Dairy Check Off Programs Show $4.78 To $1 Return
USDA released its analysis of the effectiveness of dairy checkoff programs, showing a cost:benefit ratio of $4.78 of return for every $1 invested in promotion. The results are for 2016, the latest year of analysis.
In 2016, dairy checkoff programs collected a total of $415 million from dairy farmers, importers and consumers. Dairy farmers pay a 15¢/cwt assessment on all milk they sell. Importers pay 7.5¢/cwt assessment on dairy products they bring into the United States, and consumers are assessed a 20¢/cwt fee on fluid milk through the Federal Milk Market Order program.
Not all of the assessments are used for promotion, however, with some moneys used to fund some or all of the National Dairy Council, The Fuel Up to Play 60 and Gen/Youth programs, the U.S. Dairy Export Council and the Innovation Center for U.S. Dairy.
In 2016, the National Dairy Board administered $116.1 million, qualified state and regional promotion groups administered $213 million and the Fluid Milk Processor Promotion Program administered another $94.7 million.
On a product basis, producer-funded fluid milk promotion efforts saw a $4.11 benefit:cost ratio for every $1 expended. For cheese promotion, that number was $4.81, and for butter, a whopping $22.74. The Fluid Processor program showed a benefit:cost ratio of $3.73. The cost:benefit analysis was done independently by Texas A&M University.
To read the entire 2016 Dairy Checkoff report to Congress and accompanying notes, click here.