Celebrating Your National Beef Checkoff Program:
25 Years and Counting
Cattlemen’s Beef Board • 2011 Annual Report
Your National
Beef Checkoff Program:
25 years and counting
2011
Beef Board
Members
It was 1986: A gallon of gas cost 89 cents; a pound of ground beef cost about $1.29 at retail; the
average price of a home was $89,430; and the national Beef Checkoff Program went into effect at
$1-per-head.
The outlook for the beef industry was bleak. Beef demand was plunging, and consumers were turning
en masse to alternative proteins. But cattlemen lacked the nutrient data and other information they
needed to convince consumers to stick with beef. As a result, prices were bottoming out, and farmers
and ranchers were going out of business at an alarming rate.
“The overriding concern was the dire situation that cattlemen faced in 1985,”
said Jo Ann Smith, who helped spearhead the launch of the national Beef
Checkoff Program and served as the founding chairwoman of the Cattlemen’s
Beef Board. “Numerous times, I would get off of a plane, and I would hear of
another friend who had lost their ranch. Cattle prices were the worst they had
been in 40 years. There was tremendous financial stress on cattlemen and farmers
throughout the U.S.”
Fast forward to 2011: Today, a gallon of gas will set you back an average of $3.26;
the average price for a pound of ground beef is $3.87; the average price of a home
is $303,713; and the $1-per-head national beef checkoff just wrapped up its first
25 years of serving as a catalyst to spur strong beef sales worldwide.
The outlook for cattlemen is quite different today, too. Beef now is the No. 1
selling protein in the United States, with consumer spending on beef reaching
$73.4 million in 2010. More than 85 percent of consumers know the checkoff’s “Beef. It’s What’s for
Dinner” slogan, and consumer sentiment about beef ’s nutritional qualities is more positive than ever.
So how did this monumental change come about?
It was time to take a stand — together
Back in the early 1980s, Smith said, farmers and ranchers were depending on a swiftly disappearing
market for their livelihoods. But no individuals or organizations had the resources and/or expertise to
make the case for beef on their own. A diverse group of cattlemen had already tried twice — in 1977
and again in 1980 — to launch a national checkoff program to build beef demand, only to be turned
down by their fellow cattlemen at the polls both times.
“It seemed like we were fighting one fight after another,” Smith recalled. “We were asking, ‘How are
we going to position ourselves as an industry to be proactive rather than reactive and show consumers
that we have a good product that’s good for you and has the nutrients that people need?’” As times got
increasingly desperate, the idea of a checkoff once again drew interest because it would allow producers
to pool their money for the betterment of the entire industry. The challenge, of course, was finding a
structure that pleased the majority.
“I arrived at a regional meeting in Nevada one day and was pulled into the hallway by some ranchers
who were just at rock bottom,” Smith recalled. “Their financial situation was beyond critical, and their
questions to me were ‘Do you think we can look at another checkoff? And what can we change for it to
be more appealing?’ The issue was that ‘we want to help ourselves,’” she said. “So we went back to the
drawing board.”
2
Eric Smith
Reform
AR
AZ
The impetus: Why a national Beef Checkoff Program?
AL
CA
Grassroots ideas
breed support
To make a long — but very
inspiring — story short, those
driving the checkoff effort
realized that they had
seriously erred by assuming
they understood what
producers wanted from a
checkoff those first two
times around. But, said
Smith, “it was obvious
that we did not.”
So industry leaders banded
producers together to contract with Doane Agricultural Services
for a national survey of beef producers to determine if they wanted a national
checkoff and, if so, how they wanted it structured. The results of that survey
were the basis for the current checkoff program.
That survey helped develop a list of five tenets that the majority of producers
seemed to agree should be the base of a national self-help program for beef:
Everybody, including importers, pays a simple assessment of a dollar per
head or equivalent; state beef councils keep 50 cents of each dollar for
priorities set by producers in their state; producers maintain grassroots
control by requiring that national Beef Board members be nominated by
producers in their state or region; Beef Board administrative expenses
are limited to 5 percent of projected revenues; and the program be
piloted for 18 months before producers voted on it.
After the test-run, 79 percent of producers voting in the 1988 referendum
favored keeping the national checkoff, and today, the rest of those tenets
remain the core of a program that has helped keep the beef industry alive
for 25 years — and counting.
So as you peruse this 25th Anniversary edition of the Cattlemen’s Beef
Board Annual Report, you’ll get a glimpse of what happens when
cattlemen work together to maintain a strong beef industry to
hand down to future generations.
“Our initial vision was very similar to a vision today — that we need to
constantly address how to reach consumers — so I feel certain that it has
accomplished what we envisioned,” Smith concluded. “But can we
improve what we’re doing and do more? Of course. It just takes
everyone working together, as so many people did to make this
program a reality 25 years ago.”
Barbara Jackson
Tucson
Weldon Wynn
Star City
CA
CA
Ted Greidanus
Tipton
CA
Darrel Sweet
Livermore
Jimmy Maxey
Fresno
CA
Manuel Rodrigues
Tipton
CO
Wayne Buck
Ignacio
Jim LeFils
Osteen
ID
Kim Brackett
Castleford
Importer
Ron Allen
Chester Springs, PA
CO
Phyllis Snyder
Cortez
FL
CO
Andy Wick
Austin
Willie Bylsma
Oakdale
FL
Roger West
Gainesville
ID
Dan Hinman
Caldwell
IL
Jeanne Harland
LaFayette
Importer
Importer
Andrew Banchi
Harleysville, PA
Laurie Bryant
Reston,VA
2011 Beef Board Annual Report
3
Importer
25 years of PROMOTION…
and counting
You might remember seeing the television commercials
with actor James Garner touting beef as “Real Food for
Real People” back in the late 1980s and early 1990s, or
Robert Mitchum kicking off the “Beef. It’s What’s for
Dinner” campaign in May of 1992.
