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by Bernt Nelson and Betsy Resnick, Economists, American Farm Bureau Federation
National advertising campaigns asking if you’ve “Got Milk?” or telling you “Beef. It’s What’s for Dinner” generated a lot of buzz – and sales of dairy and beef, respectively. Though they may be some of the most recognized initiatives from industry checkoffs, the work of these programs representing agricultural products ranging from dairy and beef to peanuts, popcorn, paper and Christmas trees have been a catalyst for innovation across numerous commodities. In this Market Intel, we’ll explore the history of checkoffs and their role in promoting agriculture.
Research and Promotion Programs
The best-known checkoff programs are research and promotion (R&P) programs, run by R&P boards with a mission to maintain and expand markets for a specific commodity. Originally, these programs existed on a voluntary basis; farmers and ranchers had the option to check a box when they sold a product that gave part of their revenue to research and promotion of the commodity, hence the term “checkoff.”
As these programs grew, a classic free-rider problem developed as farmers and ranchers who did not contribute to checkoffs were still receiving all the benefits to the industry that checkoffs provided. Federal R&P programs became a solution to this issue. Today, there are 22 active R&P programs.
Of the 22 active R&P programs, 10 are authorized under the Commodity Promotion, Research, and Information Act of 1996. The other programs are authorized under commodity-specific federal legislation. The oldest federal R&P program is the Cotton Board, which was established in 1966 to reestablish markets for cotton as synthetic fabrics were beginning to replace cotton fabric. Today, all producers of cotton are assessed at $1 per bale and 0.5% of the value of the cotton bale. Cotton importers are also assessed a comparable amount based on the weight of cotton or cotton products imported. In addition to promotion efforts such as The Seal of Cotton™, a logo that has been around since 1973 and is one of the most recognized logos in the country, the Cotton Board has sponsored pioneering research that led to the cotton module builder, which builds the large compact bales you’ll see in cotton country at harvest. The Cotton Board also supported research that has made cottonseed a popular and effective feed for cattle. With this research, cottonseed has gone from an unwanted byproduct to an increasingly important part of the crop’s value.
R&P Program Rules
R&P programs are self-funded by the industry. USDA’s Agricultural Marketing Service provides oversight for the programs to ensure fiscal accountability and program integrity. The programs reimburse AMS for the oversight through industry assessments, so no taxpayer dollars are used to fund the oversight of R&P programs. All R&P programs are required to exempt organic products from assessment requirements. Additionally, a majority of R&P programs provide assessment exemptions to small producers and small importers[BR1][EM2] , the definition of which is different for each commodity program.
All R&P programs carry out their mission to maintain and expand markets for their specific commodity through research and development, domestic and international promotion, and consumer and industry education. They are explicitly banned from using assessment or “checkoff” funding for lobbying or to promote specific brands. Instead, the R&P programs must focus on promoting the sector as a whole, including imports, if importers are also assessed.
For example, the U.S. Highbush Blueberry Council (USHBC) does not promote exclusively U.S.-grown blueberries as an assessment is also placed on imported blueberries. Instead, USHBC promotes blueberries broadly with the goal of making them the most consumed berry worldwide. Since the council’s inception in 2000, domestic blueberry consumption and production have skyrocketed. Between 2000-2002 and 2018-2020, average per capita blueberry consumption grew to 2.2 pounds per person – an increase of 574%. The increase in consumption is fueled by both an increase in domestic production (+283% to 343 million pounds) and an increase in imports (+919% to 450 million pounds).
All R&P programs undergo independent annual audits, and are subject to referendum, though the referendum rules vary by commodity. Referendums take place to establish a new R&P program and to affirm continuation of existing R&P programs. All R&P programs authorized under the Commodity Promotion, Research, and Information Act of 1996 are required to hold a referendum every five years. Others, authorized under previous legislation, are subject to their own rules for referendum.
The most recent referendum was held for the National Peanut Board in April 2024, and passed with 93% of peanut producers voting to continue the program.
The United Soybean Board requires AMS to conduct a request for referendum every five years and recently conducted a request for referendum between May 6 and May 31. For a referendum to be requested, 10% of all soybean growers (41,336 in total) would need to return a completed form to their county Farm Service Agency office by May 31. No more than 20% of total petitions may be from the same state. While results of the 2024 request for referendum are not yet public, when it was last held in 2019, only 703 total requests were received, representing only 0.13% of all eligible soybean farmers.
The Beef Promotion and Research Order, established by the 1985 farm bill and approved by national referendum vote in 1988, authorizes the Cattlemen’s Beef Promotion and Research Board. The program requires a referendum only if a representative group comprising 10% or more of total cattle producers signs a petition for referendum within a 12-month period. A petition for referendum was launched on July 2, 2020, and ultimately failed to validate the 88,269 signatures required at the time. According to the 2022 Census of Agriculture, there were 732,123 farms producing cattle at the time of the census, so future petitions would require at least 73,212 signatures to conduct a referendum.
How is Money Spent?
Money from R&P programs can be used in a variety of ways. Typically, it is spent on research, promotion or education to build demand and expand markets for each respective commodity. For example, the purpose of the Cattlemen’s Beef Board is to “stimulate beef sales and consumption through a combination of initiatives including consumer advertising, research, public relations and new-product development.”
Traditionally, these programs used advertising as one of the pillars of programming, but as the cost of advertising has increased, spending has moved toward scientific research and education.
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