Having lost the bid to form a national marketing agency,
pullet and egg quota holders are pushing prices higher.
The price has gone from $1.25 per bird a few years ago to
$1.75 and the push is on to hike it to $2.20, which is roughly the cost of
production as calculated in the application for a national agency.
The Farm Products Council of Canada rejected the bid for a
national agency last year, scuttling several years of efforts, mainly from
Ontario and led by Andy DeWeerd of Tavistock, a pullet-grower director on the Ontario egg marketing board.
It’s quota-holding egg farmers who stand to benefit most
from a hike in pullet prices. They own the overwhelming majority of the
province’s pullet quota which is governed by the same Egg Farmers of Ontario
marketing board.
Any price increase for pullets gets passed through the
cost-of-production pricing formula for eggs.
While that formula is the official reason for egg prices, in
practical terms the egg boards have been pricing eggs up to the point where
tariffs don’t provide protection from a flood of U.S. imports.
The tariff on eggs now is 168 per cent.
There is one major fly in the ointment for Ontario –
competition from outside the province.
Imports from the United States have been virtually shut down
by requiring pullet growers to demonstrate that they have an acceptable HACCP
(Hazard Analysis Critical Control Points) plan in place.
Imports from Quebec are more problematic and some growers
there are eager to expand their production in advance of any restrictive quota
regime being implemented.
There are rumours that some Ontario egg producers have been
offered free, or nearly free, pullets from Quebec growers.
Pullet quota has become more valuable as prices have
increased.
What once cost $8 a bird is now fetching $34 a bird.
The egg board’s move to cap egg-laying bird lifetimes at 12
instead of 13 months is increasing the demand for pullets. It’s also pushing
the producers – about 25 per cent of the total quota holders – into ordering
pullets one month earlier and that, in turn, has meant that some are having to
pay premiums to obtain the birds they need.
A proposal to lease up to 735 birds to each quota
holder would also increase demand.
Many small-scale producers will be able to nearly double their
production if the 735-bird secret proposal is adopted by the board.
Some who have leased in the past have already built more barn space.
Some are also splitting quota holdings among family members
so they can each qualify to lease quota from the board.
The board is using the lease revenues to pay its
administrative costs.
Most provinces allocate quota increases to quota holders,
but Ontario has a leasing policy.
