S OYBEAN C HECKOFF R ETURN ON I NVESTMENT A NALYSIS 1980/81-2006/07 USB/QSSB P ARTNERSHIP W ORKSHOP S T. L OUIS, M ISSOURI J UNE 1, 2009 S OYBEAN C HECKOFF

SOYBEAN CHECKOFF RETURN SOYBEAN CHECKOFF RETURN ON INVESTMENT ANALYSISON INVESTMENT ANALYSIS

1980/81-2006/071980/81-2006/07

USB/QSSB PARTNERSHIP WORKSHOPUSB/QSSB PARTNERSHIP WORKSHOPST. LOUIS, MISSOURIST. LOUIS, MISSOURI

JUNE 1, 2009JUNE 1, 2009

SOYBEAN CHECKOFF RETURN SOYBEAN CHECKOFF RETURN ON INVESTMENT ANALYSISON INVESTMENT ANALYSIS

1980/81-2006/071980/81-2006/07

USB/QSSB PARTNERSHIP WORKSHOPUSB/QSSB PARTNERSHIP WORKSHOPST. LOUIS, MISSOURIST. LOUIS, MISSOURI

JUNE 1, 2009JUNE 1, 2009

Dr. Gary W. WilliamsDr. Gary W. WilliamsDr. Oral Capps, Jr.Dr. Oral Capps, Jr.Dr. David A. BesslerDr. David A. BesslerTexas Agribusiness Market Research CenterTexas Agribusiness Market Research CenterTexas A&M UniversityTexas A&M UniversityCollege Station, TexasCollege Station, Texas

Dr. Gary W. WilliamsDr. Gary W. WilliamsDr. Oral Capps, Jr.Dr. Oral Capps, Jr.Dr. David A. BesslerDr. David A. BesslerTexas Agribusiness Market Research CenterTexas Agribusiness Market Research CenterTexas A&M UniversityTexas A&M UniversityCollege Station, TexasCollege Station, Texas

Research ObjectivesResearch Objectives

TWO KEY QUESTIONSTWO KEY QUESTIONS

1. What have been the effects of the1. What have been the effects of the soybean checkoff program on U.S soybean checkoff program on U.S and world soybean and product and world soybean and product markets?markets?

2. Has the soybean checkoff program2. Has the soybean checkoff program benefited soybean producers?benefited soybean producers?


FIRST KEY QUESTIONFIRST KEY QUESTIONHave Soybean Checkoff Have Soybean Checkoff DEMAND PROMOTION DEMAND PROMOTION

EXPENDITURES EXPENDITURES Shifted Out the Demand for U.S. Shifted Out the Demand for U.S. Soybeans and Soybean Products?Soybeans and Soybean Products?

HIGHERHIGHERDEMANDDEMAND

DemandDemand Supply

Sales

Price

HIGHERHIGHERPRICEPRICE

HIGHERHIGHERSALESSALES


FIRST KEY QUESTIONFIRST KEY QUESTIONHave Soybean Checkoff Have Soybean Checkoff PRODUCTION RESEARCH PRODUCTION RESEARCH

EXPENDITURES EXPENDITURES Shifted Out the Supply of Shifted Out the Supply of Soybeans and Soybean Products?Soybeans and Soybean Products?

HIGHERHIGHERSUPPLYSUPPLY

Demand SupplySupply

Sales

Price

HIGHERHIGHERSALESSALES

LOWERLOWERPRICEPRICE


FIRST KEY QUESTIONFIRST KEY QUESTION

What Have Been the Net Effects on What Have Been the Net Effects on Soybean and Soybean and Soybean Product PricesSoybean Product Prices … …

HIGHERHIGHERSUPPLYSUPPLY

DemandDemand SupplySupply

Sales

Price

HIGHERHIGHERPRICEPRICE

LOWERLOWERPRICEPRICE

Sales

Price

HIGHERHIGHERDEMANDDEMAND

Clearly sales increase …Clearly sales increase …

but price could go upbut price could go up or down!or down!??