After a brief stint with a “Beef. It’s What You Want”
slogan in 1998, the checkoff returned to “Beef. It’s
What’s for Dinner” in 1999, but this time featuring
the deep, powerful voice of cowboy actor Sam
Elliott for nearly a decade. And that brings us to the
checkoff’s latest radio ads, which have tantalized
taste buds for beef since 2007 with a sultry
recognizable voice reminding consumers that beef
is not only good-tasting — but also good for them.
“When the checkoff started, advertising was one of the main reasons why
they wanted to collect the $1 checkoff — a main objective,” says Iowa
beef producer Terri Carstensen. And today, she said, advertising remains
“the umbrella for all of our programs in promotion.”
With its recognition and creative television, radio, print and, more
recently, billboards and online advertising, the checkoff’s promotion
campaign helped first slow the decline, and later turn around consumer
beef demand, which had been spiraling sharply downward in the 1980s.
This reminds us to think about not only where we are today, but where
we would be without these kinds of checkoff-funded efforts.
“Beef. It’s What’s for Dinner” television commercials were a popular
mainstay of the 1990s, and you could often hear folks talking about
the great beef commercials airing during their favorite programs. By the
end of that decade, however, the checkoff backed out of television — if
somewhat reluctantly and warily — as budgets tightened and advertising
prices skyrocketed to four times the rate of the average prices for most
goods and services.
The campaign provides a guaranteed
“
voice for producers to talk to consumers
directly and in an unfiltered way, which
is critical when delivering beef’s health,
nutrition and enjoyment message.
Terri Carstensen
Beef producer
Odebolt, Iowa
”
Dorith Marom
Westport,CT
But with strong creative campaigns, the checkoff managed to maintain
a powerful and effective consumer campaign. That included taglines
like “We love vegetarians – more beef for us!”; “Only one more gram of
saturated fat than a skinless chicken breast? That’s like finding out that
chocolate brownies are as healthy as carrots”; and “Nobody ever left a
cookout wishing there’d been more macaroni salad.” — all flanked by
colorful photos of mouthwatering steaks and other beef dishes.
Of course, consumer advertising is just one of the programs that the
checkoff accomplishes in the area of promotion. Outside of advertising,
some top promotion successes of the checkoff’s first 25 years are
marketing of Beef Value Cuts, including the Flat Iron and Petite Tender
steaks; foodservice partnerships that have garnered as much as $60 in
promotions from restaurant and other foodservice companies for every
checkoff dollar invested; the award-winning foodservice “BEEFlexible”
ad campaign; implementation of the Beef Made Easy program to help
retailers organize their meat cases to maximize beef sales; and veal
promotions that have increased prevalence of veal on restaurant menus.
“So if someone sees the ‘Beef. It’s What’s For Dinner’ ad in the magazine,
then that will drive them either to go to the restaurant for an evening
for an enjoyment experience or the grocery store and grab a steak or a
hamburger and things to have for the grill, or a pot roast for one of your
winter evening meals,” Carstensen said.
Put simply, the checkoff helps keep
beef at the center of consumer plates,
wherever they might be enjoying
their meals.
John O’Carroll
Southlake, TX
Alberto Senosiain
Coconut Creek, FL
KS
Steve Irsik
Ingalls
Will Frazee
Emerson
Larry Oltjen
Robinson
LA
IA
Kent Pruismann
Rock Valley
KS
KS
Danny Herrmann
Dodge City
Brittany Howell
La Crosse
KS
KS
Daniel Kerschen
Garden Plain
KS
IA
Dean Black
Somers
IA
KS
Terry Handke
Muscotah
Stephen Orodenker
Union, NJ
Don Gurtner
Fremont
IA
Jeff Clausen
Carson
Importer
IN
Importer
Genevieve Lyons
Church Point
4
Importer
KY
Roland May
Oberlin
KY
Julianna Jepson
Franklin
Daniel Smith
Stamping Ground
MI
Mid-Atlantic
Andy Salinas
Marion
2011 Beef Board Annual Report
Larry Echols
Gap Mills, WV
5
25 years of
CONSUMER INFORMATION…
and counting
25 years of
INDUSTRY INFORMATION…
and counting
Critical to marketing beef is the understanding that consumer
perceptions — whether scientifically founded or not — are reality when it
comes to the bottom line for beef producers. So beef was declared a villain
in the growing battle against heart disease some 30 years ago, and the beef
industry watched its market shrink, when consumers turned toward chicken
and other non-meat proteins as the low-fat healthier options of the day.
“Industry information” is focused on initiatives that lead to
development of new markets, marketing strategies, increased efficiency
and activities to enhance the image of the cattle industry. And during the
last quarter century, the checkoff has helped producers accomplish this
goal primarily through the Beef Quality Assurance (BQA) program and
what often is referred to as issues management.
Simply put, the beef industry needed to get better information to
consumers so they could make decisions about buying beef based on
facts instead of emotional rhetoric. And with the start of the national
Beef Checkoff Program in 1986, that became possible. The industry
now had the means to increase placement of positive news about beef.
Today, one of the most impressive stories the checkoff is telling
consumers is about expansion of the selection of lean beef cuts. Even at
the start of the millennium, fewer than 10 beef cuts met government
guidelines for “lean.” In 2011, the industry boasts 29 cuts of lean beef
at retail, and the checkoff’s multifaceted “29 Ways to Love Lean Beef ”
food and nutrition communications program helps give healthconscious consumers the “permission” they are seeking to keep
eating the beef they love.
Dave Bateman
Beef producer, Oregon, Ill.
2008 Beef Board Chairman
”
The checkoff delivers this and other consumer ideas and information for
and about beef through a variety of distribution
channels, among them recipes, messages,
spokespeople — including health professionals and
other consumer influencers — media placements,
and tools/materials such as the popular 50-page
Confident Cooking with Beef booklet and the Beef.
