USSEC Commissions Independent Study on International Marketing
- General News
USSEC recently commissioned an independent study of producer return from the international marketing efforts of U.S. soy which includes checkoff and USDA funding. The study concluded that international market promotion has significantly boosted U.S. soybean industry profitability under the management of USSEC and its predecessor organizations.
The evaluation, which used an econometric simulation model of world soybean and soybean product markets dating back more than 20 years, was conducted by Dr. Gary Williams, Professor of Agricultural Economics and Co-Director of the Agribusiness, Food and Consumer Economics Research Center of Texas A&M University in 2014. According to the study, international marketing activities conducted on behalf of U.S. soybean growers increased soybean exports each year by an average of 993,600 metric tons (MT) or nearly 5 percent. For soybean meal and soybean oil, the average annual growth over that period was estimated to be somewhat larger at 15 percent (808,600 MT) and 24 percent (149,600 MT) respectively.
Using those results, Dr. Williams calculated a gross export revenue benefit-cost ratio (BCR) over the period reviewed of $29.6 of additional export revenue (net of the cost of the promotion) per dollar spent on international promotion. At the producer level, that additional export revenue translates into a BCR of $10.1 in additional profit to growers (net of both additional production costs and the cost of promotion) per dollar spent on international promotion.
The study took into account the funds invested by the soy checkoff (national and state) as well as U.S. Department of Agriculture (USDA) matching funds and third-party contributions. Based on the BCR calculated by Dr. Williams for all funding, including cost-share and third party contributions, USSEC estimates that for every checkoff dollar contributed by the producers, the international marketing activities returned additional revenue of $74.5 and additional profit to the growers of $23.2. Since the USDA cost-share and third-party contributions are dependent upon checkoff funding, the total return to farmers is amplified by the other funding sources. The independent, third party study weighed investments from funding sources dating back more than 20 years.
Dr. Williams concluded that the international market promotion component of the soybean checkoff program has generated over $20 billion in additional export revenue since 1980/81 with a BCR of $34.8 per dollar spent on international promotion, over $6.2 billion in additional soybean grower profits since 1980/81 with a producer BCR of $10.1 in producer profit per dollar spent on international promotion.
Soybean checkoff investments in international market promotion have enhanced the international competitiveness of the U.S. Soy industry and increased the global market share of U.S. soybean and product exports and have boosted imports of soybeans and soybean products around the world , particularly by China and many smaller, less-developed countries.
Read the study here:
Return to Soybean Checkoff International Market Promotion 2014