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Industry Insight: Checkoff Programs Empower Business

Posted by David R. Shipman, Acting Administrator, Agricultural Marketing Service in Conservation Research and Science
Sep 21, 2011

When it comes to expanding market share, increasing revenue and getting the word out about a great product or commodity, checkoff programs prove that there’s strength in numbers. Officially called research and promotion programs, checkoff programs give agricultural producers, importers and other stakeholders in the marketing chain the power to maximize resources while managing risk.

The strategy for increasing or expanding commodity markets takes more cooperation within the industry than competition between individual farms and businesses.  Consumers may not know exactly which farm grows or raises their fruit, beef, cotton or lumber, but they will decide what to buy based on knowledge, quality and availability.

The consumer’s perspective that there is a general uniformity to some commodities serves as the catalyst for many individual farms and businesses to collaborate on a comprehensive, industry-wide strategy to expand markets.  Promoting a commodity as a whole instead of by individual businesses means everyone in the industry benefits through increased sales, consumer awareness and higher overall demand.

Checkoff programs help make that happen.  Completely funded and operated by industry stakeholders, the checkoff programs allow commodity groups to pool resources for advertising campaigns, market research, new product development and consumer education.  They empower the industry chain to establish their own goals and decide for themselves how to best develop new markets and strengthen current markets for specific commodities.  For every $1 spent in a research and promotion program the return on investment can range as high as $18.

USDA’s Agricultural Marketing Service (AMS) oversees the research and promotion programs, which are led by boards of small and large producers, importers and other commodity stakeholders.  Board members, nominated by the industry and appointed by the Secretary of Agriculture, bring a wealth of diverse perspectives and backgrounds to the programs.  Their experience with a variety of operation sizes, production methods, distribution options, and marketing strategies all contribute to the common goal of promoting their commodity to more consumers.

For example, the dairy industry’s “Got Milk?” campaign, originally developed by the California Milk Processor Board (CMPB), has spawned many humorous spinoffs in the 16 years since its launch. The campaign also transcended its original advertising medium, with over 75 products, including toys, posters and clothing carrying its message. It reinforced “milk” as a household name.

Research and promotion programs also identify new uses and strategically tap into new markets. Cotton Incorporated began their Cotton. From Blue to Green® program in 2006 as part of its work for the Cotton Board.  They partnered with an insulation manufacturer to transform used jeans into UltraTouch ™ Denim Insulation.  Not only does this program promote the commodity, it also forges community ties and promotes a less traditional use of their product.  They even sponsor grants for community buildings and partner with organizations like Habitat for Humanity.

Checkoff programs also benefit from unified messaging and cohesive campaigns. Before the National Mango Board was formed, producers and growers competed against each other with varied success.  Now members from around the world share institutional knowledge and ideas with a clear focus and purpose.  By educating consumers on the nutritional value of mangos and using guest chefs to inspire new recipes, producers and importers continue to see market growth.  Consumers now eat nearly six pounds of mangos per person annually compared to just two pounds in 2008 when the board first launched.

There are currently 19 checkoff programs, representing a wide variety of commodities. From the Fabric of Our Lives® (cotton) to the incredible edible egg™, research and promotion programs have expanded and created identities for things we use every day, increasing consumer awareness and expanding markets for many U.S. commodities.

Visit the AMS checkoff site for a list of research and promotion boards administered by AMS at the USDA.