It’s What’s for Dinner website. In addition, programs
such as the National Beef Ambassador Program,
the National Beef Cook-Off and, in recent years,
the I Heart Beef campaign and the Masters of Beef
Advocacy (MBA) program, have spread the good
word about beef and the beef industry far and wide
for 25 years… and counting.
6
Paul Kent
Mora
Charles Bassett
Dixon
MO
Howard Hardecke
Springfield
NE
Al Davis
Hyannis
The results speak for themselves: Despite universal awareness of BSE
after the U.S. case, consumer confidence that U.S. beef was safe from
BSE stood at 89 percent on Dec. 23, 2003, but actually rose to
91 percent by Feb. 12, 2004. And that confidence remains solid
through the years, as today the checkoff leads facts-based
conversations about ranchers and beef and corrects misinformation
from anti-meat groups and individuals on a daily basis.
MS
Mike McCormick
Union Church
MO
Brenda Black
Deepwater
MO
Kevin Frankenbach
Hannibal
MT
Leo McDonnell
Columbus
NE
Jim Eschliman
Ericson
NE
When it comes to industry information, however, there may be no more
shining example of success than what followed identification of BSE in a
cow in the U.S. on Dec. 23, 2003. Known as the “Cow that stole Christmas,”
this event stood to annihilate the U.S. beef industry. Fortunately, however,
your Beef Checkoff Program had invested in research and planning for
crises scenarios such as this. It immediately lit up its “dark” information,
myth-busting, science-based BSE website and had experts on hand to
speak directly to frenzied questions from consumers, as well as USDA
and the food industry, about whether they should stop eating beef.
MN
John Schafer
Buffalo Lake
MO
BQA brings together cattlemen, veterinarians, nutritionists, university
extension specialists, feedlot owners and many others to raise consumer
confidence by demonstrating an industrywide commitment to quality within
every segment of the beef industry. As a result, producers who complete
training sessions, pass a national BQA test and agree to adhere to BQA
guidelines often get premium dollars and/or contracts for their cattle.
The reality of it is that we can produce
“
the best product in the world, but if we can’t
convey that to the consumer, then somehow
we’ve failed in the process.
MN
Judy Reece
Valentine
NE
David Wright
Neligh
NM
Tamara Ogilvie
Silver City
NE
Chris Schluntz
Republican City
NV
Annalyn Settelmeyer
Gardnerville
NY
Patty Bikowsky
Madison
2011 Beef Board Annual Report
MT
Jay Stovall
In Memoriam
Dec. 15, 2011
NE
Kristy Lage
Arthur
NE
Lindy Whipps
Max
NM
Wesley Grau
Grady
NC
E.B. Harris
Warrenton
7
ND
25 years of
FOREIGN MARKETING…
and counting
As virtually everyone associated with this industry is aware, beef
exports nosedived after Dec. 23, 2003, upon the immediate
closure of virtually all major U.S. export markets. As managed
by the U.S. Meat Export Federation (USMEF) — the checkoff’s
sole foreign-marketing contractor — money from the Cattlemen’s
Beef Board and state beef councils invested to recover and maintain
these markets is leveraged to at least double strength by matching
funds that USMEF receives from USDA’s Market Access Program
and other checkoff programs that believe selling beef helps sell their
products as well.
Not only has that combined funding help pave the way through the
slow-but-effective recovery from BSE, it also continues to develop new
markets for U.S. beef along the way. And in spite of continuing export
barriers, including the 20-month age limit in Japan, product restrictions
in Hong Kong and Mexico, the impasse over residues in Taiwan,
and the total lack of access to China, the checkoff has helped
build U.S. beef exports back to pre-BSE highs and beyond.
In fact, U.S. beef exports set new record highs in 2011 and
were, at press time, on track to eclipse the $5 billion mark
for the first time ever. Through the first 10 months of 2011,
the value of U.S. beef exports reached $4.49 billion, up a
whopping 37 percent ahead of the record pace established
during the first 10 months of 2010. Bottom line on return:
Exports through October 2011 were valued at $202.82 per head of fed
slaughter — nearly $50 per head higher than the 2010 average of $153.09!
This success in the global market began in the mid-1990s. That’s when
opportunities for beef trade with developing countries were emerging in earnest,
and your national Beef Checkoff Program began focusing some of its investments
in foreign marketing.
of exports…. We have people on the ground in
important countries.
Irv Petsch
Beef producer, Meriden, Wyo.
Today, the checkoff is promoting U.S. beef in more than 80 of the 228 countries
across the globe, and expanding that whenever and wherever opportunity knocks.
And considering that the population of the United States represents just 4.5 percent
of the global population, and there are about 22 times as many hungry mouths to
feed outside of our borders as there are in, the opportunities abound.
8
Some of the key international accomplishments made possible in part by
your checkoff investments include: penetration of critical Asian markets,
including Japan and South Korea, building consumer trust in U.S. beef
and developing business relationships necessary to grow our exports to
those countries; reaching new markets to diversify the presence of U.S.
beef around the world and reduce dependency on any single country;
development of markets for variety meat, offal and muscle cuts that are
underutilized within U.S. borders but hold desire – and draw premium
prices – in places such as the Middle East, Russia, Latin America and
Southeast Asia; and development of specific beef cuts that work well for
trends in international cuisine to satisfy the diverse palates of consumers
worldwide.
Looking ahead, we still have plenty of room
for growth in mainstay markets like Japan
and Korea. We’ve just begun to scratch the
surface in Europe. And if we can gain access
to China, that’s a market that obviously
holds huge potential for U.S. beef. The
idea of checkoff investments in foreign
marketing is to move the roster of potential
beef consumers from the millions to the
billions, and we’re well on our way.
