Monday, July 20, 2015

Final egg report finds no wrongdoing

The final report of a team that inquired into the Egg Farmers of Ontario marketing board has found nothing wrong.

It is, however, continuing its investigation, particularly to determine why Ontario has a much higher incidence of Nest Run eggs than other provinces.

In Ontario, it’s 12.1 per cent of farmers’ eggs that are graded “Nest Run,” meaning they are diverted to processors. In other provinces, it’s 8.4 per cent.

In Ontario, L.H. Gray & Son Ltd. and Burnbrae Farms are the largest egg producers and own the biggest grading stations and egg-processing plants.

They handle about 90 per cent of eggs farmers produce. They benefit if eggs are diverted for processing at their plants.

The final report reveals that the audit, ordered by the Ontario Farm Products Marketing Commission in May of 2013, was conducted by a team from the Ontario Ministry of Agriculture, Food and Rural Affairs.

They work for the Transportation and Agriculture Audit Services Team. The report is signed by Brad Henderson, senior audit manager who is both a certified public accountant and a chartered accountant, by John Connonlly, risk and assurance consultant, and John Thomann, an audit project manager.

They found that the management at the egg board follows a written structure with defined roles and responsibilities, that all spending appears to be in order with budgets and that the board relies on the national agency for cost-of-production data and on the Canadian Food Inspection Agency for the accuracy of grading.

The report says the CFIA has a “tolerance for cracks” as eggs move from grading into storage. That has been a contentious issue in a lawsuit between Svante Lind of Best Choice Eggs and Gray, Burnbrae and the egg board.

There is no mention of a tolerance in the CFIA standards for egg grading.

Information from CFIA random-sample surveys, obtained by Ontario Farmer via Freedom-of-Information requests, indicates that Burnbrae and Gray often had samples with seven per cent or more cracks or eggs that otherwise failed to comply with the Grade A standards claimed on packaging.

The auditors say the incidence of cracks is roughly the same in Ontario as other provinces.

Burnbrae and Gray also have grading stations in other provinces, including Quebec and British Columbia which are second and third in egg-production in Canada.

The lawsuit Lind has filed is still before the courts.


Burnbrae won a court decision to be dismissed from the lawsuit and Lind’s lawyers have recently lost an effort to have that decision reviewed by the Supreme Court of Canada.