Tuesday, June 25, 2013

Top Priorities for Small Flockers

I was contacted by a reporter who needed me to summarize all that I have written, "Just give me your top three issues", they said.

I thought about it, I reviewed the titles of all my posts, then I had to re-read some of the posts themselves, as the titles didn't fully describe the content.

I thought some more, then decided on the top three priorities.  I'd appreciate some feedback from the Small Flock members on my preliminary answer for our top 3 priorities:

  1. Affordable, safe, nutritious, high quality, sustainable, and locally produced foods for Canadians.

    Small Flockers are most concerned about poultry meats and eggs for the above priority.

    We have concerns about the affordability, safety, nutrient levels, sustainability, and centralization of the mega chicken factory version by quota-bearing Supply Management; our beliefs being collaborated by voluminous research and critical incidents.

    In spite of the drawbacks of the "officially approved" system, Canadians are treated as incompetent wards of the government, stripped of our rights to produce and consume food as we know best, and as we choose.

    In the above stated priority, we have placed affordability first for a reason.  If it isn't affordable, none of the other factors matter.  Safety and risk are on a broad continuum, so if it is slightly higher risk but much more affordable, some people may want to consciously take that risk, for no food is 100% safe.

    If someone feels consciously forced to buy unsafe food due to the unaffordability of safer food, the government should focus its efforts on improving affordability so that everybody has a reasonable choice.  The less safe food will naturally disappear from the marketplace when safer, better, more affordable options appear.

    The SM system is a government created monopoly that is supposed to be operated and maintained in the best interest of the public; but this rarely or never occurs.  In reality, the SM system is operated in the best interest of the select few (ie. 0.01% of Ontario's population), and against the greater good of the public (ie. the 99.99% of Ontario).

    The current Supply Management ("SM") system is operated with mis-management, lack of due diligence, secrecy, cronyism, and so as to exceed the legislated and delegated authority of the various agencies.  The SM legislation is beyond the powers of the Federal and/or Provincial governments, and contrary to international treaties.

  2. Everyone is allowed to raise up to 2,000 meat chickens per year.

    Chicken Farmers of Ontario ("CFO") has stated that the 300 bird limit was chosen arbitrarily, they planned on it being highly restrictive, and agree that this limit is insufficient for producing chicken at affordable, competitive prices.  However, CFO feels no need to allow alternative, competitive systems to exist which might be in competition with their chicken monopoly.  This 300 limit takes away the farmer's right to feed their family, supply food to their local community, and earn a reasonable living.

  3. Everyone is allowed to self-inspect and farm-slaughter up to 300 poultry birds per year, then sell them at their farm gate, provided they supply full disclosure to the prospective customers.  OMAF can issue a special license that exceeds these limits under special circumstances; or in remote, under-serviced areas.

    There are numerous under-serviced areas in Ontario today, with no hope of getting a commercially viable, local, provincially licensed slaughter plant.  We believe that a properly trained farmer can produce eviscerated poultry carcasses that are equal or better than the high speed, automated processing factories.  With full disclosure, there is no fraud, nor an imbalance of power between the buyer and seller.  Private individuals should not be stripped of their right to choose their own foods.

    By limiting the farm slaughter to just 300 birds, the magnitude of the total risk of farm slaughter is contained.

    If a farmer feels a need for marketing more than 300 birds per year, Small Flock Poultry Farmers of Canada believe that it becomes viable above that 300 limit for the farmer to transport their flock to a Provincially-licensed abattoir, and therefore should do so.  If it still isn't viable above the 300 bird slaughter limit, the burden of proof is on the farmer, and if their case has merit, OMAF can issue a special license to the farmer with the necessary conditions.

    In remote areas (ie. James Bay coast, remote mine sites and work camps, etc.), we suggest that the government can issue special permits to extends these limits (2,000 and 300) further.

    If this proposal is still seen as too risky for some unknown reason, the local Health Unit can inspect the farm slaughter process on an as-needed basis, for local Health Inspectors exist in all jurisdictions.

