Slicing and Dicing

This week has been quite a journey for producers who serve on the Cattlemen’s Beef Board and the Federation of State Beef Councils, as they faced a declining checkoff budget head-on and were forced to make dramatic cuts in most program areas – totaling more than $3.2 million overall.

After meetings of State Beef Council executive directors in Denver early in the week resulted in a recommended program outline and budget for Fiscal Year 2009, the producers who serve as chairmen and vice chairmen of the joint checkoff committees raked through the budget numbers, debating passionately to identify the least painful cuts for the coming fiscal year, which begins Oct. 1, 2008. Next came the review by the producers who serve on the Joint Budget Committee, which made additional adjustments to the recommendation from the committee leadership and sent that recommendation to the Operating Committee. This morning, the Operating Committee, members of which listened in on the previous discussions to keep up with all the comments along the way, made a recommendation to adopt the budget from the Joint Budget Committee and forwarded that recommendation to the Beef Board Executive Committee for ratification and forwarding to USDA.

Whew. Yes, that’s a lot of meeting and debate – in fact, nearly 40 hours of meetings in four days. But it leaves no doubt that the outcome is a proposed national checkoff budget that is focused on the priorities of those producers and importers who volunteer on checkoff boards and committees and represent their fellow cattlemen and importers nationwide. Following is a summary of how the numbers fell out according to Beef Board budget components. Although you’ll note a steep decrease in the promotion budget, this recommendation does maintain enough funding for a viable national print and radio advertising campaign within that budget component. Specific project proposals will come before the joint checkoff committees during the summer cattle industry conference in Denver this July.

Emotions High on Low Budget

“If anyone out in the country doubts whether producers are the ones making decisions about how their checkoff dollars are invested, they should be here at this meeting.” Those were the words of Ken Stielow, a producer from Kansas and immediate past chairman of the Cattlemen’s Beef Board, addressing producer leaders of the checkoff during budget meetings in Denver this week. That came near the close of more than eight hours of discussion about the decreasing checkoff budget on Tuesday, kicking off an impassioned producer debate that continues today about where to cut back without diminishing effectiveness of checkoff investments in Fiscal 2009.

Estimated checkoff revenue for FY09 is expected to be down sharply, on the heels of significant cuts in the current fiscal year. The producer leaders in Denver this week include the chairmen and vice chairmen of joint checkoff committees and committee groups, representing the Cattlemen’s Beef Board and the Federation of State Beef Councils. In addition, the members of the Joint Budget Committee, the Beef Promotion Operating Committee, and the Beef Board Executive Committee are here, listening in on the committee leadership discussion, as the recommendations made here today will go next to the Budget Committee, then Operating, then Executive Committee this afternoon and tomorrow, before going up before the full Beef Board and USDA this spring and summer.

Because the checkoff simply cannot stretch to continue all current programs or planned extensions in the coming year, these leaders have a tough job, for sure. Emotions have run high at times, with discussion so far focused heavily on the budget for consumer advertising. Over the years, as the checkoff budget has decreased and all media advertising costs have risen dramatically, it has become increasingly difficult to invest in a “Beef. It’s What’s for Dinner” advertising program that has enough reach and frequency with consumers to be effective. That quandary has reached a degree where these producers have to make painful cuts in other checkoff programs that are integral parts of the overall checkoff strategy toward building demand for beef – or cut advertising back to a degree that it might no longer be viable.

At the end of meetings this week, one way or another there will be a recommendation from the Operating Committee for a budget breakdown by six components – promotion, research, consumer information, industry information, foreign marketing, and producer communications – for Fiscal 2009, which begins Oct. 1, 2008. That budget will not include specific project proposals, as those will come before the joint checkoff committees during this summer’s cattle industry conference, also in Denver. But the reality of what’s to come is setting in, and the debate continues.