Friday, October 8, 2021

Sweda says $8 million could be saved

 In another application to the Egg Farmers of Ontario marketing board, Sweda Farms argues that there is a potential to save $8 million a year, mainly on eggs that are diverted to processors.

It says the egg board ought to keep closer tabs on the costs and volume that grading stations divert to processing under two different programs – Industrial Product program and Nest Run eggs.

Sweda Farms estimates that $6 million a year could be saved by keeping better controls over Nest Run and tendering.

Another $2.5 million could be saved by better controls over the Eggs For Processing – similar to those it recommends for Nest Run and Industrial Product.

For example, Nest Run eggs don’t need to be graded, yet the board is paying 8.5 cents per dozen for grading.

It says producers ought to be given additional information when the grading station puts their eggs into the Nest Run program which according to Ontario board data could be 60 per cent of tendered eggs per year.

Sweda said the processors could be charging some processing-egg customers higher prices, such as McDonald’s; that might encourage them to use table market eggs instead and benefit farmers.

Sweda also said import permits tend to be used up by the end of summer and then Burnbrae and Gray predict they will be short of eggs for the peak demand season before Christmas and apply for supplementary import permits.

They apply for these permits even while they are diverting Canadian-produced eggs from the table market to processing.

Sweda is lobbying for a levy on imports to help reduce the consumer levy (formerly called the producer levy); imports impact domestic egg product and garner millions of dollars of profit for those holding import permits.

The egg board rejected Sweda’s proposals in April and now Sweda has filed for reconsideration.

If the board continues to stone-wall, the issues will probably form an application for appeal to the Ontario Ministry of Agriculture, Food and Rural Affairs Appeal Tribunal.