Monday, June 24, 2013

Soybean Price vs. Chicken Feed Price

Why is chicken feed price inflation

I talked about soybean prices, and compared then to live chicken farm gate prices in Canada and USA here.

I talked about Canadian feed industry and the growing concentration and market shares here, the major players in that feed market, and the price gouging they are imposing on Canadians disclosed here.

I showed here that there appears to be a chicken feed price conspiracy, where chicken feed has gone up 60% between 2002 and 2012, while cat & dog food has only gone up by 20% in the same time period, even though they use similar ingredients.

Soybean meal (48% protein) is one of the primary ingredients in all of these feeds.  Here is data from AAFC (Agriculture & Agri-Foods Canada) on Canadian soybean meal prices taken from advertised bulk prices.

We can see some market fluctuations, as occur naturally in a competitive market with supply & demand and new/old crop competition.  For the period between 1993 and 2013 (Year-to-Date), we have an average price increase of 1.99%/yr.

From 2002 to 2013, Canadian chicken feed prices rose 4.37%/yr on average.  Chicken feed increased at 219.6% higher than the major feed ingredient; soybean meal.

I wonder why?

Perhaps all of this can be easily explained by huge pay increases for the feed mill staff.  Assuming that soybean meal is the main variable cost which is 60% of the total cost, and fix costs are 10% of the total cost which is inflated at Cost of Living of 3%/yr on average, and employee wages are 30% of the total cost to make chicken feed, then annual raises of 9.59%/yr for feed mill employees who make chicken feed would explain this discrepancy.

If someone who works in a Canadian feed mill that makes chicken feed can contact us to confirm if they have been receiving 9.59%/yr pay raises, it would be most appreciated.

If the above theory of massive, continuous pay raises in chicken feed industry is all wet, then we can only explain this discrepancy as a conspiracy to defraud the Canadian public.

In that case, this latest data appears to be collaboration of my previous post that there is a dirty conspiracy going on upstream, within, and downstream of the Canadian chicken Supply Management system.

Assuming no massive pay raises, this fraud perpetrated on the Canadian public is costing Canadian consumers Billions of dollars every year. It is also weakening our entire Canadian economy.

What we need now, more than ever before in the history of Canada, is a strong, stable economy.

If the government chooses to be willfully blind and paralyzed to this fraud on hard working Canadians, then I suggest that the government is an accessory after the fact to this criminal chronic fraud for aiding and abetting the fraud,  The government is therefore a co-conspirator with all those who are directly involved in the fraud.

Are there any Crown Attorneys, Ministers, government bureaucrats, police, or citizens who are brave enough, frustrated enough, and intrigued enough to investigate further?

Is there anybody out there who is willing to help stop the carnage, and start the healing process?  

Friday, June 21, 2013

Are Small Flockers competent to care for live birds?

An anonymous visitor to Better Farming asked the following question:

Is it because most small flockers do not properly know how to look after their birds and the death loss is too high?  Most will think you just get them and let them run FREE !!!!

 On behalf of Small Flockers everywhere, I respond as follows:

Chicken Farmers of Ontario did a random survey & audit of small flockers, assessing them to the best practice standards and the regulatory requirements.  A copy of the CFO poster reporting on this study is available here, as that poster has been subsequently removed from CFO's website.

CFO received 238 mail-in survey responses, and did on-site inspections at 197 small flock farms.  The June 2012 report by CFC found that for SFG [Small Flock Growers]:

 "The majority of SFG surveyed  in Ontario adhere to biosecurity practices consistent with industry standard."

Since animal husbandry are one of the best practices covered by the audit, and there were no negative findings in the report on this issue, then I suggest that SFG's adequately meet these criteria.

In addition, I would suggest that SFG's success with the more recent biosecurity best practices would tend to indicate that SFG's do even better with the traditional animal husbandry issues.

Therefore I suggest that SFG's are equal to or better than the large commercial chicken factories for the care they deliver for their flocks.

Thursday, June 20, 2013

10,000 Pageviews & Counting

Since our launch on Feb. 28, 2013 we have received 10,000 pageviews from our fans and the morbidly curious.

