any reference to brand or trade names
where beef checkoff dollars are invested
must be approved by the Beef Board and
USDA
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Looking Ahead
What can we do better?
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Long Range Plan 2010
• Increase demand 10% by 2010
• Become a net exporter in terms of value by 2010
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Enhancing the Checkoff
• USDA asked Beef Board to gather ideas
• CBB Administration Subcommittee will make recommendations to CBB Executive Committee by November 2008
• Full Beef Board will vote on recommendation from Executive Committee in January 2009
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