Dairy checkoff more than paid for itself in 2011

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The dairy checkoff more than paid for itself in 2011, according to USDA’s annual report to the House Committee on Agriculture and the Senate Committee on Agriculture, Nutrition and Forestry. The program’s benefit-to-cost ratio for fluid milk was calculated to be $3.95 for every dollar invested; for cheese, $4.43 for every dollar invested; and for butter, $6.26 for every dollar invested between January 1 and December 31, 2011.

Dairy checkoff partnerships formed by Dairy Management Inc. (DMI) have a positive impact on sales, particularly DMI’s partnership with Domino’s Pizza between 2009 to 2011, which shows the benefit-to-cost ratio of $7.70 for every checkoff dollar invested. This compares to a benefit-to-cost ratio of 3.9 for the entire checkoff before such partnerships began. 

In addition to the partnership return, dairy export promotion activities conducted by the dairy producer-created U.S. Dairy Export Council generated a 6.1 percent increase in dairy exports on a fat basis, and a 3.1 percent increase on a skim solids basis. The benefit-to-cost ratio for export promotion was 8.12 on a fat basis, and 15.9 on a skim solids basis.

Texas A&M University economists conducted an independent econometric analysis on the effectiveness of the programs implemented by the checkoff. It is estimated that the generic fluid milk marketing activities sponsored by the programs have helped mitigate the decline of fluid milk consumption. Fluid milk consumption was 5.8 percent higher than it otherwise would have been over the period of the study, thanks to the dairy promotion programs, the report notes.

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