Nadeau Poultry is fighting for survival by signing up
chicken producers in Quebec.
Its aggressive offers of premiums are luring farmers and threatening to unravel an Ontario-Quebec deal to stifle inter-provincial trade that the partners had hoped to implement this summer.
The deal with Ontario closes the back door to keep Quebec chickens from flowing to Ontario processors, but now another back door is wide open for the chickens to go to New Brunswick.
Nadeau, which is owned by Maple Lodge, the second-biggest chicken-processing business in Ontario, lost
almost all of its chicken supply in New Brunswick to Westo Group.
Westco, in turn, partnered with Olymel of Quebec to process
its chickens, leaving the Nadeau plant stranded.
Maple Lodge and Nadeau lobbied long and hard to get the
provincial government to order New Brunswick producers to keep shipping chicken
to its plant so it could survive, but the government and the marketing board
refused to intervene.
Westco and Olymel have formed a joint venture, Sunnymel, to
build a new chicken-processing plant in New Brunswick.
In the short term, Nadeau kept its plant supplied with
chickens from Nova Scotia after fire destroyed a processing plant there. Now
Maple Lodge and a farmer co-operative are building a new chicken-processing
plant in Nova Scotia.
Ontario and Quebec have been trying to stifle inter-provincial trade because processors have been undermining the credibility of supply management by paying premiums to get enough chickens to satisfy their needs. About 10 per cent of the chickens produced in each province were going to processors in the other province when the marketing boards struck a deal two years ago to ban any increase in inter-provincial contracting.
Then they negotiated a deal to stop all inter-provincial movement and it was due to take effect this summer.
The details are a closely-guarded secret. Neither the Ontario Farm
Products Marketing Commission, which chairs an Ontario Chicken Industry
Advisory Committee, nor the Chicken Farmers of Ontario marketing board, will
give reporters a copy of the agreements they have negotiated in secret.
If and when trade between Ontario and Quebec ends, the
farmers whose birds have been going out of province will be forced to sell
their chicken to a processor in their home province. The choice of who ships where is being arrived at by negotiations between the chicken board and processors - i.e. at the Chicken Industry Advisory Committee - and will be enforced through powers held by the chicken board.
However, because there is no similar deal between Quebec and
New Brunswick, Maple Lodge is able to use Nadeau to sign up Quebec chicken
farmers. They are enticed with premiums.
Maple Lodge is the second-largest chicken processor in
Ontario and if it can get enough chicken to fully supply its Nadeau plant, will
be the largest chicken processor in Atlantic Canada.
Maple Lodge gained some Quebec chicken producers when it
recently bought Grand River Poultry. It shut down Grand River’s slaughter
facility at Dundas, Ont., and is slaughtering the chickens produced for Grand River
in Ontario at its Maple Lodge plant at Norval on the western outskirts of
Toronto.
It can direct Grand River’s Quebec production to its Nadeau
plant in New Brunswick.
There is so far no indication that the Ontario chicken board and government might try to their powers to discipline Maple Lodge for undermining the Ontario-Quebec agreement by luring Quebec producers with premiums to supply its Nadeau plant.
