Checkoff FAQ

FAQs

Checkoff programs (formally called Research and Promotion programs) establish a legal and organizational framework so that competitors can pool resources and promote an industry as a whole. Checkoff programs help to develop new markets, strengthen existing markets, conduct important consumer and scientific research, and promote industry initiatives and activities.

Checkoff programs are financially funded by industry (not the government), allowing the industry to manage and govern its own program. Programs are authorized by Congress and overseen by the USDA to ensure fiscal responsibility, program efficiency, effectiveness, and fair treatment of stakeholders.

How does an industry start a checkoff program?

The initial step is to gauge if there is industry-wide interest for a checkoff program by conducting a feasibility study. With substantial industry support, an industry-led proposal must be submitted to the USDA for consideration. Following review and public comments, the USDA will publish a final proposal and oversee a referendum on either an immediate or delayed basis.

What will this checkoff program do once its launched?

That is up to the industry to decide.

A checkoff program can work to develop new domestic markets and exports, strengthen existing markets, conduct important consumer and scientific research, and promote select industry initiatives and activities. The industry can accomplish more together than an individual company can accomplish alone. A checkoff program allows an industry to unify, identify and address issues that impact its sales, and support the category through better-funded, more substantial consumer marketing.

Who is in charge of the program?

A checkoff program is overseen by an industry-governed board and managed by a staff that it hires. The board is appointed by the U.S. Secretary of Agriculture and will include representatives from all assessed segments of the industry. It will have control over strategic plan development, allocating funds, and approving business plans and programs. While directed and managed by the industry, the program is overseen by the USDA to ensure fiscal responsibility, program effectiveness, and fair treatment of stakeholders.

Why should we as an industry form a checkoff program?

As an industry checkoff, we can invest in addressing shared problems on a scale that exceeds individual company solutions. Keeping campaigns free of specific brand names or products, a checkoff program allows for the category to highlight the benefits of a commodity in people’s lives and focus on the emotional benefits and value of our products. However it leaves brands and companies, as always, to compete based on their own unique attributes and benefits.

Does our industry qualify as a commodity?

Yes! According to the USDA, an agricultural commodity is a food, feed, fiber or livestock and any product thereof. As a product of the milling industry, wheat-based flour is a commodity and, therefore, all companies that produce products from this commodity are eligible to establish a checkoff program.

What other industries have a checkoff program?

There are a number of industries with checkoff programs. Some of the most successful include the National Pork Board, Cotton Incorporated and MilkPEP. In general, for every dollar spent in a checkoff program, the return on investment can range from three dollars to as high as 18 dollars. Outlined below is a breakdown of the reported financial return on investment of other industry checkoff programs.

Who benefits more from a checkoff, large or small companies?

The fundamental goal of every checkoff program is to increase demand for a commodity, thereby increasing the potential long-term economic growth of the entire category.

Checkoffs across industries, from food to building materials to energy, span a variety of operation sizes, production methods, distribution options and marketing strategies —all contributing to the common goal of promoting the commodity.

To launch a successful and sustainable checkoff program, equitability is key. The active participation of companies of all sizes is essential to the success of an overarching industry program. As such, a system providing for equitable funding, governance, and benefits must be put into place.

Who benefits more from a checkoff, large or small companies?

  • Governance: USDA ensures leadership rotates fairly and does not allow for any market leader to dominate power positions, or for disproportionate focus on a single channel.
  • Benefit: Programs are equally distributed and accessible so that program benefits accrue to all funders.
  • Funding: Contribution rates are based on an equitable and proportional formula established by industry.

Commodity Benefit Cost Ratios (BCRs)

ProgramBudgetBudget as % of total salesBenefit cost ratioIncremental revenue as compared to total category revenue
Almonds$62M1.1%*6.2$381M/$6B
Beef$72M0.2%11.2$806M/$42B
Cotton$80M0.4%5.7$456M/$21B
Eggs$20M0.2%3.5$68M/$12B
Hass Avocados$56M1.0%3.25$183M/$6B
Pork$88M0.4%17.4$1,536M/$23B
Soybeans$118M0.3%6.5$768M/$47B
Potatoes$18M0.4%5.2$70M/$4B
DMI$280M0.5%4.5–7$1,260–1,960M/$60B
MilkPEP$100M0.6%4.5–7$450–700M/$16B