How quickly things change. Not that long ago, it looked like the golden era of beef production had arrived – we had arrested the decline in beef demand, it looked like global exports would continue to fuel domestic industry growth, and profitability had been consistent.
Now the Beef Promotion Operating Committee has recommended a checkoff budget for the next fiscal year of $45.8 million, a decrease of 6.6% compared with last year, which saw the promotion budget cut by another 12%.
We are now spending less than $20 million/year on beef promotion when national ad campaigns are expected to cost a minimum of $150 million/year. When you listen carefully to those people who sit in the room and make the hard decisions on what to fund, their statements tell the whole story.
Instead of national ad campaigns, they talk about maintaining a visible presence in the least expensive mediums like print and radio. They talk about small increases in foreign marketing when our competitors, who are still outspending us, are increasing their spending in those very markets. As currently constituted, despite all of its previous successes, the beef checkoff is having its effectiveness eroded.
Checkoff funding is simply insufficient to achieve the aims that it once did. We see it all the time where a great business model or product fails because it was simply undercapitalized. That is the very destination that the checkoff is rapidly heading for – a great concept but insufficiently funded. After surviving the constitutional challenges that were brought against it, and after posting such phenomenal gains to the industry, there are seemingly very few people willing to deal with the reality that if trend lines continue, the checkoff is heading for funding levels that are simply inadequate.