According to Executive Director Travis Justice, the Arkansas Beef Council (ABC) has had to get “really creative” with its budgeting in recent years.
“We just closed this fiscal year, and collections under the checkoff program were down 10 percent,” Justice told Ozarks Farm & Neighbor. “Last year, they were down 12 percent, so basically over the last 3 years our receipts have dropped 25 percent in Arkansas, the result of the selloff of cow herds from the drought 2 and 3 years ago.” He said there are signs receipts are stabilizing, “but we’re stabilizing at a level some 20 percent plus below where we have been.”
In fact, nationally, this year marked the lowest level of collections since the program began. The Beef Promotion and Research Program was created by the 1985 Farm Bill and began collections in 1987. It assesses $1 every time an animal is sold, and splits the proceeds between the National Cattlemen’s Beef Board (CBB) and state bodies like ABC. In addition to the ongoing decline in the size of the national herd, Justice said the structure of the cattle industry itself has changed. He explained, “When the program started, the average turn of cattle of 3.5, so average collections on a head was $3.50. It changed hands that many times in its lifetime. Now, that average is closer to 2.5 times, so you have cattle that are being turned over less frequently, and fewer cattle to start with. Add the inflation factors that are built in over 27 years, and the reach of the programs are not as extensive as they were. It’s forced the state beef councils and the national board to be conservative, prudent and selective.”
Justice said they’ve reduced both research funding – the checkoff can only be used on meat research, and not on cattle production – and promotional activities, including paid advertising through mass media. Justice said they’re still maintaining core level projects in some programs with food service, which represents half of all beef sales nationally, but retail has been scaled back. However, they’ve got a big partner to share the load there. “Two-thirds of all the grocery sales in Arkansas are through a Walmart operation,” he said, “so being able to partner with Walmart on promotions doesn’t require a lot of our direct involvement.” ABC also operates educational programs for the state’s youth, such as “Beef in the Classroom” for school-age children and sponsorship of the state’s “Beef Quiz Bowl” and meat judging contests.
Movement out of conventional media advertising has also led the national program to move nearly all of its resources toward social media, and Justice said while it’s been slow, ABC is “getting there; we’ve reworked our websites, we’ve got a Facebook page, and now we’re gradually expanding our contact lists in social media.”
Record high beef prices have presented a challenge and provoked more questions from consumers, but Justice said it hasn’t changed ABC’s message. “We have some materials emphasizing the value,” he said. “If there is some kind of a cushion here, it’s the fact that some of our competing meat prices are also at record levels, so we don’t see the degree of switching between protein products as we have in previous situations like this.” The beef business has also been buoyed by exports, which have been extremely positive and are growing; while there have been no extremely strong signals of reduced domestic demand, marketers are wondering what the price trigger level will be, and Justice said, “We just stay positive with our key messages of nutrition, the enjoyment factor and the health and safety of the product; prices will move as they will.”
