Williams highlights international marketing program as particularly effective
It’s easy to find numbers that show that global demand for U.S. soybeans, meal and oil has increased since the birth of the national soy checkoff 23 years ago. What isn’t as easy to calculate is how much that additional demand that the checkoff has helped bring about adds to U.S. soybean farmers’ bottom lines.
That’s why the national soy checkoff funds return-on-investment studies, to measure that impact.
In this interview, Gary Williams, Ph.D., an agricultural economics professor from Texas A&M University who conducted the most recent soy-checkoff analysis, offers his interpretation of the results.
Q: What was your overall conclusion on how much return the soy checkoff provides U.S. soybean farmers?
A: The bottom line is that there is a positive return on investment of $5.20 for every dollar spent. That calculates into about 5 percent of an average U.S. soybean farmer’s cash receipts that are the result of the soy checkoff program. It’s been a very effective program and it’s had an impact on the markets. It’s lifted demand and enhanced production, so it’s been able to create demand and then feed that demand. And, in that way, it’s kind of minimized Brazil and Argentina’s markets as well.
Q: Which markets has the checkoff impacted?
A: It’s been very effective in both domestic and international markets, as well as in production research. Internationally, the relationship between spending and demand has been excellent in large markets like China, with a pretty high impact there for each dollar spent, as well as in a lot of those smaller countries. Domestic demand-promotion efforts have also been effective. And the investments in production research have been so effective that the growth in production from those investments continues to keep up with the greater demand the checkoff is creating.
Q: How did you conduct the study?
A: We did what we call a counterfactual analysis. We basically analyzed what the world looks like now, with the expenditures. And then we used a model to say, “OK, what would happen to the soybean markets if those expenditures didn’t exist?” We ran the model to see how things changed. Do prices change? Do quantities change? Do they change by a lot or a little? Of course, that depends on how effective those dollars are on each market and each program. And then we measured the differences.
Source : unitedsoybean.org