Pinching pennies: Beef Council budget tightensWritten by Christy Hemken
“One of the main reasons our revenue has been declining is drought,” says WBC Executive Director Ann Wittmann of their fiscal year 2009 proposed budget. “We did have cattle moving and selling because of drought conditions, which increased our revenue, but now the herd size in the state is smaller, accompanied by fewer changes of ownership.”
It’s those changes of ownership that are the lifeblood of the WBC, as the dollar-per-head fee is what the organization relies upon. In 2002 the WBC’s revenue was $1.1 million, a number it hovered near in years 2003, 2005 and 2007. In 2004 and 2006 revenues dipped below a million. Similar numbers are being seen for 2007 and 2008. In recent years the WBC has dipped into savings set aside while the future of the beef checkoff was tied up in litigation. Wittmann says today, with savings diminished, that’s less of an option.
“The other thing we’re looking at is a decline in our cash reserves,” notes Wittmann. “We’d been using those through our times of lower revenue, but now they’ve been expended. Our flexibility is much less than what we’ve had in the past.”
Wittmann says that, over the last several years, the WBC has cut back significantly across the board. “The Council spends a considerable amount of time prioritizing and determining where funding will go, based on strategic importance and impact,” she says. “Our ultimate goal is to increase demand for beef.”
“We’ve cut back a number of programs and we’re constantly in the process of evaluating programs run through this office and by contractors so that we’re focusing the checkoff dollars where the most impact will be,” she explains of the yearly review of projects.
Wittmann says over the last three years the WBC has had to make considerable changes to priorities and funding procedures due to lack of income, but advertising beef remains a priority.
“Our producer survey shows they believe advertising is an important part of where they want their checkoff dollars to go,” she says.
“We haven’t completely done away with any particular program, but we’ve tried to cut funding in proportion to program impact to refocus those dollars.”
“We’re trying to find more effective ways to go about dealing with the set of folks we know are important – like health providers and retail grocery producers,” she says.
National and international marketing remain the number one priority of the WBC. “In a state where you have three times more cattle than people, if we’re going to move the needle on demand we have to do that with advertising and programs in areas where the consumers are,” says Wittmann. “It is the number one priority, but that budget has also been reduced percentage-wise in response to the reduction in our cattle number.”
Wittmann says the WBC was able to spend the most in the year 2000, but as revenue decreases so do their contributions.
In addition, as the cost of doing business increases, the WBC is seeing an erosion of the checkoff dollar. “It’s now more expensive for us to do the same amount of advertising that we’ve always done, and it’s no different than what ranchers are experiencing themselves,” notes Wittmann.
“We’re trying to be very cautious and effective with that dollar so we really get the most bang in today’s marketing environment,” she explains.