Northwest
Pete Guglielmino
Kettle Falls, WA
OK
Bob Drake
Davis
OK
Brett Morris
Ninnekah
Northeast
Margie Hande
Amidon
Jane Clifford
Starksboro, VT
OK
OH
Davis Denman
Cortland
Terry Detrick
Oklahoma City
OK
Brian Healey
Davis
OK
Andrea Hutchison
Canton
OR
Pat Venable
Klamath Falls
PA
Dan Kniffen
Spring Mills
SD
Danni Beer
Keldron
SD
After BSE, we were able to turn the tide
“
around, and we are back now to pre-BSE levels
”
Woody Barth
Solen
ND
Vaughn Meyer
Reva
Southeast
Craig Kesler
Newberry, SC
SD
Mike Stahly
Cavour
TN
Rob Reviere, Jr.
Ripley
2011 Beef Board Annual Report
PA
Joyce Bupp
Seven Valleys
SD
Linda Gilbert
Buffalo
Southeast
Linda Crumley
Winder, GA
TN
Ronnie Yeargin
Greenfield
9
25 years of RESEARCH…
and counting
Few would argue that the beef industry would be in deep
trouble if not for research that improved knowledge about
things like pathogens to improve beef safety; techniques
incorporated into beef quality assurance to teach cattle
producers to raise leaner, healthier beef; market research to
learn exactly what consumers want from beef; and on-theground product development research to help adjust beef
and beef products to meet constantly changing demands.
25 years of PRODUCER
COMMUNICATIONS…
and counting
“In the past, we just put these steaks we created
into roasts or ground them into hamburger, so we’ve
increased the value of the total carcass with these different
cuts,” said 2011 Beef Board Secretary/Treasurer
Roger West, a cattleman from Florida.
Since 1993, the Beef Checkoff Program also has invested
more than $28 million on beef safety research, outreach
and education. And during the first five years the checkoff
participated in this research, the human incidence of E. coli
O157:H7 dropped 80 percent. Other checkoff-funded research
successes include instrument grading, participation in the Beef
Industry Food Safety Council (BIFSCo), and nutrition research
that proves beef to be one of the most naturally nutrient-rich
foods available.
And thanks in part to this
kind of research, beef once
again has a stronghold
on King-of-the-Plate
status, not only for its
tremendous taste, but also for
its nutritional qualities, versatility,
and safety.
10
Hughes Abell
Austin
Just as it is for any brokerage firm or bank into which you might
invest, it is the obligation of checkoff administrators to keep their
investors — cattle and beef producers and importers who pay the
$1-per-head checkoff assessment — informed about how their
checkoff dollars are invested and, more important, the
Checkoffthis is
Where
of
results of those
investments.
In Your
short,
Key Accomplishments
Dollars Are Invested
Your Checkoff Program
“producer communications.”
TX
TX
TX
Anne Anderson
Austin
Robert Bruner
Huntsville
TX
TX
What Can the Checkoff Do?
Promotion
The Beef Checkoff Program increases profit
opportunities for producers by keeping beef topof-mind with consumers and purveyors, and by
working to ensure a wholesome, quality beef-eating
experience every time. Efforts include:
Includes advertising, merchandising, new-product
development and promotional partnerships with
restaurants and supermarkets designed to stimulate
sales of beef and veal.
Research
Provides the foundation for checkoff-funded
activity. Informational and promotional projects
are developed based on research relating to
nutritional value of beef and beef products, beef
safety and pathogen research, product-enhancement
research, market research and new product
development research.
The Beef Checkoff Program acts as a catalyst for change
and was designed to stimulate the beef supply chain to
sell more beef and stimulate consumers to buy more
beef. This is accomplished through a combination of
initiatives, including consumer advertising, research,
public relations/issues management, education and
new-product development.
Dan Dierschke
Austin
• Working to continue growth in beef demand.
• Funding product-enhancement and beef-safety
research programs to address safety and
quality issues.
• Investing an average of $4 million annually on
beef-safety and product-technology research.
• Delivering beef-enjoyment messages to
consumers through a checkoff-funded national
radio and print advertising campaign.
• Identifying management practices through
Beef Quality Assurance (BQA) to strengthen
consumer confidence in beef as a wholesome,
safe quality product.
• Introducing new products into the marketplace.
From 1996 to 2008, more than 2,500 new beef
products addressing consumer preferences
reached the market.
Consumer Information
Endeavors to enhance beef ’s image through nutritional
data and other positive messages targeted to news
media, food editors, teachers, dietitians, physicians and
other influential individuals and groups.
Bruce Dopslauf
LaGrange
Leroy Ezer
Anahuac
What Can’t the Checkoff Do?
By law, checkoff funds cannot be used to influence
government policy or action, including lobbying. In
addition, the checkoff doesn’t own cattle, packing
plants or retail outlets. It can’t control prices or
single-handedly turn around a bad market.
Over the years, it has come in all forms. Through
brochures and print publications, radio and online
Understanding Your
Beef Checkoff
resources aimed at beef producers, the checkoff shares
Program
stories by way of producer testimonials
from beef and dairy producers
off can eef.”
b
ef check
“My be lth benefits of Rechel
a
Lucy
who pay into the checkoff. In
the he
address
their own words, individual
producers tell what they believe
their checkoff investments do
for their operations.
• Promoting high-quality U.S. beef in foreign
countries.
Over its 25-year history, your beef checkoff has
amassed a long list of research accomplishments that
deserve credit for this kind of progress. But the one
often referenced as the single most effective and farreaching effort that the checkoff has undertaken to
date is Muscle Profiling Research. That in-depth
research evaluated a total of 5,616 muscles to
identify “diamonds in the rough” from muscles that
previously were overlooked and often thrown into
the grinder. The Flat Iron was one of the first Beef
Value Cuts launched into the market, in 2002, and
reached annual foodservice sales of 90 million pounds
a year within five years.
TX
TX
Do Packers Pay?
TX
TX
Any packer who owns cattle for more than 10 days
prior to harvest must pay the dollar-per-head checkoff.
There are no packer seats on the Beef Board.
Do Importers Pay?
