Monday, December 2, 2019

John Van Aert wants break on pullet quota

John Van Aert of Watford is asking for a 55-cents-per-bird lease rate on pullet quota in an appeal he filed against the Egg Farmers of Ontario marketing  board.

Van Aart laid out his case during a public hearing in Guelph this week, refuting gossip that he is cheating or circumventing the intent of the egg board’s quota-leasing policy that began Jan. 1 and set the rate at $1 a bird.

Van Aert said he has done nothing wrong or prevented by egg board policies and got agreement from lawyer Geoffrey Spurr representing the egg board.

Yet Van Aert said has heard that some people say he’s acting like a criminal in his investments in pullet-growing barns to meet strong demand for organic-standard “aviary” pullets for egg-quota holders who want to meet aviary housing standards.

He leases quota to be able to fill the barns, but continues efforts to buy as much quota as possible on the exchange the egg board operates. The price now is $25 per bird which, at five per cent interest, is $1.25 per bird, van Aert testified without revealing his own borrowing costs.

Van Aert testified he’s convinced the future is in organic egg production in aviaries as opposed to cages, so he’s plunging into the market.

When he laid plans for a new barn to be built by a company his son, Bryce, will operate, it was 2016, few pullet growers were interested in the expense and labour involved in raising pullets in an aviary to meet organic standards and lease rate of then was 55 cents a bird.

He went ahead and invested about $350,000 in a new barn for BVA Farms Ltd. that he intended for his son, Bryce.

Had the rate been $1 a bird, he said he would not have made the investment, even though he remains convinced that aviary-raised pullets is the way of the future.

He has 250,000 units of egg quota, which he said is one of the largest in the province, and is producing organic eggs in aviary housing for Burnbrae Farms, the province’s and Canada’s largest egg-wholesaling business.

He buys about half of the pullets BVA Farms is raising, plus more from CJVA Farms Ltd., an even larger pullet-growing operation owned by another member of his family.

He said he pays BVA more than the going rate for pullets to help his son make ends meet at the $1-per-bird quota-leasing rate, but said BVA can’t get more than the going rate for pullets sold to others.

For its part, the egg board’s pullet committee points to excess capacity in the industry and wants to fill those spaces with either purchased or leased quota. It is less than supportive of Van Aert's aggressive building of large barns that increase industry capacity.

Much of the excess capacity is in Eastern Ontario, Van Aert countered, and egg farmers there can buy pullets for less from Quebec.

Burnbrae Farms is building two more pullet-growing aviary barns in Quebec, Van Aert testified.

Van Aert several times said that what he wants is “normal, practical” price increases from 55 cents for pullets, “not this 400 per cent increase.”

He said price increases ought to be “pegged to something” such as the cost of living index so pullet growers can make sound business decisions.

He said he took considerable risks to plunge into new aviary barns based on leasing quota because any quota-holding pullet grower could at any time convert barns, or build new ones, to grab market share. They would not need to lease quota.

“But when I did it, nobody else was willing to do it,” he said. He used about 40,000 units of pullet quota he owned for the BVA aviary.

He said he’s disappointed the egg board failed to catch his vision for what’s happening to demand for organic eggs and therefore to offer him assurances that he can lease the quota he needs at a "reasonable, practical rate" while he continues to buy quota as it becomes available.

To his critics, he testified “I’m a mover and shaker. I’m an aggressive farmer. Fault me for that, but that’s who I am.”