News Update

News Update
May 1, 2006

Beef Checkoff Accelerates Efforts To Move Supply This Summer

In a near “perfect storm” of market forces this summer, the U.S. beef industry will experience higher costs and lower prices, along with oversupplies of competing proteins, including pork and poultry.

Normal seasonal increases in beef supply will soon be compounded by heavy feedlot placements, due in part to drought in the Southern Plains, as well as higher carcass weights. Additionally, poultry supply has increased, due in part to international avian influenza fears, which has quickly cost the domestic poultry industry as much as two-thirds of its export market.

Competition among proteins will be fierce, but the U.S. beef industry is determined to keep demand for beef as high as possible. A key marketing strategy, funded by the Beef Checkoff Program through the Federation of State Beef Councils, will center on an aggressive summer consumer-advertising and promotional campaign intended to position beef as an irresistible addition to summer menus. The drive, running now through September, will feature radio advertising, attention-grabbing retail promotions, an intensive national public relations push and widespread product sampling in cooperation with major retailers.

The Federation of State Beef Councils will provide expanded support for the summer beef blitz already planned. Last week, the Federation’s producer leaders voted to dedicate $2 million from Federation reserves to the summer beef campaign. State beef councils, who by law keep 50¢ of the $1 per head checkoff allocation, may invest a portion of those funds in the Federation’s national and international efforts.

Larry Jones, a Kansas producer and chairman of the Federation of State Beef Councils, said the states’ contribution will help leverage beef promotional dollars and is a “very good use” of checkoff funds at a challenging time.

“Now is the time to hit the accelerator on our efforts to remind consumers how delicious, healthy and convenient beef is, especially during the summer months,” he explained.

He added that reinforcing positive attitudes about beef can erode the oversupply by building the demand for new products and recipes and helping to keep beef top-of-mind year-round with consumers.

“With limited checkoff dollars, it has been essential that we plan well in advance with most of our national dollars going to long-term investments,” said Jay O’Brien, chairman of the Cattlemen’s Beef Promotion and Research Board (CBB) and a Texas beef producer.

“This strategy has served producers well, with over a 20% increase in demand since 1998. This increase in demand has translated into a corresponding increase of more than $200 per head in the price of cattle sold,” O’Brien continued. “The Federation has been able to dedicate dollars to a shorter-term investment aimed at a period where forecasts show we will have a surplus of beef and fowl. Working together, we can help mitigate short-term supply impacts on our market.”

In a continuation of the highly memorable “Beef. It’s What’s for Dinner” national promotion, the summer marketing drive features retail-level consumer contests for the chance to win a backyard barbecue makeover or high-end product tailgate party and appetizing radio grilling spots in the top 20 to 30 top U.S. markets. There will also be strong, proactive partnerships with major retailers to feature in-store consumer sampling.

Public relations and food communications strategies include satellite TV and radio media tours, national television exposure for The Healthy Beef Cookbook, and special summer recipes and beef promotions on the Food Network’s Web site. The campaign also targets specific cultural markets with news releases and a Spanish-language consumer Web site.

— adapted from a press release by Stephanie Darling, CBB