Importers pay $1/head equivalent on imported cattle,
beef and beef products.
Adding Value
Industry Information
Strives to promote an understanding of the beef
industry and maintain a positive marketing climate
by helping provide factual information and correct
misleading publicity about food safety, environmental
and animal-welfare issues.
Foreign Marketing
Seeks to identify and develop international markets
for U.S. beef and beef variety meats.
Beef continues to hold its own on the American dinner
table and demand remains strong. In fact, beef demand
increased about 15 percent from 1998 to 2007.
CattleFax, an independent beef industry analyst
and data provider, estimates that the increase in beef
demand since 1998 has added about $250/head to
the price of fed cattle and about $200/head to the
price of calves.
Producer Communications
Aims to inform producers and importers about
how checkoff dollars are being invested and to
communicate program results.
Get to know your checkoff
the — visit
really on
, ;
mybeefcheckoff.com
es what is good for them
ram address
ther it’s
beef council
your
rator or write:
n progcontact
; whestate
No. The Beef Board and USDA must approve all ded beef nutritior food comes from hel, feedyard ope
-fun
Lucy Rec
contractors
anykoff
where thei
says CATTLEMEN’S
checkoff budgets and programs before
BEEF BOARD
“Our chec
ericans — it’s produced,”
Checkoff
ds of Amdollars
how
Suite
are reimbursed for program costs.min
9000 E. Nichols Ave., heal
th215
and
;
safe
and
s
ther it’s n,basis
80112
.
cost-recovery
Centennial,
dietitian COthey
then are paid to contractors on a whe
can share
tial
ngto Nev
, influen Phone:
s that
reimbursed
beYeri
from
only, meaning that contractors may
n message(303) 220-9890
the checkoff
s invest in ible beef nutritio Fax: (303) 220-9280
only for actual costs incurred in implementing
producer
, cred
When beef receive positive
make,”
approved checkoff programs.
nals
s people
Do Contractors Make Money
from the Checkoff?
professio clients.
r
with thei
tial
ng decision
on the eati hing these influen
e impact
reac
have a hug are limited, so stment does.”
ars
essionals
inve
“These prof“And, checkoff doll ct of what our
demand.
build beef
says Lucy. is an important aspe
nals to help
essio
es
audienc
uential prof
aching infl
…re
checkoff
My beef
Rechel
Lucy
pany
stock Com
Snyder Livegton, Nev.
Yerin
re from
Lucy at
ff.com
Checko
MyBeef
TX
www.mybeefcheckoff.com
In addition, your checkoff uses
“earned media” in the form of
weekly and monthly newsletters,
as well as print, audio and video
press releases to hundreds of
ag-media outlets, and participates
in a dozen trade shows aimed at
cattle producers each year. Direct communications include presentations
about checkoff structure and program results for Board members and
other producers to give at beef industry meetings, as well as reports and
other communications with Beef Board and state beef council leadership.
Hear mo
Bryant Fisher
Yantis
Funded by
Daryl Berlier Owen
Amarillo
TX
Larry Pratt
Eliasville
Jackie Means
Van Horn
TX
Andrea Reed
Dodd City
off.
the Beef Check
TX
Rudie Tate
Wellington
VA
Joe Guthrie
Dublin
WI
Alvin Bartz
Shawano
TX
Anne Wirtz
Brenham
With the evolution of communications
technologies during the last 25 years, this
all comes together through a central hub
at www.MyBeefCheckoff.com, where
producers can get or link to
information about their checkoff.
So while producer communications is a very small portion of
the overall checkoff budget — about 4 percent — it is critical
to ensure that the only national self-help program for the
beef industry remains transparent to all of its investors.
Chuck Kiker III
Beaumont
VA
Hank Maxey
Chatham
WI
Randy Geiger
Reedsville
2011 Beef Board Annual Report
UT
Laurie Munns
Snowville
WI
Marty Andersen
New Glarus
WY
Spencer Ellis
Lovell
11
Cattlemen’s Beef Promotion and Research Board
Statements of Assets, Liabilities and Net Assets
Financial Statements as of September 30, 2011 and 2010
Together with Independent Auditor’s Report Thereon
September 30, 2011 and 2010
Independent Auditor’s Report
Board of Directors
Cattlemen’s Beef Promotion and Research Board
We have audited the accompanying statements of assets, liabilities, and net assets – modified cash basis of the Cattlemen’s
Beef Promotion and Research Board (the Board) as of September 30, 2011 and 2010, and the related statements of
revenues, expenses, and changes in unrestricted net assets – modified cash basis for the years then ended. These financial
statements are the responsibility of the Board’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. The 2010 financial statements were not audited
in accordance with Government Auditing Standards. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provides a reasonable basis for our opinion.
(Modified Cash Basis, Note 2)
Assets
In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2011 on our
consideration of the Board’s internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The
accompanying supplementary statements of assessment revenues by state – modified cash basis is presented for purposes
of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a whole.
In connection with our audits, nothing came to our attention that caused us to believe the Board was not in compliance
with the provisions of the Beef Promotion and Research Act of 1985 and the Beef Promotion and Research Order
(the Order) related to the use of funds collected by the Board insofar as they relate to accounting matters, Further, in
connection with our audits, nothing came to our attention that caused us to believe the Board was not in compliance
with the terms of Section 1260.149(f) of the Order, or with the terms of the Agricultural Marketing Service Investment
Policy, which describe the type of instruments in which the Board may invest, insofar as they relate to accounting matters.
However, our audits were not directed primarily toward obtaining knowledge of such noncompliance.
The report is intended solely for the information and use of its management, the Audit Committee, and the United States
Department of Agriculture and is not intended to be and should not be used by anyone other than these specific parties.