FIRST KEY QUESTIONFIRST KEY QUESTION

What Have Been the Net Effects on Soybean and What Have Been the Net Effects on Soybean and Soybean Product Prices …Soybean Product Prices …

U.S. Exports …U.S. Exports …

If checkoff programs increase foreign If checkoff programs increase foreign demand, U.S. supply, or both, then U.S. demand, U.S. supply, or both, then U.S. soybean exports should increase.soybean exports should increase.

If checkoff programs increase price, thenIf checkoff programs increase price, then foreign soybean exports should alsoforeign soybean exports should also increase. increase. But U.S. export share could go But U.S. export share could go

up or down.up or down.

and Foreign Exports? and Foreign Exports?


SECOND KEY QUESTIONSECOND KEY QUESTION

Has the Soybean Checkoff ProgramHas the Soybean Checkoff ProgramBenefited U.S. Soybean Producers?Benefited U.S. Soybean Producers?

Two reasons that might prevent producers Two reasons that might prevent producers from benefiting:from benefiting:Two reasons that might prevent producers Two reasons that might prevent producers from benefiting:from benefiting:

1. There are many “free riders” who capture some of the benefit without paying any of the cost.


Foreign

Foreign

Foreign

Foreign

ForeignForeign

ProducersProducers

ExportersExporters

ProcessorsProcessors

U.S.U.S.

U.S.U.S.

U.S.U.S.

Oil and Meal Product Retailers

Wholesalers and Fabricators

Wholesalers and Fabricators


Benefits from checkoff programs must Benefits from checkoff programs must ““trickle down” to producers …trickle down” to producers …

… … and along and along the way ……the way ……

… … some of the some of the benefits are benefits are captured by captured by others in the others in the supply chain.supply chain.


SECOND KEY QUESTIONSECOND KEY QUESTION

Has the Soybean Checkoff ProgramHas the Soybean Checkoff ProgramBenefited U.S. Soybean Producers?Benefited U.S. Soybean Producers?

Two reasons that might prevent producers Two reasons that might prevent producers from benefiting:from benefiting:Two reasons that might prevent producers Two reasons that might prevent producers from benefiting:from benefiting:



2. The promotion and research programs could cost more than they return back to producers.

2. The promotion and research programs could cost more than they return back to producers.


Even if producer revenues increase as a Even if producer revenues increase as a result of promotion, the important question result of promotion, the important question is:is:

Do producer revenues increase by more than the cost of checkoff

programs?ProducerRevenueIncrease

Cost ofCheckoffPrograms


Even if producer revenues increase as a Even if producer revenues increase as a result of promotion, the important question result of promotion, the important question is:is:

Or do checkoff programs cost more than the increase in producer revenues

achieved?Cost of

CheckoffPrograms

Producer Revenue Increase

Research MethodologyResearch Methodology

A three-step process:A three-step process:

Step 1:Step 1: Statistical procedures to Statistical procedures to isolate isolate and and measuremeasure the specific effects of the specific effects of checkoff expenditures on U.S. and foreign checkoff expenditures on U.S. and foreign soybean, soybean oil, and soybean meal soybean, soybean oil, and soybean meal demand and on U.S. soybean supply.demand and on U.S. soybean supply.

MEASURING THE RETURN TO PRODUCERS FROM THE SOYBEAN CHECKOFF PROGRAM


U.S. and Foreign Demand EquationsU.S. and Foreign Demand Equations(Soybeans, Soymeal, and Soyoil)(Soybeans, Soymeal, and Soyoil)

D = f(P, PO, Income, Checkoff $ Spent, Other)D = f(P, PO, Income, Checkoff $ Spent, Other)



Step 1:Step 1: Statistical procedures to Statistical procedures to isolate isolate and and measuremeasure the specific effects of the specific effects of checkoff expenditures on U.S. and foreign checkoff expenditures on U.S. and foreign soybean, soybean oil, and soybean meal soybean, soybean oil, and soybean meal demand and on U.S. soybean supply.demand and on U.S. soybean supply.



