New National Check-Off Study Shows Increased Benefits to Canadian Cattle Producers
August 18, 2016 – The Canadian Beef Cattle Research, Market Development and Promotion Agency (the Agency), in partnership with Canfax Research Services is pleased to release a study evaluating the economic benefits from the Canadian Beef Cattle Check-Off.
The study, prepared by Dr. James Rude and Dr. Ellen Goddard, is an update on the 2010 Cranfield Study which had reported results ahead of the 2010 merge of the Beef Information Centre, Canadian Beef Export Federation and the National Check-Off Agency.
The new study reports that on average from 2011/12 to 2013/14, every check-off dollar invested in national research and marketing activities resulted in a benefit cost ratio of 14:1 or $14 of benefit for Canadian cattle producers. This is up from the $9 average between 2005 and 2008. In addition, the average benefit cost ratio grew steadily between 2011 and 2014. This implies that despite positive benefits, there has been under-investment in research and marketing activities for the Canadian beef cattle industry.
Newly elected Agency Chair Linda Allison is confident that setting goals based on the study results will ensure that the industry moves forward together.
“The 14:1 benefit seen from each National Check-Off dollar confirms the value of producer investment,” said Allison. “However, with the declining purchasing power of the National Check-Off and reduced marketings in recent years, under-investment is evident. It is imperative that we continue to find ways to optimize the return for our producers across the country.”
The change in benefit cost ratio for research, overseen by the Beef Cattle Research Council dropped from $46 to $34.50 during 2005 to 2008, while marketing, managed by Canada Beef, had a benefit cost ratio of $13.50, up from $7.55 in the previous study.
Generally, an inverse relationship exists between the amount of money spent on a promotion or research activity and its marginal benefit cost ratio. It is this diminishing marginal return that helps explain why as investment has increased for research over the past five years, that the benefit cost ratio has declined, just as marketing dollars have declined and the benefit cost ratio has increased.
While the Canadian Beef Cattle Check-off provides the core industry funding for research and marketing programs, it does not fully cover the costs of all programs and activities. Supplementary funding is obtained by leveraging the Canadian Beef Cattle Check-off, attracting on average $3 for every $1 for research and $1 for every $1 for marketing between 2011/12 and 2013/14.
Melinda German, General Manager of the Agency, spoke highly of the research and marketing organizations responsible for investing check-off dollars.
“The work that the Beef Cattle Research Council and Canada Beef carry out, continues to show great returns for our industry,” German said. “By ensuring a sustained and increasing benefit cost ratio, we can continue to work towards common industry goals laid out in the National Beef Strategy.”
The Agency is dedicated to continually monitoring the benefit cost ratio of the National Check-Off through ongoing studies, and ensuring that extra value is derived from producer check-off and import levy investments.
Along with the full study from Dr. Rude, the Agency and Canfax Research Services developed two supplementary documents to pinpoint the highlights of the study and how they are applicable to the Canadian beef industry.
To learn more about the study and to view the supplementary documents, please click below:
2016 National Check-Off Study – Fact Sheet
2016 National Check-Off Study – Q & A
2016 National Check-Off Study – Full Report
The Canadian Beef Cattle Research, Market Development and Promotion Agency manages the Canadian Beef Cattle Check-Off. Through the National Check-Off, Canadian beef cattle producers collectively invest in research, market development and promotion to achieve the industry’s long-term vision of a dynamic and profitable Canadian beef industry, with Canadian high-quality beef products recognized as the most outstanding by Canadian and world customers.
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For more information, please contact:
Tayla Fraser
Manager, Corporate Affairs
tfraser@canadabeef.ca
(403) 275-5890