US study measures value of Pork Checkoff

25-07-2007 | |

A recently completed study of the economic value of Pork Checkoff programmes has concluded that the returns to producers, on average, substantially outweigh the costs.

The study, conducted by economists at RTI International of Research Triangle, North Carolina, and North Carolina State University, also concludes that the Pork Checkoff has “a significant positive effect on the demand for hogs and pork.”

The peer-reviewed study, called An Economic Analysis of the Effectiveness of the Pork Checkoff Program focuses on the performance of Checkoff programmes between 1999 and 2005. The study is required every five years by the US Department of Agriculture as part of its oversight of the National Pork Board and Pork Checkoff programmes.

Results of the study were presented to members of the National Pork Board during their meeting in St. Louis, Missouri. The study now goes to USDA for its review.

“This research was done by some of the most highly respected agricultural economists, working independently and using the best evaluation methods known to the economics profession,” said Steve Meyer, president of Paragon Economics and a consultant to the National Pork Board.

“The results are reasonable when compared to similar analyses of a broad array of producer-funded Checkoff programmes.”

Increase profitability
The study concludes that based on data from the five years of the study, marginal increases in Checkoff programme expenditures would increase producer profitability, on average.

Specifically, the study’s results indicate an overall marginal benefit-cost ratio – the net return to producers divided by the programme cost – of 13.8, “indicating that producers would gain an additional $13.80 for each additional $1 of programme expenditures.”

Four categories
That ratio is the combined ratio of an analysis of four specific Checkoff expenditure categories: Production research; post-farm research (marketing-chain research); domestic promotion; foreign market development.

Among the four expenditure categories, the study found the highest average benefit-cost ratios for marketing-chain research, followed by foreign-market development.

Related websites:
• US Department of Agriculture (USDA)
• National Pork Board
• RTI International 

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