Tuesday, August 20, 2013

Ontario chicken board adjusts pricing formula


The Chicken Farmers of Ontario marketing board is once again adjusting its pricing formula as it relates to feed costs.

It took a 1.5-cent reduction for quota period A-111 when the Ontario Farm Products Marketing Commission ordered a review of the feed component of the pricing formula.

Now it’s rescinding that price reduction and says it will implement a new pricing formula.

Under the new formula, prices will move up or down one cent per kilogram whenever feed prices move up or down by $5.81 per tonne. Under the old formula, the adjustments were made for every $5 change in feed costs.

The new formula will take full effect for quota period A-120, which begins Oct. 6.

The chicken board hasn't uttered a peep about the reliability of the feed prices that are plugged into the formula. Glenn Black has shown that Ontario's poultry-feed prices are out of line with U.S. prices and Ontario feeds for livestock.

However, that new formula will probably be short-lived because there are negotiations underway between the chicken board and the Association of Ontario Chicken Processors on the entire pricing formula.

Meanwhile, the two have still not settled on a policy for specialty markets. The AOCP filed an appeal with the tribunal when the chicken board said it would implement the policy, but the tribunal suspended the action because the two returned to the bargaining table.

The stalemate leaves two significant markets without Ontario-produced chicken – the kosher market, which is entering a peak religious-season demand period the beginning of September, and the Asian market for Hong-Kong dressed birds with feet and legs left on.