U.S. Soybean Acreage and Yield EquationsU.S. Soybean Acreage and Yield Equations

A = f(P, PO, Farm Policy, Checkoff $ Spent, Other)A = f(P, PO, Farm Policy, Checkoff $ Spent, Other)

Y = f(P, Checkoff $ Spent, Other)Y = f(P, Checkoff $ Spent, Other)



Step 2:Step 2:(a)(a) Build a world soybean and products Build a world soybean and products model (model (SOYMODSOYMOD) that includes the effects ) that includes the effects of the checkoff expendituresof the checkoff expenditures

(b)(b) Use SOYMOD to simulate the level of Use SOYMOD to simulate the level of world market supplies, demand, prices, and world market supplies, demand, prices, and trade that would have existed trade that would have existed “without” “without” the the checkoff program and compare to actual checkoff program and compare to actual history.history.



SOYMOD: World Soybean and Products ModelSOYMOD: World Soybean and Products Model




Step 3:Step 3:Use the SOYMOD simulation results toUse the SOYMOD simulation results tocalculate:calculate:(1)(1) the effects of the soybean checkoff the effects of the soybean checkoff program on U.S. and world soybean and program on U.S. and world soybean and soybean product markets and trade.soybean product markets and trade.

(2)(2) the return on investment to soybean the return on investment to soybean producers from the checkoff program.producers from the checkoff program.






Benefit-Cost AnalysisBenefit-Cost Analysis

The is the calculated increase in sales revenues generated by the program

The is the calculated increase in sales revenues generated by the program

BCRBCR =BCRBCR =Total Checkoff ExpendituresTotal Checkoff ExpendituresTotal Checkoff ExpendituresTotal Checkoff Expenditures

BENEFIT-COST RATIO (BCR)BENEFIT-COST RATIO (BCR)

divided by the total level of checkoff expenditures over the life of the program.

divided by the total level of checkoff expenditures over the life of the program.

DATADATA

Two Sets of Data Required for this Analysis Two Sets of Data Required for this Analysis for 1980/81-2006/07:for 1980/81-2006/07:

1. Market Data – U.S. and Foreign Markets1. Market Data – U.S. and Foreign Markets-- Soybeans, Soybean Oil, Soybean MealSoybeans, Soybean Oil, Soybean Meal-- Supply and DemandSupply and Demand (Acreage, yields, production, stocks, consumption, etc.)-- Prices and TradePrices and Trade

2. Soybean Checkoff Expenditure Data2. Soybean Checkoff Expenditure Data-- Production Research Expenditures Production Research Expenditures

(1970/71-2006/07 with a 4-year Gap)-- International Market Promotion ExpendituresInternational Market Promotion Expenditures (1970/71-2006/07: Pieced together by country, region, commodity, and contributor from data provided by FAS (USDA), ASA, and USSEC)-- Domestic Promotion ExpendituresDomestic Promotion Expenditures

(1994/95-2006/07: Pieced together by commodity from data provided by QSSBs and USB Contractors)

Promotion and Production Research Expenditures, 1970-2006Promotion and Production Research Expenditures, 1970-2006

Soybean Checkoff ExpendituresSoybean Checkoff Expenditures

Source: Expenditure data obtained from United Soybean Board, American Soybean Association, and the U.S. Soybean Export Council

International Promotion

Promotion and Research Shares of Checkoff Expenditures, 1970-2006Promotion and Research Shares of Checkoff Expenditures, 1970-2006


percent


International Promotion

Checkoff Expenditures as a Percent of Soybean Cash Receipts, 1970-2006Checkoff Expenditures as a Percent of Soybean Cash Receipts, 1970-2006


percent


International Promotion Expenditures by Contributor, 1970-2006International Promotion Expenditures by Contributor, 1970-2006



Contributor Share of International Promotion Expenditures, 1970-2006Contributor Share of International Promotion Expenditures, 1970-2006


percent


Note that 3rd Party

Contributions have dried up

Regional Share of International Promotion Expenditures, 1970-2006Regional Share of International Promotion Expenditures, 1970-2006percent



Commodity Share of International Promotion Expenditures, 1970-2006Commodity Share of International Promotion Expenditures, 1970-2006percent



Domestic Promotion Expenditures by Commodity, 1994-2006Domestic Promotion Expenditures by Commodity, 1994-2006

Source: Expenditure data obtained from United Soybean Board


Production Research Expenditures by Type, 1978/79-2006/07Production Research Expenditures by Type, 1978/79-2006/07

Source: Expenditure data obtained from Keith Smith and Associates through the United Soybean Board.