Clifton Gunderson LLP
Greenwood Village, Colorado
November 30, 2011
12
2010
Liabilities and Net Assets
Due to State Beef Councils and Other
$
1,517
$
1,659
Net Assets - Unrestricted (Notes 6 and 9):
Designated for future expenses
13,044,165
14,858,410
Designated - Board reserve
4,350,000
3,350,000
2,398,317
1,095,309
Undesignated
19,792,482
19,303,719
Commitments and contingencies (Notes 5 and 8)
Total Liabilities and Net Assets
$ 19,793,999
$ 19,305,378
Statements of Revenues, Expenses and
Changes in Unrestricted Net Assets
As described in Note 2, these financial statements were prepared on the modified cash basis of accounting, which is a
comprehensive basis of accounting other than generally accepted accounting principles in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities, and
net assets of the Board as of September 30, 2011 and 2010, and its revenues, expenses, and changes in unrestricted net
assets for the years then ended, on the basis of accounting described in Note 2.
2011
Cash and Cash Equivalents (Note 3)
$
4,325,154
$
3,329,577
Short-Term Investments (Note 3)
15,443,950
13,944,513
Advance Payment to Contractor (Note 4)
-
2,000,000
Capital Assets, net of accumulated depreciation
of $99,676 and $85,549, respectively
21,488
28,847
Other
3,407
2,441
Total Assets
$ 19,793,999
$ 19,305,378
(Modified Cash Basis, Note 2)
For The Years Ended September 30, 2011 and 2010
Revenues
2011
2010
Assessments (Note 1)
$
41,918,289
$
42,136,014
Interest48,64043,745
Other
196,143
54,718
Total revenues
42,163,072
42,234,477
Expenses
Program Expenses Promotion17,782,30917,372,674
Research5,732,4925,571,678
Consumer Information4,333,5524,256,384
Industry Information3,582,2862,297,946
Foreign Marketing5,929,3625,643,117
Producer Communications1,726,2651,816,072
Program Evaluation156,700218,564
Program Development
204,923
65,694
Total program expenses 39,447,889
37,242,129
Supporting Services USDA Oversight255,941186,108
Administration (Note 5)
1,970,479
1,793,470
Total expenses
41,674,309
39,221,707
488,763
3,012,770
Change in net assets
Beginning unrestricted net assets
19,303,719
16,290,949
Ending unrestricted net assets
$ 19,792,482
$ 19,303,719
The accompanying notes to financial statements are an integral part of these statements.
13
Notes to Financial Statements
September 30, 2011:
(Modified Cash Basis)
Cash
and Cash
Equivalents
Short-Term
Investments
Total
Carrying
Value
Total Fair
Value
$5,922,436
$-
$5,922,436
$5,922,436
Certificates of
Deposit
-
13,942,002
13,942,002
13,922,093
U.S. Government
Securities
-
1,501,948
1,501,948
1,500,117
Less —
Outstanding
Checks
(1,597,282)
-
(1,597,282)
(1,597,282)
Totals for 2011
$4,325,154
$15,443,950
$19,769,104
$19,747,364
September 30, 2011 and 2010
(1) Organization and Operations
The Beef Promotion and Research Act of 1985 (the Act),
approved on December 23, 1985, by the United States
Congress, established a coordinated program of promotion and
research designed to strengthen the beef industry’s position in
the marketplace, as well as to maintain and expand domestic
and foreign markets and uses for beef and beef products.
As provided in the Act, the Secretary of the United States
Department of Agriculture (the Secretary) issued the Beef
Promotion and Research Order (the Order), effective July 18,
1986, which provides the terms and conditions for the Act’s
administration. The Cattlemen’s Beef Promotion and Research
Board (the Board), which was created and approved by the
Secretary to administer the Act, consists of 106 members who
are representatives of the cattle industry in the United States,
including importers. Board members are appointed by the
Secretary.
The program is financed by a $1 per head assessment on
domestic sales of cattle and on imported cattle, beef, and beef
products. The Board, as part of its responsibilities under the
Act and Order, may certify no more than one Qualified State
Beef Council (Council) in each state and authorize that Council
to collect such assessments. The assessments are remitted to
the Councils or the Board. The Board receives one-half of
assessment monies from states with Councils and the Councils
retain the remainder. The Board receives all assessment revenues
from states without Councils and from imported cattle, beef,
and beef products.
Pursuant to the Act, the Board’s expenses for administration
are limited to 5% or less of projected revenues. All remaining
revenues are expended on programs related to promotion,
research and information for the beef industry. The Board
contracts with established national cattle- or beef-industrygoverned nonprofit organizations for the implementation and
conduct of these programs. Under the terms of these contracts,
the entities which receive Board contracts are subject to annual
audits and reviews.
During fiscal years 2011 and 2010, the Board reimbursed the
following industry organizations for program expenses incurred
on approved projects:
Name of Contractor
2011
2010
Meat Importers Council of America
$347,756
$452,056
$36,931,474
$34,639,659
$80,771
$50,084
National Cattlemen’s
Beef Association (NCBA)
American National CattleWomen
The program expenses incurred by NCBA during fiscal
years 2011 and 2010 included reimbursements for costs
incurred under subcontracts with the American National
CattleWomen of $289,208 and $476,615, and the U.S. Meat
Export Federation of $5,929,362 and $5,643,117, respectively.
14
(2) Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared
on the modified cash basis of accounting. Under this method,
certain revenues are recognized when received rather than when
earned and certain expenses are recognized when paid rather
than when incurred. At September 30, 2011 and 2010, there
were assessment receivables of approximately $6,400,000 and
$6,000,000, interest receivables of approximately $11,000 and
$12,000, and accounts payable of approximately $7,300,000
and $7,800,000, respectively, which are not reflected in the
accompanying financial statements. Accounts payable relate
to appropriated expenditures and are included in the net assets
designated for future expenses in the accompanying statements
of assets, liabilities and net assets (Note 6).
As discussed in Note 1, the Board receives one-half of the
assessment monies collected by the Councils and the remainder
is retained by the Councils. The accompanying financial
statements include only the Board’s share of assessment monies
and do not include amounts related to either revenues or
expenses of the individual Councils.
