Thursday, April 10, 2014

Eggs for food banks a goldmine

Ontario’s egg farmers and food bank clients have struck a gold mine with a new program announced by the Egg Farmers of Ontario marketing board.

Under the program, quota-holding egg farmers donate $50 to the Ontario Association of Food Banks.

In return, the egg board gives the farmers permission to add a pullet to their flock.

That pullet will produce an estimated $50 worth of eggs during its lifetime.

The farmer gets to sell the eggs that pullet lays at the full cost-of-production formula price set by the egg marketing board.

In other words, the farmers get full compensation for their $50 donation to the food banks.

But, if by adding birds to their flock they are able to reduce their cost of production, the farmers actually pocket additional profit on this deal.

It's easy to guess that every chicken farmer will fill his barn to capacity.

It’s also easy to guess that food bank clients will quickly clean out supplies of the free eggs coming through the system.

In fact, some enterprising types may take more than they need and sell them to, say, restaurant owners who are on the lookout for cheap eggs.

If this gets out of hand, the egg board might have to resort to Old School tactics of dying “surplus” eggs to keep them from undermining the market for full-price eggs.

The only real donors in this scheme appear to be the grading stations that are offering to process these eggs free of charge.

They will, no doubt, claim that as a charitable donation for tax purposes.

Maybe farmers will try to make the same claim, although it’s hard to see what they have actually donated.

One of my friends in the poultry industry says this is the biggest quota-increasing policy he has ever seen in the industry.

But he wonders whether the other provinces in the national egg agency are going to allow Ontario to continue with what amounts to an open-ended quota-increasing scheme.