Friday, October 2, 2015

Council reveals supply management issues

The annual report from the Farm Products Council of Canada reveals that all of the poultry agencies face challenges.

The council has been pressuring the egg agency for at least several years to reduce its levy used to divert eggs from the high-priced “table” market to the lower-priced processing market.

The council notes that the levy comes out of the pocket of consumers of table-market eggs, which is what they pick up at supermarkets.

It has made several suggestions to address its concerns, such as having some of the levy money coming out of farmer’s pockets instead of being added to the price of table-market eggs or charging a fee for increases in the number of hens quota holders are allowed to have.

The council’s annual report also reveals that it has had reservations about the degree to which the national egg marketing agency has wanted to increase production.

One of its concerns is that some provinces can use the extra eggs, but in other provinces it will result in greater surpluses to be diverted to processors.

The issue remains unresolved, but the pressure has eased this year because prices for processing eggs in the United States have soared in the wake of avian influenza wiping out multi-million-bird flocks devoted to producing for processors.

That means there is a less of a price gap in Canada between table-market and processing-market eggs.

At the chicken board, the council’s report lauds the agreement reached this year that will give Ontario a greater share of production increases than some other provinces.

Ontario is devoting much of the increase to address demand for specialty and niche-market chicken.

But processors in British Columbia, Alberta and Saskatchewan have challenged the new deal, complaining that it favours Ontario processors at their expense.

They have filed appeals with their provincial supervisory boards.

The council also notes that this new deal can’t take full and official long-term effect unless and until all signatories to the federal-provincial supply-management system agree.

A single negative vote by any province, any provincial marketing board or at the national chicken agency would scuttle the deal.

At the turkey board, the council continues to express concern about transparency in annual reporting, about updating the federal-provincial agreement, about the cost-of-production formula used for pricing turkeys farmers sell to processors and favours more research to determine how consumer demand can be increased.

At the Canadian Hatching Egg Producers agency, the council is watching four failed attempts last year to resolve complaints Ontario has filed over a dramatic increase in imports from Quebec.

When the national agency began, there were two million chicks moving from Quebec to Ontario farmers. Now it’s 10 million a year.

Direct meetings between the two provinces have failed to reach an agreement and the council notes that some provinces that are members of the agency are suggesting that they try mediation.