Four-year Four-year GAP when GAP when

data was not data was not compiledcompiled



millions $

Production Research Expenditures by Region, 1978/79-2006/07Production Research Expenditures by Region, 1978/79-2006/07






Source: Expenditure data obtained from Keith Smith and Associates through the United Soybean Board

millions $

mil. bu.

Annual Changes in U.S. and Regional Soybean Production from Annual Changes in U.S. and Regional Soybean Production from Soybean Checkoff Program, 1980/81-2006/07Soybean Checkoff Program, 1980/81-2006/07

Annual Changes in U.S. and Regional Soybean Production from Annual Changes in U.S. and Regional Soybean Production from Soybean Checkoff Program, 1980/81-2006/07Soybean Checkoff Program, 1980/81-2006/07

Effects of Soybean Checkoff ProgramEffects of Soybean Checkoff Program

percent

Regional Share of Change in U.S. Soybean Production from Regional Share of Change in U.S. Soybean Production from Soybean Checkoff Program, 1980/81-2006/07Soybean Checkoff Program, 1980/81-2006/07

Regional Share of Change in U.S. Soybean Production from Regional Share of Change in U.S. Soybean Production from Soybean Checkoff Program, 1980/81-2006/07Soybean Checkoff Program, 1980/81-2006/07


EffectsEffectson U.S. on U.S. Soybean Soybean Markets,Markets,1980/81-2006/071980/81-2006/07

EffectsEffectson U.S. on U.S. Soybean Soybean Markets,Markets,1980/81-2006/071980/81-2006/07

1980-91 1992-2006 1980-2006Average Change In: 1,000 acres % 1,000 acres % 1,000 acres %U.S. Soybean Planted Acres Cornbelt 700.6 2.3 1,096.3 3.3 920.4 2.9

Delta 243.9 2.8 184.8 3.1 211.1 3.0 South 338.0 5.3 206.1 6.1 264.7 5.6

Plains 256.8 4.4 714.0 6.4 510.8 5.8 Lakes 266.1 4.3 425.3 4.6 354.6 4.5 Atlantic 135.1 3.3 78.2 2.6 103.5 3.0

Other 17.9 5.6 35.0 6.4 27.4 6.1

Total 1,958.4 3.2 2,739.8 4.1 2,392.5 3.7

mil. bu. % mil. bu. % mil. bu. %U.S. Soybean Production Cornbelt 27.9 2.7 55.6 4.0 43.3 3.5 Delta 6.9 3.7 6.3 3.6 6.6 3.7 South 8.5 6.0 6.4 6.2 7.3 6.1 Plains 7.4 4.6 25.9 6.7 17.7 6.2 Lakes 9.1 4.4 16.7 4.8 13.3 4.7 Atlantic 3.4 3.7 2.4 2.8 2.8 3.2 Other 0.6 5.9 1.3 6.5 1.0 6.3 Total 63.8 3.5 114.5 4.6 92.0 4.2

U.S. Soybean Crush 24.6 2.3 77.5 5.3 54.0 4.2

1,000 tons % 1,000 tons % 1,000 tons %

U.S. Soybean Meal Consumption -214.7 -1.1 881.8 3.1 394.4 1.6

mil. lbs. % mil. lbs. % mil. lbs. %U.S. Soybean Oil Consumption -37.9 -0.4 512.7 3.4 268.0 2.0

