In fiscal year 2019, the National Peanut Board (NPB) commissioned an economic study to measure the return of peanut producers’ investments in the marketing and research funding programs managed by the board. The study, “An Economic Evaluation of the National Peanut Board,” conducted by Harry M. Kaiser of Cornell University, found that each dollar invested in the board’s checkoff program between 2014 and 2018 returned $9.74 to the peanut industry.
America’s peanut farmers, through the National Peanut Board, invest around $10 million annually to implement programs that strengthen peanuts’ position in the marketplace and maintain, develop and expand markets for peanuts. Additionally, NPB helps fund production-level research aimed at decreasing production costs and improving the efficiency of peanut growers.
“This study demonstrates the tremendous impact of NPB on the domestic peanut market,” said Kaiser, who presented the study results July 17 at the National Peanut Board’s quarterly meeting in Panama City Beach, Florida. “Had there not been any NPB marketing activities over the most recent five-year period, 2014 through 2018, total domestic peanut demand would have averaged 14.4 percent less than it actually was.”
Furthermore, the study emphasized had there not been any NPB-sponsored production research over this period, peanut yields would have averaged 3,462 pounds per acre, compared with 3,880 pounds, or 10.8 percent less than it actually was, according to Kaiser.
“It is important for the peanut industry to have an independent evaluation of the effectiveness of the marketing and research programs farmers fund,” said Bob Parker, National Peanut Board’s president and CEO. “We’re confident of the methods of this economic analysis and we’re very pleased with the results. Moving forward, we will be able to use this data to plan and manage our future programs.”
“While these results are important,” said Kaiser, “the benefits of NPB’s marketing and production research programs to industry profitability relative to its cost is a more important question to address.”
A marginal benefit-cost ratio measures the benefits of five individual promotion and research categories in terms of additional profits from an extra dollar invested in each activity.
- Public relations/digital media — an extra dollar invested returned $105.67 to producer profit
- Reputation management — an extra dollar invested returned $6.46 to producer profit
- Business development — an extra dollar invested returned $3.38 to producer profit
- General peanut advertising — an extra dollar invested returned $6.88 to producer profit
- Production research funding — an extra dollar invested returned $1.79 to producer profit
To view and download the full study, including an executive summary, click here.
Source: National Peanut Board