C4-Lanc«tar Farming, Saturday, Saptambar 18,1993
Promotion Committee
CHICAGO, HI. Concerned
about erosion in the buying power
of their checkoff dollars, beef pro
ducer directors on the Beef Indus
try Council (BIC) Promotion
Committee have encouraged
exploration of increasing checkoff
investments.
The move was in the form of a
resolution made by the Promotion
Committee at the National Lives
tock and Meat Board Annual
Meeting, held in Chicago recently.
According to Clark Willing
ham, promotion committee chair
man, there is substantial evidence
that the checkoff has been effec
tive. But that effectiveness is
being challenged by media infla
tion straining limited checkoff
dollars, as well as promotion com
petition from other protein
sources.
.“We’ve demon
strated that we have the
capability to use check
off dollars wisely to
increase demand for
beef,” said Willingham,
a cattleman from Dal
las, Texas. “Research
shows that our promo
tion and information
programs return about
$3.80 for every dollar
invested by producers.”
The national beef
checkoff, which started
in 1986, requires that
producers remit $1 per
head each time cattle
are sold. These funds
are used in national and
state research, promo
tion and information
programs through vari
ous organizations,
including state beef
councils and the Beef
Industry Council.
Butch Van Vcl
dhuizen, a beef and
dairy producer from
Turner, Ore., moved
adoption of the resolu
tion, which was unani
mously passed by the
committee. He said
research has established
the need for more
checkoff-related
programs.
“The beef industry
isn’t close to the $lOO
million in marketing
programs recom
mended in art analysis
conducted two years
ago by the marketing
firm Booz, Allen &
Hamilton,” Van Vel
dhuizen said. “With
supplies of beef and
competing meats pro
jected to increase sub
stantially over the next
several years, we must
be aggressive now to
keep consumer demand
in line with increasing
supplies.”
The successful
advertising placed as a
result of checkoff
investments is one area
that’s being threatened
not only by the chal
lenge of competing
meats, but by media
inflation. According to
BIC Advertising Sub
committee Chairman
Don Sonnier, a beef
producer from Bossier
City, La., spending on
advertising would have
to increase significantly
just to keep pace with
inflation.-
“Just with inflation of media
placements, we would need to
spend $40.8 million this year in
order to keep up with our advertis
ing efforts of six years ago,” Son
nier said. “Our advertising budget
for 1993/94 year is $22.6 million.
"And when you compare that to (
the poultry industry which
spent $37 million in advertising in
1991/92 it’s obvious we must
do more to hold our own in bat
tling to keep our share of the con
sumer’s protein dollar. In fact, in
Louisiana the beef industry has
approved an additional fifty cent
voluntary checkoff above the $1
per head already being collected.”
Sonnier pointed out that
research has demonstrated the
effectiveness of the beef indus
try’s advertising efforts. A study
found that consumers intend to eat
beef 13 percent more often then
they had intended to eat before the
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Assuming these representative
consumers follow through on their
intent to purchase, this would gen
erate a demand for an additional
1.2 billion pounds of beef.
Already successful foodservice
and retail promotions could also
be expanded through an increased
beef checkoff, according to other
beef producers represented on the
BIC. Larry Oltjen, a beef producer
from Robinson, Kan., said part
nerships being created through
beef industry foodservice prog
rams would be expanded and
enhanced with increased funding.
“We’ve created successful part
nerships with Pizza Hut and Wen
dy's through our checkoff efforts,
but we’re just scratching the sur
face," said Oltjen, subcommittee
chairman. “By helping move mil
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al demand for beef. We'd like to
be able to partner with more food
service operators.”
Jane Frost, a beef producer
from San Jon, N.M., and chairman
of the BIC Retail Subcommittee,
agrees that the partnering oppor
tunities that would come with
increased funding would build
beef demand.
“This past year we offered
retailers incentives to increase
their beef advertising, with great
success,” Frost said. “That effort
yielded a $3O return on every
checkoff dollar used to fund the
program. It’s difficult to argue
with that kind of return on
investment”
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Checkoff
“We’ve had to set priorities
based on the level of funding
available,” said Willingham.
"Although our track record in beef
promotion is outstanding, we
could do a more effective job with
expanded funding. In addition, the
BIC has successfully reduced gov
ernance and meetings costs, thus
increasing efficiency. That’s why
our committee is recommending,
through this resolution, that the
industry take immediate steps to
begin a united industry effort to
increase the level of investment in
the beef checkoff.”
In the resolution, the BIC Prom
otion Committee also encouraged
the BIC to challenge other state
and national industry organiza
tions to give the funding area high
priority.
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