Cash, Cash Equivalents and Short-Term Investments
For purposes of classifying investments, the Board considers all
highly-liquid investments with an original maturity of three
months or less to be cash equivalents. Cash equivalents and
short-term investments are recorded at cost.
Depreciation
Capital assets, which include equipment and leasehold
improvements, are recorded at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of
three to ten years.
Use of Estimates
The preparation of financial statements require management
to make estimates and assumptions that affect certain reported
amounts and disclosures, primarily those estimates included in
the Basis of Accounting disclosure above. Accordingly, actual
results could differ from those estimates.
(3) Cash, Cash Equivalents and Short-Term
Investments
The Secretary has provided that excess cash may be invested,
on a short-term basis, in certificates of deposit insured by the
Federal Deposit Insurance Corporation or obligations of the
United States, U.S. Government agencies or U.S. Governmentsponsored corporations. Cash, cash equivalents and short-term
investments at September 30, 2011 and 2010, by investment
type, are as follows:
Demand Deposit
Account
September 30, 2010:
Cash
and Cash
Equivalents
Short-Term
Investments
Total
Carrying
Value
Total Fair
Value
$3,680,624
$-
$3,680,624
$3,680,624
Certificates of
Deposit
-
11,445,000
11,445,000
11,439,128
U.S. Government
Securities
-
2,499,513
2,499,513
2,501,385
(351,047)
-
(351,047)
(351,047)
$3,329,577
$13,944,513
$17,274,090
$17,270,090
Demand Deposit
Account
Less —
Outstanding
Checks
Totals for 2010
In accordance with the Board’s policy, the demand deposit
account and the certificates of deposit are insured by the Federal
Deposit Insurance Corporation and/or fully collateralized by
U.S. Government securities held at the Federal Reserve Bank in
the Board’s name.
(4) Advance Payment to Contractor
On August 28, 2009, the Board advanced program funding
in the amount of $2 million to its primary contractor, NCBA.
This advance was made to ensure the contractor had the funds
necessary to pay checkoff program expenses prior to billing the
Board for costs incurred. Advance payments are available to
all of the Board’s contractors, although no other contractors
requested an advance during fiscal years 2011 and 2010.
During fiscal year 2011, NCBA repaid the advance.
(5) Administration Expense
The Act limits expenses for the administration of the program
to 5% or less of projected revenues. Projected revenues were
$41,000,000 for 2011 and $41,150,000 for 2010. Accordingly,
the administrative expenses incurred by the Board were limited
to $2,050,000 in 2011 and $2,057,500 in 2010. Administrative
expenses incurred by the Board on the accrual basis (versus
modified cash basis amounts reflected in the accompanying
statements of revenues, expenses and changes in net assets)
were approximately $1,950,000 (4.8% of projected revenues)
in 2011 and $1,800,000 (4.4% of projected revenues) in
2010. Expressed as a percentage of actual revenues, the Board’s
administrative expenses were 4.7% in 2011 and 4.3% in 2010.
The Board has entered into an Administrative Services
Agreement with NCBA whereby NCBA agreed to provide
certain administrative services to the Board in return for
reimbursement of all direct and indirect costs related to the
provided services. During 2011 and 2010, respectively, the
Board paid NCBA approximately $59,000 and $229,000 related
to this agreement.
The Board leases office facilities and equipment from outside
third-parties under operating leases. Payments required under
the leases were approximately $97,000 during 2011 and
$105,000 during 2010. Future annual payments related to the
leases are approximately $95,000 in 2012, $97,000 in 2013,
$100,000 in 2014, $54,000 in 2015 and $4,000 in 2016.
(6) Unrestricted Net Assets
Unrestricted net assets represent amounts currently available for
the use in the Board’s operation in accordance with the Act and
those resources invested in fixed assets. Designated net asset
balances represent tentative plans of the Board for future use of
financial resources, as follows:
Designated for Future Expenses
This balance relates to unexpended program appropriations.
Designated - Board Reserve
On October 6, 2010, the Board has approved the establishment
of a reserve in the amount of $4,350,000 to be used as the
Board may deem necessary, with the approval of the Secretary.
Prior to this date, the reserve was $3,350,000.
Undesignated
As of September 30, 2011 and 2010, $2,398,317 and
$1,095,309 of the net assets had not been designated by the
Board and is available for budgeting to the various program
areas. Of these amounts, $21,488 and $28,847 represent net
assets invested in fixed assets as of September 30, 2011 and
2010, respectively.
(7) Income Tax Status
The Board has received a ruling from the Internal Revenue
Service stating that it is classified as a tax-exempt entity that
engages in activities under the aegis of the United States
Department of Agriculture.
(8) Pension Plan
The Board provides a defined contribution plan for all of its
employees under which annual contributions are provided
based on a percentage of each employee’s salary. Contributions
required and funded by the Board were approximately $120,000
and $118,000 in 2011 and 2010, respectively.
(9) Subsequent Event
Management evaluated subsequent events through November
30, 2011, the date the audited financial statements were available
to be issued. Events or transactions occurring after September
30, 2011, but prior to November 30, 2011, that provided
additional evidence about conditions that existed at September
30, 2011 have been recognized in the financial statements for
the year ended September 30, 2011. Events or transactions
that provided evidence about conditions that did not exist at
September 30, 2011, but arose before the financial statements
were available to be issued, have not been recognized in the
financial statements for the year ended September 30, 2011.