We need to get every eligible voter in Ontario to be aware of this issue, estimated at 8.3 million voters.  Starting with 1 person, then doubling to 2,4, 8, 16,32,... doubling our exposure each time until we get to 8.3 million, this will require 23 doublings.

So far, we have achieved 13.27 doublings, which is 57.7% of our goal, so we are more than half way there.  As can be seen in the above graph, our progress has been consistent after the first week of startup.

Based on this linear progression of our doublings, if we hold the current trend steady, we project to have 8.3 million pageviews by April 13, 2014.

At that point, we will be ready to launch Phase II of our campaign to end the oppression of  Small Flock Poultry Farmers, and all Canadian citizens by the tyrannical chicken Supply Management system.

Cost of Production (COP), or a COP-out?

A debate is occurring on Better Farming website about Cost Of Production ("COP") and whether Small Flock Poultry Farming could possibly influence the price of chicken in the marketplace, or offer a cost-competitive product comparable to the mega chicken factories.

In a previous Blog posting, we discussed the plans of Chicken Farmer's of Ontario to revamp their method of calculating their COP.

There are many ways to determine a "fair price".  Wikipedia lists a total of 22 different pricing strategies.  I suggest all of them may be appropriate; open to be chosen depending on the seller's many purposes and goals.

Some choose to base their sale price on what competitor's are charging; then going plus, minus, or equal to that competitive price.  They assume competitors know what they are doing, or that is the best price that the market will bear; neither of which is necessarily true.

Some take the approach of pricing based on their immediate, out-of-pocket costs.  This is similar to those who drive a car and think the cost is limited to the gas consumed.  They forget or ignore the oil changes, tires worn out, wear & tear on the vehicle, dropping resale value as a higher km gets recorded on the odometer, depreciation, insurance, etc.  For a car, this is the difference between $0.10/km for gasoline alone vs. $0.50/km for the all-in cost; 5 times more than gasoline alone.

Some choose to price based on the next-best alternative.  It matters not what the actual cost is when you have a better "mouse trap". For example, a CD has the similar cost of production, whether it contains family photos of interest to a select few, music, or specialized software programs worth millions $.

Some Small Flockers see their eggs and meat production as their way of giving back to their community, just the same as being a volunteer at one of the many community groups.  Volunteers changing a "fair price" for their efforts is an oxymoron.

I challenge anybody to dismiss the volunteers in their local community as naive dupes, or to suggest they shouldn't be taken seriously just because they freely give away their time to a cause they feel is important.

Small Flock Poultry Farmers of Canada recognize this "calling" of being a Small Flocker, when we drafted Principle #13:

"Unlike the over-riding priority for maximum efficiency and profit sought by quota-based poultry farming, small flock farming is also about participation in the circle of life, an expression of life and participation in it, a spiritual practice that transcends the acts themselves; part of a higher purpose."

In the end, Small Flockers suggest that it isn't all about money.

"Not everything that counts can be counted, and not everything that can be counted counts."
                                                                                                William Bruce Cameron, 1963.

Friday, June 14, 2013

Congratulations CFO!

Well done CFO!

I hereby congratulate Chicken Farmers of Ontario ("CFO") for moving in the right direction with a quantum leap forward.

See, that wasn't so tough.  I did it!  I gave a heart-felt, no sarcasm included, honest complement to CFO.

While I have been a big critic of CFO, CFC, and SM in general, even I can recognize positive events, and give credit when credit is due.

Hopefully this initiative will soon resolve the unfair gouging of consumers by the bogus Feed Conversion Ratios (FCR) and the runaway prices for chicken feed where chicken producers directly benefit every time a supplier raises their prices, but the Canadian consumer gets stuck with the bill.

What has caused this earth shattering complement of CFO to occur?

The June 12, 2013 News Insights from Chicken Farmers of Ontario ("CFO") is a watershed in the Canadian chicken industry.

Can we hope that CFO's Board has learned (or been ordered) to be more reasonable, forward thinking, responsive, stewards for the greater good of the public, and all that kind of stuff?

The word cloud for CFO's announcement is shown on the right, words sorted alphabetically, and the size of font for each word is proportional to the frequency of occurrence in the document.  The colours are assigned randomly. 

