Study: U.S. meat export promotion pays off
U.S. beef, pork, corn and soybean producers are receiving a solid return on their checkoff investments in the U.S. Meat Export Federation’s (USMEF) export market development programs, according to a recent study.
The study, completed recently by Cornell University professor Harry Kaiser, found that every dollar invested in these programs during the past 10 years returned an average of $15 in net revenue for the pork industry and $8 to the beef industry.
USMEF commissioned the study, An Economic Analysis of the U.S. Meat Export Federation’s Export Market Development Programs, to quantify the returns that the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) and the beef, pork, corn and soybean checkoff programs receive from their investments in USMEF’s export market development programs. The independent study was funded by the USDA and Kaiser, who is also director of the Cornell’s Commodity Promotion Research Program, was chosen from several researchers who proposed to do the research.
“It is clear that U.S. beef and pork export market development and promotion programs have had a significant and positive impact on meat export net revenue,” Kaiser said.
The economic model showed that combined producer and USDA marketing expenditures increased U.S. red meat exports by more than 30 percent per year. According to Kaiser, “this increase in exports due to export market development translated to between $46.3 million (for beef) and $85.7 million (for pork) in average annual extra net revenue to the industry, which is far higher than the average annual $27.5 million cost invested by producers and the USDA.”
The study determined that reducing export promotion and development program funding by 75 percent between 1995 and 2010 would have reduced U.S. beef exports by 36.1 percent and U.S. pork exports by 30.1 percent, a total export loss equal to almost 537 million pounds per year for the eight top foreign markets analyzed in the model. The value of that loss was determined, then compared to total beef and pork export promotion cost to calculate a series of benefit-to-cost ratios (BCR).
The overall BCR for USMEF market development programs had median values of 3.87 for beef and 7.42 for pork. This means that the average return to meat producers on each $1 invested by them and the government in market development activities in international markets was $3.87 for beef and $7.42 for pork.
“Because producers contributed approximately half of the total dollars spent on export marketing, the median BCRs for their half of the spending averaged between 7.74 (for beef) and 14.84 (for pork) times their investment, which are very high returns,” Kaiser said.
Kaiser also looked at the regional impacts of these programs and found two of the most important markets for U.S. meat exports, Mexico and Japan, had the highest gains in imports due to export market development. Collectively, USMEF programs in these two countries accounted for 373 million pounds per year in increased exports of U.S. beef and pork.
The 22-page study report is available online.
Study: U.S. meat export promotion pays off