15
Supplementary Statements of Assessment Revenues By State
For the Years Ended September 30, 2011 and 2010
ASSESSMENT REVENUES (Modified Cash Basis)
2011
2010
Qualified State Beef Councils Alabama
$391,848
$388,497
Arizona285,322383,666
Arkansas476,534500,644
California1,704,2761,731,432
Colorado1,651,9221,559,088
Delaware4,5666,086
Florida315,411347,766
Georgia317,478308,660
Hawaii20,59621,271
Idaho789,069758,591
Illinois343,084358,878
Indiana242,663236,330
Iowa1,755,2671,767,938
Kansas3,878,8853,766,190
Kentucky701,259741,203
Louisiana163,644217,395
Maine13,89011,557
Maryland47,47945,091
Michigan260,357257,632
Minnesota713,397719,234
Mississippi383,118369,304
Missouri1,329,1321,384,887
Montana851,928896,725
Nebraska3,568,2423,534,673
Nevada137,399129,536
New Jersey4,9415,061
New Mexico627,241597,076
New York299,525272,508
North Carolina188,048197,992
North Dakota568,096575,828
Ohio305,767309,979
Oklahoma2,208,9932,055,301
Oregon406,192418,983
Pennsylvania394,303397,023
South Carolina89,50279,288
South Dakota1,566,2571,597,356
Tennessee456,271470,955
Texas6,197,6595,806,804
Utah262,192263,285
Vermont55,42943,095
Virginia391,475360,449
Washington538,513535,139
West Virginia
84,561
103,220
Wisconsin712,462704,499
487,399
484,662
Wyoming
Total Qualified State Beef Councils
36,191,592
35,720,777
States Without Qualified State Beef CouncilsAlaska
238
52
Connecticut
11,486
8,296
Massachusetts19,92018,117
New Hampshire
15,765
9,711
Rhode Island
656
466
Total States Without Qualified State Beef Councils
48,065
36,642
Importers
5,678,632
6,378,595
Total Assessment Revenues
$ 41,918,289
$ 42,136,014
Independent Auditor’s Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
Board of Directors
Cattlemen’s Beef Promotion and Research Board
We have audited the statements of assets, liabilities, and net assets – modified cash basis of the Cattlemen’s Beef
Promotion and Research Board (the Board) as of September 30, 2011 and 2010, and the related statements of
revenues, expenses, and changes in unrestricted net assets – modified cash basis for the years then ended, and have
issued our report thereon dated November 30, 2011. As described in Note 2, these financial statements were
prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally
accepted accounting principles in the United States of America. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States. The 2010 financial
statements were not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Board’s internal control over financial reporting as a basis
for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the entity’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a
timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there
is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or
detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control over financial reporting
that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in
internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Board’s financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of
our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the members of the Board and its management, the
Audit Committee and the United States Department of Agriculture and is not intended to be and should not be used
by anyone other than these specified parties.
Clifton Gunderson LLP
Greenwood Village, Colorado
November 30, 2011
See the accompanying independent auditor’s report.
16
17
Your National
Beef Checkoff Program:
25 Years and Counting
One cattleman’s perspective
“I have never once regretted paying my checkoff,” Idaho cattleman and
2001 Beef Board Chairman Dan Hammond said matter-of-factly as he
pondered the 25th anniversary of the national Beef Checkoff Program. “In
my opinion, the beef industry is where it is today — including strong cattle
prices and what our product has become to consumers — in part because of
the checkoff.
“When I served on the Beef Board, I used to ask people, ‘When’s the
last time you took your special girlfriend out for a nice piece of chicken
versus a nice juicy steak?’ People remember things and they celebrate them
with steak,” he said. “So we have always had that on our side. But now
consumers have permission to eat that nice, juicy steak because we have
our checkoff constantly providing new and healthier beef products and
information that people want.”
Dan’s perspective on the history of the checkoff is an interesting one. He has been close to the program in a wide
variety of roles from its beginning. Long before serving on the Beef Board from 1995-2002, he was tied, at least
peripherally, to all three efforts to pass a national checkoff program, because his boss was Bob Rebholtz, founder of
Agri Beef Co. and Snake River Cattle and a key player in passage of the Beef Promotion and Research Act.
“After I joined Bob at Snake River in 1973, he started working on the checkoff effort,” Dan recalled. “He worked
with some other influential cattle people, which eventually culminated in passage of the Act and Order. I had that
association with the checkoff and knew what it meant to get it passed, and then had served as president of the
Idaho Cattlemen’s Association, so when I had the opportunity to get on the Beef Board in 1995, I was very excited.”
18
After serving on the Beef Board, including his year as chairman in 2001,
Dan stayed involved with the checkoff. He served on the Idaho Beef
Council for three years, sometimes writes about checkoff topics in his
“Cattle Feeder Fodder” column on the Snake River Cattle website,
and still attends cattle industry conventions as often as possible.
(He’s that guy you might see jogging down the city streets of Nashville
or Phoenix or San Antonio before the sun rises, when most other
convention-goers are still tucked in.)
Dan believes that Rebholtz, who died in 1997, would be proud of
what the checkoff has accomplished: “Honestly, I believe it is because
of the checkoff that the beef industry is where it is today. I think we are
right on the original vision, and I think it’s all of these new products that
have made beef what it is today,” he said.
Those products represent the result of all of the research the checkoff does, and all of the training and work with
producers in Beef Quality Assurance, and they depend on the promotion efforts and the consumer information to
get the word to the folks we want eating beef. “It all comes together in the end,” Dan said.
Besides being a cattle feeder, a city councilman,
and an avid runner, Dan is a family man
with eight grown children and 35 (yes, 35!)
grandchildren, who saddles up his “city
horse” — a Honda VTX1300 — and rides
the asphalt range when he needs a taste of
tranquility away from it all. And as he retires,
he might be riding those 1300 horses more
often, but one thing is for sure: He said he
will stay involved with his community and the
cattle industry for as long as possible, buoyed
by the checkoff program that he believes will
keep it going for generations to come.
19
MyBeefCheckoff.com
Funded by the Beef Checkoff.
Cattlemen’s Beef Promotion and Research Board
20
9000 East Nichols Avenue, Suite 215 • Centennial, Colorado 80112 • Phone: 303.220.9890 • Fax: 303.220.9280