Beef Board CEO: Return of beef demand is Checkoff’s goal
The CEO of the Cattlemen’s Beef Board says financial hardships connected to the COVID-19 outbreak are hitting all segments of the economy, including the cattle industry. Greg Hanes tells Brownfield the current disparity between high boxed beef prices and low fed cattle prices is because of supply/demand dynamics and current diminished processing capacity.
“Unfortunately, that’s nothing that the [Beef] Checkoff can do, this is something, I think, that the system’s going to have to work itself through and get that plant capacity back up to speed to help push that cattle price up,” Hanes told Brownfield Ag News during a Zoom interview. “It seems like cattle prices had been kind of improving a little bit here, so that’s good,” he added, “so we hope that as the plants are all open and moving forward that that will continue.”
”All aspects of the economy are reeling,” writes Hanes in an op-ed, “and yet beef producers continue to be a strong, resilient breed who weather what life throws at them.”
Wholesale beef prices began trending lower after hitting a peak Wednesday following a steep pandemic related upturn. Although boxed beef prices remain $200/cwt higher than they were a month ago, from Wednesday to Thursday of this week, they fell about $18/cwt.
Checkoff-funded research and promotion is aimed at countering the growing amount of competition beef faces in the protein marketplace, according to Hanes, who has been CBB CEO for about a year.
“Beef demand is returning; it’s not at the peaks where it was, but it’s stabilized and is increasing again,” said Hanes. “And that’s really the goal is to make sure that beef is there front and center and that we’re able to counter any of these other negative headwinds against us.”
Without the Checkoff, Hanes says there would be no coordinated efforts to promote beef and to set it apart from its other competitors.
“I think you would see that beef would really suffer in the marketplace, not only in the U.S., but globally,” said Hanes, “because there just is so much competition.”
Checkoff critics dislike the fact that the Checkoff promotes imported beef as much as domestic beef. Hanes points out that imported beef – most of which goes into fast food hamburger – contributes checkoff funding for promotion of choice beef cuts.
There are two points when the Beef Checkoff is assessed on imported cattle, according to the CBB.
When cattle enter the U.S., the Customs Service collects the federal $1 per head Beef Checkoff, which is remitted to the Cattlemen’s Beef Board (CBB) where it is used for beef promotion and research programs.
The Beef Checkoff is also collected by US Customs on all imported boxed beef. The beef is assessed based on a formula of the live cattle equivalent set by the USDA. The assessment, according to the CBB, is $1 per 592 pounds of carcass weight. That money is sent to the CBB to fund beef promotion and research programs.
“By having the importers pay this we get that extra funding to promote the whole industry,” said Hanes, “and again, it probably has a heavier impact on our U.S. product, you know, a heavier positive impact, which I’m sure the importers don’t necessarily like to hear, but I mean I think that’s really how it operates.”
Hanes says unified, coordinated promotion helps avoid redundancy that would be likely if promotion were left entirely to local entities.
AUDIO: Greg Hanes