$/unit % $/unit % $/unit %

U.S. Wholesale Soybean and Product Prices

Soybean ($/bu) 0.15 2.4 0.06 1.0 0.10 1.6

Soymeal ($/ton) 9.38 5.0 -0.31 -0.2 3.99 2.1 Soyoil (cents/lb) 0.44 2.1 -0.39 -1.7 -0.02 -0.1 Crush Margin ($/bu) 0.13 14.6 -0.11 -7.7 -0.01 -0.4


Average Change In: 1980-91 1992-2006 1980-2006

1,000 mt % 1,000 mt % 1,000 mt %World Soybean Imports EU-15 754.4 5.9 444.9 3.0 582.4 4.2

Japan 107.8 2.4 100.9 2.2 104.0 2.3 Rest of the world 340.3 6.0 1,035.9 4.8 726.8 5.0

Total 1,202.5 5.3 1,581.7 3.8 1,413.2 4.3

World Soybean Exports

United States 1,040.0 5.6 956.6 4.0 993.6 4.6

Brazil 141.7 6.8 419.3 3.5 295.9 3.9 Argentina 20.8 0.9 205.8 4.0 123.6 3.2 Total 1,202.5 5.3 1,581.7 3.8 1,413.2 4.3

World Soymeal Imports EU-15 1,147.2 15.1 620.2 3.8 854.4 6.9 Japan 71.1 23.2 55.8 5.7 62.6 9.2 Rest of the world 14.0 0.2 794.4 5.5 447.6 3.9 Total 1,232.3 7.6 1,470.4 4.7 1,364.6 5.5

World Soymeal Exports United States 727.2 14.8 873.8 15.3 808.6 15.1 Brazil 441.6 5.7 540.2 4.9 496.4 5.2 Argentina 63.5 1.8 56.4 0.4 59.5 0.6 Total 1,232.3 7.6 1,470.4 4.7 1,364.6 5.5

World Soyoil Imports Japan 0.3 3.9 -13.6 -47.1 -7.4 -39.0 Rest of the world 241.7 9.3 283.8 4.7 265.1 5.9

Total 242.0 9.3 270.1 4.5 257.6 5.7

World Soyoil Exports (000 mt)

United States 138.4 23.9 158.8 24.1 149.8 24.0 Brazil 49.0 6.9 36.4 2.3 42.0 3.5 Argentina 13.5 2.1 12.7 0.4 13.0 0.6 EU-15 41.0 6.1 62.2 13.6 52.8 9.6

Total 242.0 9.3 270.1 4.5 257.6 5.7

change % change % change %

United States 0.4 0.5 0.0 0.1 0.1 0.3 Brazil 0.1 1.1 0.0 0.2 0.1 0.6 Argentina -0.5 -4.4 0.0 0.6 -0.2 -1.7

United States 2.0 7.1 1.8 11.3 1.9 9.4 Brazil -0.9 -1.7 0.1 0.2 -0.3 -0.6 Argentina -1.2 -4.6 -1.8 -4.2 -1.5 -4.4

United States 3.2 19.8 2.0 26.4 2.5 23.4 Brazil -0.4 -0.3 -0.5 -1.8 -0.5 -1.2 Argentina -2.2 -5.8 -2.1 -4.3 -2.2 -5.0 EU-15 -0.7 -1.3 0.7 5.9 0.1 2.7

EffectsEffectson U.S.on U.S.SoybeanSoybeanand Productand ProductExports,Exports,1980/81-2006/071980/81-2006/07

EffectsEffectson U.S.on U.S.SoybeanSoybeanand Productand ProductExports,Exports,1980/81-2006/071980/81-2006/07


Average Change In: 1980-91 1992-2006 1980-2006

1,000 mt % 1,000 mt % 1,000 mt %

EU-15 754.4 5.9 444.9 3.0 582.4 4.2

Japan 107.8 2.4 100.9 2.2 104.0 2.3 Rest of the world 340.3 6.0 1,035.9 4.8 726.8 5.0

