Pig farmers receive 25:1 ROI from Pork Checkoff
DES MOINES, IA – U.S. pork producers received a positive return on their Checkoff investment, according to a 2017 study conducted and released by Harry Kaiser, the Gellert Family Professor in the Dyson School of Applied Economics and Management, Cornell University.
Additionally, 91 percent of pig farmers who took part in the annual producer survey in November acknowledge their overwhelming support of the Pork Checkoff, with a record-low opposition of just 3 percent.
An economic analysis of Pork Checkoff programs is commissioned every five years by the National Pork Board. The study quantifies the returns generated by Pork Checkoff investments in research, pork promotion and producer education programs. The latest results, published in 2017, cover 2011 to 2016 programs.
“It’s important to producers – those who directly fund the Pork Checkoff – to understand and quantify the value of their investments,” said Terry O’Neel, National Pork Board president and a pig farmer from Friend, Nebraska. “The results indicate a positive impact of all aspects of the Pork Checkoff, from conducting production-focused research to growing consumer and export demand for pork.”
Specifically, the study documented a growing return on investment through defined benefit-cost ratios across several key program areas from 2011 to 2016:
- Production Research: Each dollar invested in production research to benefit on-farm practices yielded $83.30 in producer value.
- Foreign Market Development: Each dollar invested in developing foreign markets yielded $24.70 in producer benefits.
- Advertising and Non-advertising Promotion: Other pork promotion resulted in benefits of $14.20 for advertising and $12.40 for non-advertising promotion.
- Research to Grow Demand: Research on market drivers returned $8.30 for each $1 invested.
- Net Result: Collectively, the overall return of Checkoff program activities is $25.50 for each dollar invested.
The U.S. Department of Agriculture requires a return on investment analysis every five years. The 2001 to 2006 study showed an overall return of $13.80 to $1 invested, and the most previous study, released in 2012 for the time period of 2006 to 2011, found a return of $17.40 to $1 invested.
“This analysis provides a comprehensive review of program development, and more importantly, efficiency of our Checkoff program administration,” O’Neel said. “The net return of 25 to 1 on Checkoff investments demonstrates that we are meeting producer needs in the areas that drive sustainable production and grow consumer demand.”