New Study Shows Effectiveness of Lamb Checkoff Program
A recent evaluation has provided compelling evidence about the positive impact of promotional efforts by the American lamb industry. In the spotlight is the American Lamb Checkoff Program, which, according to a new report from Texas A&M University, has played a pivotal role in enhancing the annual value of American lamb. This report, titled “Return on Investment in the American Lamb Checkoff Program,” was meticulously crafted by renowned agricultural economists Dr. Gary Williams and Dr. Oral Capps Jr., and presents a detailed look into how strategic promotional activities have driven significant increases in lamb consumption and retail prices.
The study’s findings are quite remarkable, indicating that lamb consumption has surged by an estimated $1.17 billion to $1.31 billion, a growth attributed directly to the promotional efforts underpinned by the American Lamb Board (ALB). This boost has not only increased consumption rates but also led to a marked rise in the retail prices of lamb, culminating in an average annual growth in the value of lamb consumed of between $58.7 million and $62.4 million.
“The aim of the Lamb Checkoff has always been to bolster the demand for American Lamb,” shared ALB Chairman Jeff Ebert. “These study results underscore the success of our promotional campaigns, which have markedly enhanced demand despite our budget constraints.”
Digging deeper into the report, an intriguing aspect is the minimal proportion of checkoff expenditures in relation to total consumption value – about 0.04%. This underscores the efficiency and return on the promotional investments made, with every $100 in retail revenue from lamb being the result of a mere $0.04 spent on promotion. This low expenditure rate reflects the program’s exceptional ability to leverage limited resources for maximum impact.
Moreover, the study explored the dynamics between lamb demand and income, revealing that rising per capita income is a significant factor propelling lamb demand. As per the findings, a 10% hike in income translates to a 2.7% increase in lamb demand, highlighting the sensitivity of lamb sales to economic growth and consumer purchasing power.
In terms of competition with other meats, the study points out that beef prices play a crucial role in influencing lamb demand. A noteworthy insight is that a 10% upswing in beef prices could lead to a 6.8% increase in lamb demand. Conversely, the relationship between pork prices and lamb demand is less pronounced, and there appears to be no direct correlation with poultry prices, suggesting that consumers do not typically view lamb as an alternative to poultry.
An important metric of the checkoff program’s effectiveness is its cost-to-benefit ratio. According to the Texas A&M study, the industry sees an average return of $16.60 for every promotional dollar spent. This signifies that for every dollar not allocated to lamb promotion, stakeholders potentially lose out on $16.60 in additional revenue, emphasizing the critical role of promotional investments in driving industry growth.
The fruits of the American Lamb Checkoff Program’s labors are evident in these findings, showcasing how strategic promotion and savvy marketing can lead to substantial growth and prosperity for the lamb industry. The complete details of this impactful study can be found at the official website of the American Lamb Board.
