Sunday, May 19, 2013

Pullet Parasite: $11 million/yr Screwing of Canadians

<Sarcasm_On>The Pullet Growers of Canada ("PGC") have figured out an ingenious way to help Canadians <Sarcasm_Off>.

PGC (formally National Pullet Growers of Canada) must have figured that Canadians need to pay more for their food.  PGC thought and thought about how they could get the pot of gold for themselves, while screwing Canadians at the same time.  It's easy to do one or the other, but doing both simultaneously is the hard part.  Fortunately for all of us, there are some really smart and dedicated people in the PGC.  Their hard work paid off.  They decided to apply to join the Supply Management Club.

By becoming one of the Supply Management Mobsters, PGC will help screw Canadians out of another $11 Million per year to get eggs on Canadian dinner tables.

There are more than 550 Million dozens of table eggs produced in Canada each year, and PGC's plan will increase the cost of production by at least $0.02 per dozen, resulting in a total cost to Canadian consumers of $11 Million.

It was touch and go on this achievement for Canadians.  When PGC started, they thought they'd only be able to achieve a price increase of just $0.0025 per dozen (ie. a quarter of a cent per dozen eggs).  With further work and effort, they were able to get it up to a half cent per dozen, as promised during their Canada-wide roadshow to promote their joining the Supply Management Gangsters.

Now that they have made an application to the Farm Products Council of Canada ("FPCC") for gangster monopoly rites, they have unveiled the whole story after repeated questions, avoidance & distraction.  Fortunate for us, PGC was inspired to work even harder.  PGC now feels, as disclosed in their filings that PGC can gouge Canadians even more.  They have finally admitted that the price increase will likely be 2 cents per dozen eggs.

I'm sure with time and much more efforts, and when they really learn how to make their Supply Management monopoly work, they will be able to achieve even higher costs than a 2 cents per dozen gouging of the Canadian consumer.

How is the above any business of Small Flockers, and this Blog?

For those who don't know what a pullet is, they are female chickens that are raised from day-old chicks to 19 week old layers.  After attaining the ripe old age of 19 weeks, these pullets are sold to egg producers who use them to produce eggs for the next 52 weeks.  At 1.4 years old (ie. 71 weeks old) the egg farmers consider these pullets to be "spent", as their egg production starts to taper off for the next 5 years, so the spent pullets get sold for slaughter, ending up as chicken soup, chicken pot pie, and similar fates.

As a Small Flocker, we have the choice to:   a) use our laying hens to brood some of our own eggs to hatching the natural way that Mother Nature intended; or b) take some of our layed eggs and put them in an incubators to artifically hatch our own next generation of layers, or c) buy day-old chicks from a hatchery, raising them until they start laying eggs that we can sell, or d) buy ready-to-lay pullets from a pullet grower.  Buying just a few hens each year, Small Flockers pay a premium price to buy pullets; 5 times the price paid by the Big Boys with quota.

This addition of pullets to the SM5 (ie. the 5 Supply Management Mobster Members: dairy, broiler chickens, table eggs, hatching eggs, and turkey) will probably hurt Small Flockers most of all.

What should PGC be doing, in this Blog's mis-directed, delinquent opinion?  They should focus on helping their members improve their COP (Cost of Production) and Quality.

The above graph (from Page 26 of PGC's application files here) shows data of the 2007 pullet production year for 17 pullet producers in Quebec, 24 in Ontario, for a total of 41 farms.  The average pullet price was found to be $2.103 per pullet, which is 168% greater than the lowest cost pullet producer.  As can be seen, costs were as high as $3.75 per pullet for one producer, which is 3 times higher than the lowest cost pullet producer.

Some of these cost differences were due to land costs, age of buildings & equipment, and other reasons that the farmer is somewhat stuck with, but many of the costs are controllable, or could be controllable.  Most of the costs could be improved by communicating Best Practices amongst themselves.  By working together and sharing ideas, everybody can become equal to the best producer.  These are all the small tricks and techniques that add up to a fortune of savings.  PGC doesn't need to be a Supply Management Mobster to do any of this; all they have to do is decide to be helpful, rather than a parasite.

Those Best Practices would only be available for members of PGC.  PGC could easily prove its value to its members every year.  Everybody would want to join PGC, because it pays to do so.  They could make more money, for both themselves and Canada, rather than screwing the public by becoming another Supply Management Mobster.

Unfortunately, PGC decided to screw Canadians, rather than help Canadians.  I wonder why?

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