Setting Priorities for Checkoff Dollars

The Operating Committee meeting here in Denver is making for a busy week, with extensive discussion about setting priorities for use of checkoff dollars in Fiscal 2008 and thereafter.

The meeting began with an orientation for producers who sit on the Operating Committee, including information about the duties, fiduciary responsibilities, and processes in place for the Beef Board, in general, and the committee, in particular. Representatives of USDA explained the role of its Agricultural Marketing Service in reviewing and approving all budgets and programs recommended for approval by the Operating Committee.

CBB Director of Evaluation Rich Otley presented the Beef Demand Index, noting a decline in the Index of 5.9 percent for 2006 compared to 2005. He reminded that the Beef Demand Index takes into account retail prices but not wholesale. With the increased beef activity at retail and foodservice levels, as today’s consumers increasingly eat their meals away from home, those wholesale prices play a growing role in true beef demand, so the Index may reflect a more dramatic drop than other demand calculations might suggest.

In fact, Otley said, the Joint Evaluation Committee recently revitalized the Beef Demand Study Group that originated the Demand Index. That group will meet again in April to review the basis for the Demand Index and determine if it is still a reasonably sound trend marker.

In other action on Wednesday, the Operating Committee received an overview of results from the checkoff’s semiannual Producer Attitude Survey and from the survey of 8,002 beef producers that USDA contracted with The Gallup Organization to complete in November of 2006. The results were remarkably similar in their findings — in fact, few statistical differences were apparent in responses to questions that appeared in both surveys. For example, about 70 percent of producers in the checkoff survey said they approve of the Beef Checkoff Program, on par with the 72 percent who said the same in the survey that Gallup conducted.

Bob Ludwig of The Hale Group also addressed the Operating Committee on Wednesday, suggesting a set of guiding principles for strategic planning. As the committee heads into planning for Fiscal 2008, he noted, it needs to be certain to reevaluate at all turns the basis for its strategies and avoid getting stuck in any “as-we’ve-always-done-it” ruts.