A3B-Lancaster Farming, Saturday, February 22, 2003
New Study Evaluates Value Of Checkoff Efforts
DENVER, Colo. Cattle pro
ducers are the primary beneficia
ries of increased beef demand,
according to research by a Colo
rado State University professor.
For that reason, the beef checkoff
is a good investment by beef pro
ducers, says researcher Stephen
R. Koontz.
Furthermore, Koontz con
cluded in his white paper, new
products are a key to improved
demand, and beef producers have
a responsibility to help bring
them to market.
Results from the Koontz re
search were shared with the beef
industry at the 2003 Cattle In
dustry Convention and Trade
Show in Nashville, Tenn., Jan. 29
to Feb. 1. The independently pro
duced and funded report was
presented at a committee meeting
Jan. 30.
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Koontz is an economics profes
sor in the Department of
Agricultural and Resource Eco
nomics at CSU. His research
pointed to data that showed a re
cord volume of beef production
in 2002, yet prices that stayed el
evated, as partial proof of his
conclusions.
“The industry should have
seen prices lower than those in
1996 and 1998,” he said. “It did
not primarily because of improv
ing demand.”
Statistics in the report indicat
ed that retailers and processors
are not keeping the recent im
provement in demand all for
themselves, nor did they absorb
the impact of earlier declines in
demand. Demand improved after
1998, Koontz said, and “changes
in consumer demand have been
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passed on to beef producers in
the form of changed cattle
prices.”
Koontz acknowledges that fu
ture distribution of benefits from
increased demand could not be
predicted. “It is tough to say with
certainty how the benefits of im
provements in demand will be
split over longer periods of time,”
he said. “But it is clear that pro
ducers have borne the weight of
the decline and have now seem
some of the benefits of demand
improvement.”
In addition, Koontz indicated
that retailers and processors/
packers had little incentive to
bring new beef products to mar
ket. “Producers need to shoulder
the burden of some of the risk in
this product development arena
and, at a minimum, facilitate the
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work that needs to be done,”
Koontz wrote.
“The successful launch of any
new beef product can lead to an
increased demand for beef, and
improved markets for beef cat
tle,” according to Tracy Brunner,
a cattle producer from Central
Kansas and chairman of the
Joint New Product & Culinary
Initiatives Committee. “Through
their checkoff program and the
R&D Ranch, producers are
transforming consumer needs
into new products, preparation
methods and recipes with maxi
mum consumer appeal. It’s a
win-win situation for consumers
and the industry.” In the end,
Koontz said, it’s important for
cattle producers to be responsible
for investing in new products to
improve demand, as well as the
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tions.
“Producers stand to benefit
from investing in new product
development, which stimulates
demand, which in turn results in
improved farm and ranch beef
animal prices.”
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