The words I like seeing most are:
ability, accountability, best interest, best-in-class, collaboratively, confidential, controls, defensibility, disciplined, efficiency, encourage, ensure, ensuring, experienced, expertise, fair, fresh, independent, new, managed, measure, objective, process. relevant, reward, representative, responsive, stakeholders, statistical validity, statistician, strict, study, support, third party, transparency, together, true, and unbiased.
 Most of my favorite words are found in small font sizes, and therefore are of minimal significance for CFO, but it's a start.

We even have CFO's tentative deadline of Dec. 2013 for implementation.

I encourage mega-factory quota-holding chicken producers, readers of this Blog, government, and everybody else to contact CFO and congratulate them.

Send CFO an email here 
and let them know how you feel.

Who knows, CFO might like complements better than having boiling oil constantly thrown upon them. They might like it so much, they'll start doing more of the same.

It might become an addictive habit, seeking positive feedback from their stakeholders.

The Board may actually start doing effective leadership and management of their public trust.

If this keeps up, I and my trusty muckraking Blog may soon be out of a job.

Plaintiff for the Poisoned

The Reader's Choice, the all-time favorite Blog posting by readers is where I described the arsenic poisoning forced onto the public so that mega-factory, quota bearing chicken producers could earn an extra 4% profit.

See my April 2, 2013 posting Choose: Frankenstein Chicken, or Naturally Raised Chicken? which so far has collected a total of 1,819 views.

Why so popular?  I guess it's because people get really interested when they learn they have been chronically poisoned with arsenic-laced chicken without their consent.

I've seen reports that estimate 70% to 90% of the chicken from the mega-factory producers was laced with arsenic.  So if you ate chicken you bought from a grocery store between 1970 and 2012, you are a likely victim of arsenic poisoning at the hands of the Chicken Mafia.

If people are so interested in reading about this, perhaps they'd be interested in doing something about this, beyond reading.

I wonder if anybody has (or should) file criminal or civil (negligence, class action, or otherwise) charges against the mega-factory chicken producers for the administering of a noxious substance.

Section 245 of the Canadian Criminal Code reads as follows:
Administering noxious thing
245. Every one who administers or causes to be administered to any person or causes any person to take poison or any other destructive or noxious thing is guilty of an indictable offence and liable

(a) to imprisonment for a term not exceeding fourteen years, if he intends thereby to endanger the life of or to cause bodily harm to that person; or
(b) to imprisonment for a term not exceeding two years, if he intends thereby to aggrieve or annoy that person.
R.S., c. C-34, s. 229.
It should be noted that the Crown does not need to prove that the accused knew the substance was noxious, and that intent can be implied by the actions of the accused (see here and  R. v. Burkholder, 1977 ALTASCAD 8 at 32 ).

Where was Health Canada and CFIA when all this was going on?

Is there any Crown Attorney or lawyer in private practice interested in this case, or willing to advise further?

Thursday, June 13, 2013

Posting Progress

This Blog has now been active for 105 days, so I thought it would be a good time to assess our progress so far.

The graph above shows data for all 72 postings that have been done so far.  The vertical axis is on a logarithmic scale.  It appears that a posting gains most of its audience views within the first 72 hours, then slowly accumulates additional views the longer it is posted.  That is why yesterday's posting (ie. Days Posted= 1 day) shows as significantly above the trend line.

The second anomaly in the above graph is the April 2, 2013 posting Choose: Frankenstein Chicken, or Naturally Raised Chicken? which so far has collected a total of 1,819 views, likely due to the interest of people who have been chronically poisoned with arsenic-laced chicken without their consent.

Other than that, everything seems about the same for all the postings made so far.  When we look at the exponential slope of the thin black trend line above, we see that the average posting is gaining additional views at 3.12% per day that it is posted.  That rate has a doubling time of 22.4 days (ie. every 22.4 days, the number of views for the typical posting doubles; 70/3.12%= 22.4 days).

Using the average exponential gain for the average posting over time, and assuming 40 views on average in the first day, the cumulative aggregate total views for the average posting is shown above.