Total 1,202.5 5.3 1,581.7 3.8 1,413.2 4.3

United States 1,040.0 5.6 956.6 4.0 993.6 4.6

Brazil 141.7 6.8 419.3 3.5 295.9 3.9 Argentina 20.8 0.9 205.8 4.0 123.6 3.2 Total 1,202.5 5.3 1,581.7 3.8 1,413.2 4.3

EU-15 1,147.2 15.1 620.2 3.8 854.4 6.9 Japan 71.1 23.2 55.8 5.7 62.6 9.2 Rest of the world 14.0 0.2 794.4 5.5 447.6 3.9 Total 1,232.3 7.6 1,470.4 4.7 1,364.6 5.5

United States 727.2 14.8 873.8 15.3 808.6 15.1 Brazil 441.6 5.7 540.2 4.9 496.4 5.2 Argentina 63.5 1.8 56.4 0.4 59.5 0.6 Total 1,232.3 7.6 1,470.4 4.7 1,364.6 5.5

Japan 0.3 3.9 -13.6 -47.1 -7.4 -39.0 Rest of the world 241.7 9.3 283.8 4.7 265.1 5.9

Total 242.0 9.3 270.1 4.5 257.6 5.7

World Soyoil Exports (000 mt)

United States 138.4 23.9 158.8 24.1 149.8 24.0 Brazil 49.0 6.9 36.4 2.3 42.0 3.5 Argentina 13.5 2.1 12.7 0.4 13.0 0.6

Total 242.0 9.3 270.1 4.5 257.6 5.7

change % change % change %

United States 0.4 0.5 0.0 0.1 0.1 0.3 Brazil 0.1 1.1 0.0 0.2 0.1 0.6 Argentina -0.5 -4.4 0.0 0.6 -0.2 -1.7

United States 2.0 7.1 1.8 11.3 1.9 9.4 Brazil -0.9 -1.7 0.1 0.2 -0.3 -0.6 Argentina -1.2 -4.6 -1.8 -4.2 -1.5 -4.4

United States 3.2 19.8 2.0 26.4 2.5 23.4 Brazil -0.4 -0.3 -0.5 -1.8 -0.5 -1.2 Argentina -2.2 -5.8 -2.1 -4.3 -2.2 -5.0 EU-15 -0.7 -1.3 0.7 5.9 0.1 2.7

change % change % change %Exporter Share of Soybean Imports United States 0.4 0.5 0.0 0.1 0.1 0.3 Brazil 0.1 1.1 0.0 0.2 0.1 0.6 Argentina -0.5 -4.4 0.0 0.6 -0.2 -1.7

Exporter Share of Soymeal Imports United States 2.0 7.1 1.8 11.3 1.9 9.4 Brazil -0.9 -1.7 0.1 0.2 -0.3 -0.6 Argentina -1.2 -4.6 -1.8 -4.2 -1.5 -4.4

Exporter Share of Soyoil Imports United States 3.2 19.8 2.0 26.4 2.5 23.4 Brazil -0.4 -0.3 -0.5 -1.8 -0.5 -1.2 Argentina -2.2 -5.8 -2.1 -4.3 -2.2 -5.0 EU-15 -0.7 -1.3 0.7 5.9 0.1 2.7

EffectsEffectson U.S. on U.S. SoybeanSoybeanand Soy and Soy ProductProductExportExportShares,Shares,1980/81-2006/071980/81-2006/07

EffectsEffectson U.S. on U.S. SoybeanSoybeanand Soy and Soy ProductProductExportExportShares,Shares,1980/81-2006/071980/81-2006/07


Effects of Soybean Checkoff ProgramEffects of Soybean Checkoff ProgramChange in Regional Production, 1980/81-2006/07Change in Regional Production, 1980/81-2006/07

mil.bu.

Change in Soybean and Product Demand, 1980/81-2006/07Change in Soybean and Product Demand, 1980/81-2006/07mil.bu.

