Thursday, March 6, 2014

Chicken board claims kosher issue resolved

The Chicken Farmers of Ontario marketing board claims it has resolved the issue of providing the market with kosher chicken produced and processed in Ontario.

The claim is made in its annual report, but the board and the industry have provided no details or evidence that the claim is true.

The board does not allow reporters to attend its meetings, including district meetings to brief farmers and its annual meeting being held today.

The kosher-market issue arose last year when Chai Kosher Poultry of Toronto sold its right to buy Ontario-grown chicken to Sargent Farms. The rights are controlled by the chicken board which basically divides Ontario-grown chicken supplies among existing processors on an historical percentages basis.

The policy was implemented as an effort to eliminate competition among processors that resulted in inflating prices beyond the government-approved cost-of-production pricing formula.

Sargent Farms is not approved as a kosher plant, so the Ontario demand had to be met with chicken from other provinces. That put pressure on a Montreal plant to fill the Ontario market and it charged significantly higher prices.

The annual report says “at year end, an Ontario resolution was being developed through industry collaboration, with an expectation that the kosher markets would again be served with Ontario chicken in early 2014.

“Such a solution was required as Ontario was unsuccessful in its request for additional supply by the Chicken Farmers of Canada to address this market disruption on Ontario consumers.”

The owners of Chai Poultry filed an application to re-enter the kosher market under the chicken board’s specialty-markets policy, but the Association of Ontario Chicken Processors stalled that policy for nine months by filing appeals with the Ontario Ministry of Agriculture and Food Appeal Tribunal.

It eventually cancelled that appeal, apparently paving the way for the Ontario board to implement its specialty-markets policy.

So far that has not happened. The annual report indicates it’s in the works for early 2014.

The report outlines Ontario’s continued frustration in persuading the national agency to grant Ontario the right to increase production enough to satisfy the Ontario demand for chicken.

The CFO says it makes more sense to produce and process enough chicken in Ontario to meet the Ontario demand because it’s cheaper than producing it elsewhere and transporting it to Ontario markets.

The annual report makes no specific mention of two other hot issues – CAMI International Poulty Inc. of Welland which has been left without enough chicken to supply the Asian markets in and around Toronto with Hong Kong dressed (feet and head on) chicken, and a concerted push by small-flock owners to have the right to produce and market up to 2,000 birds per year instead of the current limit of 300.

CAMI has filed court challenges and the CFO annual report does say that it is “standing shoulder-to-shoulder” with the Association of Ontario Chicken Processors to defend the plant supply allocation system.

An organization representing small-flock chicken farmers is preparing an application to the appeals tribunal now that the chicken board has refused its request.

The CFO says it is developing a new cost-of-production chicken-pricing formula. The annual report says nothing about the order it got from the Ontario Farm Products Marketing Commission to roll back prices to reflect current feed-conversion ratios.