USGC programs generate $659 million for U.S. farmers
U.S. Grains Council members heard at the 6th International Marketing Conference and 49th Annual Membership Meeting in Guatemala City, Guatemala, the financial value of the Council to U.S. farmers. Rick Fruth, USGC vice chairman, said in realizing such a review conducted internally could present an upward bias, the Council contracted Informa Economics LLC to construct an estimation procedure for the study in order to eliminate the potential bias and reduce the margin of error on the review. This is the second Council performance review conducted by Informa Economics and validated by USDA's Foreign Agricultural Service.
"Our goal in conducting this review was to be as accurate as possible and alleviate any concerns that a bias exists," said Fruth. "We wanted to give our producer members a clear picture as to how their state checkoff dollars apportioned to the Council have a significant return," said Fruth, who is a USGC delegate for Council member Ohio Corn Marketing Program. "Producers are fortunate their checkoffs are investing in the Council and increasing demand for U.S. feed grains, which means a greater bottom-line annually."
The 2008 Informa Economics study concluded that the impact of the Council's market development efforts on the U.S. feed grains industry is worth $659 million to U.S. farmers, which is up from $592 million in 2007. That amounts to $37 in additional producer income for every dollar invested in the Council. Fruth said Council members provide only a minority of the investment; however, 100 percent of the returns accrue to U.S. producers.
"It is clear that the organization creates an immense value for U.S. agriculture," said Fruth. "To simplify things, Informa estimates the Council increases the value of U.S. corn by about a nickel for every bushel. If the Council was on Wall Street, investors would be bringing wheel barrels of cash. What other investment gives this kind of return?"
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