I'm quite pleased with that.  This means the word is getting out there.

People are paying attention.

They're getting informed.

Soon, they may get personally involved.

After that, some may get radicalized, and demand that change for the better must occur immediately.

I wonder when those demands for change will start to occur?

Wednesday, June 12, 2013

Spent Chicken = Cheating Chicken

Discussions about "spent chicken" or "spent fowl" have always been a hot topic in the chicken coops of Canada.  Now however, it's also a hot topic to the "Johnny Come Lately" Chicken Farmers of Canada ("CFC"), and Chicken Farmers of Ontario ("CFO").

For wannabe farmers, "spent chicken" includes old egg laying chickens who are past their prime, or old hens and roosters from egg hatcheries.  Due to the limited alternatives, they are often sold for close to nothing, so the cost is just the trucking expenses to the slaughter plant.  The alternative to to kill them on-site and landfill them.

I did an advanced Google search of CFC's website.  It is first mentioned in the CFC's 2010 Annual Report about "spent fowl" imports, declaring  it as a critical priority for 2011.

For CFO, a similar Google advanced search turned up the following in their April 10, 2013 News Insight

"However, we are now faced with an unexpected, unprecedented, and potentially catastrophic level of spent fowl imports which undermines the principles of the alignment initiative."
Sounds pretty serious.

But unexpected?  If CFC had it as critical priority in their 2010 Annual Report released on Mar. 18, 2011 why is it such a shock and surprise to CFO 2 years later?  Do these guys at CFC and CFO talk to each other?

When did this really become an issue?

Let's look at the data from Statistics Canada.

The graph above shows data from StatsCan CANSIM Table 002-0010 (Add/Remove data to suit).  There appears to be "business as usual" for 1999 to 2002, but a statistically significant dip, with a correlation coefficient of 74.7% is plainly visible as of 2003 (see yellow line in graph above).  That should have been their first clue.  Rarely is there a statistically significant change without a reason.  After 2003, the spent chicken imports start to rise, and rise rapidly at an exponential rate of increase.

The leaders of this "spent chicken solution" become more emboldened.  The leaders gain followers.  Soon, the majority of the players in the SM system are doing it.  Once it starts to rise, it goes up exponentially, at a rate of 10.79% per year increase.

That means the imports of spent chicken are doubling every 6.5 years (70/10.79%/yr= 6.5 years).

It is obvious that the change started in 2003, and could have been noticed then.  CFC, CFO, the government, and all others in the SM system should have been aware as of 2003.  However, CFC goes on the public record about this issue in 2010, and CFO officially noticed it in April 2013.

CFC and CFO, the Rip Van Winkles of the chicken industry, asleep at the switch for 7 and 10 years respectfully, finally comes out of their comas.  Some of you may have thought that CFC's and CFO's catatonic comas made them permanent vegetables, but you were wrong.  They came back to life, and finally noticed the world around them.

Of course, they would jump right to it, and get this spent chicken problem resolved, right?  Not so fast.  We're not talking about Flash, the Superhero, we're talking about CFC and CFO.

For CFC, its been 3 years since they noticed the trend, and they are still wringing their hands in worry and desperation.

CFC says there is no way to tell at the border if it's an old layer or a young broiler.   I beg to differ.  Check out the Canadian Border Services Agency document which defines a "spent fowl":

MEMORANDUM D10-18-4 August 14, 2009


25.(e) “spent fowl” means a mature bird of the species Gallus Domesticus that does not have a flexible cartilage at the posterior end of the sternum and does not have tender meat or soft skin of smooth texture. Only the older birds develop a bony sternum, also referred to as a breast or keel bone, as opposed to the young birds that have a youthful cartilaginous sternum. The primary purpose of these fowls is not for meat production but for other purposes, for example, hens for laying. Once these fowls are no longer productive, they are considered “spent” and, at that point, are destined for slaughter. “Spent fowl” are also referred to as stewing hens, boiling fowls, pot roasting hens, mature chickens, or old roosters (see tariff items 0105.92.10, 0105.93.10, 0207.11.10, 0207.12.10, 0207.13.10, 0207.14.10, 1601.00.23, 1602.32.11, and 1602.32.92).
Whole chicken can be inspected for the skin and breastbone condition.  I can tell the difference between an old layer and a young broiler, so I think a CBSA officer can too.  For non-breast and skinless products, it's a little more difficult, and this may require a certificate from a USDA inspector who witnessed the processing of the birds.

