In the 1996 Commodity Promotion, Research, and Information Act, Congress delegated to the United States Department of Agriculture (USDA) the responsibility for implementation and oversight of commodity, promotion, and consumer information programs, commonly known as “checkoff” programs. As part of their oversight, USDA’s Agricultural Marketing Service (AMS) requires commodity boards to conduct an independent evaluation of the effectiveness of their programs every five years.
For these studies, Dr. Harry Kaiser, the Gellert Family Professor of Applied Economics and Management at Cornell University, evaluated the effectiveness and impacts of national Beef Checkoff promotion, education, and research activities for the most recent five-year period (2021-2023), as well as the broader impacts of the Beef Checkoff to the general U.S. economy for the past year (2023).
Central Objectives
- To measure whether national Beef Checkoff demand-driving activities increased demand of beef products (domestic and abroad) compared to what would have occurred in the absence of these activities.
- To measure the combined benefits of national Beef Checkoff demand-driving activities in terms of their incremental financial impact to beef industry (producers and importers), and then compare these benefits with the costs of the program to calculate an overall return on investment (ROI) of the national Beef Checkoff program.
- To measure the indirect benefits of national Beef Checkoff demand-driving activities to the broader macroeconomy.
To estimate the impact of the national Beef Checkoff program, in terms of additional benefits and industry returns, a market simulation model was used to calculate an average return on investment (ROI). For this study, the average ROI measured the incremental financial impact to producers and importers for each $1 invested1 in national Beef Checkoff demand-driving activities2.
What were the impacts of the national Beef Checkoff on beef demand3 and for those producers and importers who pay into the program?
- Had there not been any national Beef Checkoff demand-driving activities over the most recent five-year period (2019–2023), total domestic beef demand WOULD HAVE BEEN 2.4 BILLION POUNDS (8.5%) LOWER per year than actual results.
- Had there not been any national Beef Checkoff program funds (along with other foreign marketing expenditures) spent on export demand-driving activities4, U.S. beef export demand WOULD HAVE BEEN 372 MILLION POUNDS (11.5%) LOWER per year than actual results in the seven major importing countries5 included in this study.
- Had there not been any national domestic demand-driving activities from 2019–2023, the steer price WOULD HAVE BEEN 7.8% LOWER per year than actual results.
- For every national Beef Checkoff program dollar invested1 in domestic and export demand driving activities for the most recent five-year period (2019–2023), the program had a positive effect on beef demand, resulting in a total financial impact of $13.41 BACK TO PRODUCERS and IMPORTERS who pay into the program.
The national Beef Checkoff’s impact on employment, labor income, value added, gross domestic product (GDP), and tax revenue creation was calculated with an input-output model called Impact Analysis for Planning (IMPLAN), which estimated the broader impacts of the national Beef Checkoff’s demand-driving activities.
What was the direct effect of the national Beef Checkoff to the beef industry6?
The percentages for domestic beef demand (8.5%) and U.S. beef exports (11.5%) were used to calculate the national Beef Checkoff’s contribution to the incremental increase in total revenue to the beef industry. Applying these percentages indicated the direct effect of the national Beef Checkoff added an incremental $3.3 BILLION to the beef industry in 2023.
The $3.3 billion incremental amount was achieved by higher domestic sales volume (8.5%) and higher export volume (11.5%) due to national Beef Checkoff domestic and export demand-driving activities.
What were the indirect effects of the national Beef Checkoff to the broader general economy?
The direct effect of the national Beef Checkoff adding an incremental $3.3 BILLION to the beef industry had positive indirect effects to the broader economy7, including:
- Increases in U.S. employment by almost 47,000 PEOPLE.
- Increases in U.S. employment income by $2.1 BILLION.
- Increases in total value added by $4.2 BILLION in the U.S.
- Increases in U.S. GDP by nearly $9.5 BILLION.
In addition, the existence of the national Beef Checkoff also increased tax revenue at the federal, state, and local levels. In 2023, this amounted to:
- $34 million in county tax revenue
- $205 million in state tax revenue
- $504 million in federal tax revenue
Grand Total: $743 million in total tax revenue.
- The $1 invested refers to national Beef Checkoff program dollars that were allocated to demand-driving activities from 2019-2023 by the Beef Promotion Operating Committee, a 12-member body of appointed producers and importers.
- The term “demand-driving activities” refers to national Beef Checkoff programs that influence beef demand such as promotion, education, trade servicing, and influencer activities as well as research projects.
- Beef demand is the relationship between the price of beef and the quantity of beef purchased.
- Funds expended on export demand-driving activities include national Beef Checkoff program funds as well as contractor-acquired contributions and government monies (USDA/FAS), which are referred to as “other foreign marketing expenditures” in this study.
- Importing countries include Mexico, Japan, South Korea, Taiwan, Hong Kong, China, and the European Union as they collectively represent the major destinations for U.S. beef exports.
- The term beef industry refers to producers and importers who pay into the program.
- The term broader economy refers to the U.S. economy, which encompasses the beef industry (i.e., producers and importers), input supply industries that benefit from increased purchase of inputs and services from the beef industry, and macroeconomic outputs.
