Study Analyzes Contribution of American Lamb Checkoff Program
The American Lamb Board (ALB) works to evaluate the efficiency and effectiveness of their programs and ensure its efforts deliver a good return on the industry’s investment. At least every five years, ALB conducts an extensive economic return on investment (ROI) analysis with a third-party University. The latest ROI study was recently finalized and is now available upon request.
The Texas A&M University 2019 report “Return on Investment in the American Lamb Checkoff Program” conducted by agricultural economists Gary Williams, Ph.D., and Dan Hanselka, aimed to answer two main questions: (1) what have been the effects of the American Lamb Checkoff Program on U.S. lamb markets, and (2) what have been the returns to the U.S. lamb industry from its investment in the checkoff program (the ROI).
According to the study, the American Lamb Checkoff Program has positively contributed to American lamb demand and industry profits. After extensive econometric modeling, researchers concluded that the American Lamb Checkoff Program added from 2.4% to 2.7% of the annual value of retail lamb. This 2.4% to 2.7% “lift” is the result of increased consumption of lamb and a more modest increase in retail price. The study reports that ALB promotion programs have helped increase the U.S. production share of lamb consumption to “some extent over time.”
Another measure of checkoff program contribution to the industry is the cost-to-benefit ratio. The Texas A&M study reported that the average return to industry stakeholders for every $1 invested into the American Lamb Checkoff Program is approximately $14.20.
The researchers state in the report: “With modest funds available for promotion, the ALB succeeded in substantially enhancing the annual value of U.S. lamb consumed.” The American Lamb Checkoff Program’s promotion program is about $1.5 million a year, with another $0.5 million invested in education and research programs. Administration costs must be less than 10 percent of yearly collections.