Why are we still waiting 3 years since coma time, or the 10 years elapsed from when it was first discoverable?

These are the same guys who love crushing Small Flockers like a bug, but they can't take action about processors and others who have invented a method to get around the Supply Management ("SM") rules that everybody loves to hate.

I happen to disagree, but CFC and CFO are supposed to love SM, and think its the greatest system and solution.  Why don't they defend their false god with their lives when it is threatened like this?

Why are CFC and CFO standing in the middle of the road, frozen with fear in the headlights of the approaching car?  If they think that SM is the savior of Canada, and SM is under attack, why won't they act?  Does CFC and CFO have friends in high places with the importers?

Have they been bought off?  Is this willful blindness by CFC, CFO, and others?

Assuming that the 1999-2006 baseline of 47.29 Million kg per year is legitimate spent fowl, then the current level of imports of 107.2 Million kg contains 59.91 Million Kg of Cheating Chicken, contrary to SM's rules.  CFC tells us that about 49% of that spent chicken is arriving as Boneless breast meat, a Canadian favorite.

If this 59.91 Million kg of Cheating Chicken wasn't imported, somebody in Canada would be growing it.  Notice that quota in Canada has been close to flat during this period.  CFC reports in 2012 that per capita chicken consumption is flat.  They also report a total production of 1091 Million kg. eviscerated for Quota Periods A-108 to A-114, or an average of 155.86 Million kg. eviscerated per quota period.  Therefore this Cheating Chicken is 5.49% of 2012's production.  If you are reading this, please be sure not tell tell any of the quota-holding mega farmers, as they may get upset with CFC and CFO as to why they are cut back while the Cheating Chicken continues for more than 10 years at the farmer's expense.

At a doubling every 6.5 years for Cheating Chicken, we only have to wait another 37.5 years for Cheating Chicken to become the entire chicken supply for all of Canada.  Supply Management for chicken will finally be a dead dinosaur in just another 37.5 years at current rates.  Mark your calendars for Year 2050, the Wicked Witch of Chicken Supply Management will finally be dead.

The 2013 Canadian average retail price of whole chicken is $5.51 per kg., and the boneless, skinless breast is $11.27 per kg., so we have a weighted average price of $8.39 per kg.  At 59.91 Million kg per year of Cheating Chicken, that's a total $502.65 Million per year in Cheating Chicken.  Not a bad source of extra cash for the importers.

As bad as it is for quota-holding producers, it's worse for the Canadian consumer.  Remember, it's the Canadian consumers who pay the high price of these windfall profits gained by the importers.

Will the gouging, disrespect, and persecution of the Canadian consumer never end at the hands of the SM Mafia?

If the importers of this chicken had to pay the proper import tariff, it would have been 238% or at least $1.67/kg under Tariff Code 0207.11, 0207.12, 0207.13, or 0207.14 (see CBSA's Tariffs current version as of July 1, 2015).  This is lost revenue to the Canadian government, money that will now have to be taken out of the wallets of Canadians.

When will the suffering and abuse be stopped?

Monday, June 10, 2013

Getting Ready: OMAF Tribunal Appeal

Now that Ontario's FPMC (Farm Products Marketing Commission) has refused to intercede on the behalf of Small Flockers against Chicken Farmers of Ontario ("CFO"), our next course of action is to Ontario Ministry of Agriculture Appeals Tribunal ("OMAF Tribunal").

I sent an email to the Tribunal, asking a number of questions about this important next step.

I got a very nice response from them, very helpful, they answered each question in a straight forward manner.  I was impressed.  Well done to OMAF's Gloria Marco-borys and/or her team!

If the Tribunal operates as well as this initial response, there is hope for us yet.

My questions and OMAF's answers are here.

