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A Dollar Investment Generates Five-Fold Return

By Richard Thorpe, TSCRA first vice-president

This article was published in the January issue.

I'm not just a rancher. Like all of you, I am a businessman with the goal to deliver the safest, most affordable and delicious beef to consumers everywhere. Like any good businessman working to increase demand for my product, I understand that solid marketing tools help reach and entice consumers, domestically and internationally. Most of you have the same or similar goals.

Thankfully, in the U.S., we have a beef checkoff program that allows our industry to collectively and proactively invest in our own businesses. The checkoff is a producer-funded marketing and research program designed to increase domestic and/or international demand for beef. When we pay our $1 per head into the checkoff, we help to increase beef demand through promotion, research, education and a variety of other marketing tools.

We all know we pay into the checkoff, but we don't always know where this money goes or how it's benefiting our bottom lines. I'd like to help answer some of the most common questions regarding the checkoff, so each of you can be confident that your investment is working for you.

How are checkoff dollars used?
As mandated by law, checkoff dollars must be invested in programs to increase consumer demand for beef and to create opportunities to enhance producer profitability. The act defines 6 program categories: promotion, research, consumer information, industry information, foreign marketing and producer communications. Of the $1 national checkoff, 50 cents stays in Texas and 50 cents goes to the Cattlemen's Beef Board.

Who decides how checkoff dollars are spent?
The Texas Beef Council decides how Texas money is spent. They prioritize checkoff funds to ensure every dollar benefits the Texas cattle industry.

Who serves on the Texas Beef Council?
Texas beef producers serve on the council. The Texas Beef Council consists of 20 members who are nominated by certified nominating organizations, like TSCRA, and then elected by the current board. Members can serve up to 6 1-year terms. A new board is chosen every year.

Certified organizations include TSCRA, Texas Farm Bureau, Texas Cattle Feeders Association, Independent Cattlemen's Association of Texas, Texas CattleWomen, Dairy (as a group), Purebred (as a group), Livestock Markets (as a group), Packers (as a group), and At-Large members. Board members serve without pay.

Who benefits from the beef checkoff?
Producers benefit from the checkoff. The fundamental goal of every checkoff program is to increase commodity demand, thereby increasing the potential long-term economic growth of all sectors of the industry. The overwhelming majority of beef and dairy producers say their beef checkoff has value for them in many ways, according to a Beef Producer Attitude Survey.

Four in 5 producers say the beef checkoff influences beef demand and is of value to them even in a weak economy.

Three in 4 producers say the beef checkoff contributes to the profitability of their operations, is there for them in a crisis and represents their interests.

Two in 3 beef producers believe the checkoff is well managed.

How do I know I'm getting a good return on my $1 checkoff investment?
A 2009 University of Florida study showed that for every $1 invested by producers into the beef checkoff, the industry had a return of $5.55. That's real added value for every producer.

Does the beef checkoff promote natural or organic beef?
The beef checkoff promotes beef. As a matter of policy, it doesn't promote one breed over another, or one operational or production model over another.

Does my investment help to combat activist groups who constantly make false claims about the cattle industry?
Yes. The checkoff helps to develop capable spokespersons armed with scientifically-established facts to counteract the misinformation from activist groups. Checkoff dollars allow us to collectively counteract attacks, something that is difficult to do individually.

How does putting money into export programs help my bottom line?
Checkoff investments into foreign marketing of U.S. beef continue to pay off. The value of exports for the first 7 months of this year came in 9 percent ahead of the 2012 pace. This set a record value of $5.5 billion. Additionally, according to the U.S. Meat Export Federation, checkoff investments into foreign marketing added an additional $237 per fed steer/heifer between January and August 2013.

As the saying goes, "a rising tide lifts all boats." The goal of the checkoff is to raise demand for beef, which benefits all of us. The Texas Beef Council works toward that goal every day, but we couldn't do it without the continued dedication of beef producers who raise the safest, most abundant, affordable, and delicious beef in the world.

"Issues and Policy: Where We Stand" is from the January 2014 issue of The Cattleman magazine.