Percent Change in U.S. Prices, 1980/81-2006/07Percent Change in U.S. Prices, 1980/81-2006/07%

1,000 mt Change in U.S. Exports, 1980/81-2006/07Change in U.S. Exports, 1980/81-2006/07

Soybean Soybean CheckoffCheckoffROI ROI Analysis,Analysis,1980/81 –1980/81 –2006/072006/07

Benefit-Cost Ratio CalculationBenefit-Cost Ratio Calculation 1980-1991 1992-2006 1980-2006

Added Soybean Cash Receipts ($ million) 7,700.2 11,833.4 19,533.7

Soybean Checkoff Investmenta ($ million) 234.8 511.0 745.8

Revenue Benefit-Cost Ratio (RBCR) ($/$Invested) 32.8 23.2 26.2

Cost of Production ($/acre)

Total 179.71 239.88 213.14

Variable cash expenses 60.44 79.48 71.02 All other (capital, land, etc.) 119.27 160.40 142.12

Cost of Production ($/bu) Total 5.87 6.25 6.08 Variable cash expenses 1.97 2.07 2.03 All other (capital, land, etc.) 3.90 4.18 4.06

Cost of Added Production ($ million) Total 4,148.8 9,901.3 14,050.1 Variable cash expenses 1,399.3 3,256.2 4,655.5 All other (capital, land, etc.) 2,749.5 6,645.0 9,394.6

Net Revenueb ($ million) 3,551.4 1,932.2 5,483.6

Grower Profit Benefit-Cost Ratio (PBCR) ($/$invested) 15.1 3.8 7.4

Grower Net Profit Benefit-Cost Ratio (NBCR) ($/$Invested) 14.1 2.8 6.4

Discounted NBCRc (DBCR) ($/$Invested) 5.4 1.0 2.4

6.46.4

Major ConclusionsMajor Conclusions

returned $6.4 in additional profit $6.4 in additional profit to U.S. soybean farmers for every dollar invested.

increased the size and profitabilitysize and profitability of the U.S. soybean industry.

reduced the competitive threat competitive threat of the South American soybean industry.

THE SOYBEAN CHECKOFF PROGRAM HAS …THE SOYBEAN CHECKOFF PROGRAM HAS …

supported soybean and product prices each year by an average of 2% above what the prices would have been without the checkoff program.

boosted the annual level of soybean, soymeal, and soyoil exports boosted the annual level of soybean, soymeal, and soyoil exports by an average of 5%, 15%, and 24%, respectively.

acted as a countercyclical forcecountercyclical force in the soybean industry, reducing the severity of market downturns in bad years and adding to growth and profitability in good years.

Implications for Program ManagementImplications for Program Management

The U.S. soybean industry is underinvestingunderinvesting in soybean checkoff programs!

Things to think about when deciding onThings to think about when deciding on how much to spend for what and where:how much to spend for what and where:

The current mix of expenditures is reducing the potential returnreducing the potential return!

Decision to no longer leverage international promotion expenditures with Third Party Contributions is also reducing the reducing the potential returnpotential return!

More demand pulldemand pull (domestic and international promotion) relative to supply pushsupply push (production research) needed.

More international promotioninternational promotion relative to domestic promotiondomestic promotion needed.

More soymeal/soyoilsoymeal/soyoil promotion relative to soybeansoybean promotion needed.

Neglect of large, mature marketslarge, mature markets is also reducing returns.

Implications for Program ManagementImplications for Program Management

A record-keeping system for checkoff expenditure data across contractors and across QSSBs is desperately needed.

- It took us 4-5 months just to find, compile, and prepare the historical data on checkoff expenditures before we could even begin our analysis.

- We still ended up with big holes in much of the data because critical data was not preserved.

- Nobody’s “fault.”

- There is just no systematic process in place to warehouse the expenditure data for evaluation purposes.

- Remember: the results of an evaluation of the checkoff program can be no better than the data.

Last, but certainly not least…Last, but certainly not least…

Documents

S OYBEAN C HECKOFF R ETURN ON I NVESTMENT A NALYSIS 1980/81-2006/07 USB/QSSB P ARTNERSHIP W ORKSHOP S T. L OUIS, M ISSOURI J UNE 1, 2009 S OYBEAN C HECKOFF