Saturday, June 8, 2013

USA vs. Canadian Chicken to Feed Price Ratios

Why is US chicken getting cheaper and cheaper, yet Canadian chicken is getting more and more expensive?

Let's take a look at the underlying data.

About 60% of the cost of producing chicken meat is the cost of the feed.  Corn and soybean meal are usually two of the main components in chicken feed.  Here is some USA data on the price comparison between Chicago Board of Trade ("CBOT") 48% soybean meal and whole fresh chicken at the dock in Georgia USA.  As you can see, chicken-soya ratio is dropping, meaning better & better yields and efficiency.

 The Canadian price of soybean meal is usually defined by FOB Hamilton, as the majority of soybeans are grown in Ontario, there are two large mills in Ontario (Bunge in Hamilton and ADM in Windsor), comparable in tonnage.  Here is a graph that shows soybean meal price FOB Hamilton compared to CBOT.  Note there is a small consistent premium price for FOB Hamilton, about $25 per MT.  Trucking costs for the feed to the farm is usually another $20/MT.  I suggest that this indicates prices are maintained the same in Chicago and Hamilton, with arbitrage and trucking charges being the only difference.  Free trade at work.  If either Chicago or Hamilton get arrogant in its pricing, soybean meal quickly gets trucked from one centre to the other, regaining competitive balance.

 Below, we can see a comparison of Canada vs. USA on their chicken to soybean price ratio, Canada in red and USA in blue.  Note that Canada is steadily rising, while USA is steadily dropping.  US is getting better, Canada is getting worse.


I suggest Chicken Farmers of Ontario ("CFO") has some explaining to do.  Does anybody at CFO look at data like this?  If not, why not?  Isn't that something they should be doing, helping to explain trends to their member farmers, and help them decide that this is important, and needs to be addressed.

Does CFO even care?

Is CFO chicken of facing the truth?

Or does CFO prefer to stick their head in the sand like an ostrich?

Friday, June 7, 2013

What changed first, SM or the Tariff?

Last June, Susan Mann of Better Farming wrote about Al Mussell's published report (Sr. Research Associate at George Morris Centre in Guelph ON) suggesting that Supply Management ("SM") didn't need to be scrapped, we just need to allow greater access to the Canadian markets to satisfy our trade partners under WTO (World Trade Organization) and/or TPP (Trans-Pacific Partnership).

The article says that foreign commodity producers want access to Canadian markets, the second largest in the TPP negotiations.  I agree.  However importers don't have access to all of Canada's market.

For chicken as an example, foreign chicken can enter Canada at an import tariff cost of 0% (NAFTA) or 5% (WTO) under TRQ. TRQ quantities are limited to just 7.5% of the total kg consumed in Canada.  After that miniscule market access is exceeded, importer must pay a 285% import tariff cost.

100% of the 2nd largest market is significant, and worth going after under TPP and WTO.  7.5% of the second largest market is more trouble than its worth, for you need bilingual labels, learn all of the intricacies of the Canadian market, form a Canadian supply chain, etc.

All of the above keeps Canadians paying for the most expensive chicken meat prices in the world.

The farmers get some of that gravy as COP (Cost of Production), but the vast majority of those price gouging profits go to others up & down the food chain (ie. chicken feed companies, processors, supplementary processors, distributors, retail, etc.).  Gravy train for everybody, except the consumer, who pays for it all.

If the 285% import tariff was reduced, more foreign chicken would soon enter Canada, and everybody would take a hit to their gravy train.  Eventually, as everybody in the chicken supply chain got hungrier, retail prices would drop.  Anybody working under the arcane rules of SM would be at a considerable disadvantage, and they'd start to drop like flies, or be bought up by foreign suppliers for pennies on the $, because an asset caught in SM's web of fossilized bureaucracy is close to worthless as the import tariffs drop farther & farther.

Dropping import tariffs without first removing SM is a good way to kill the entire domestic chicken production system.

I think we need food security first & foremost, which means we want to ensure we can feed ourselves, even when imported chicken is no longer available.

Same logic applies to all other SM commodities.

That means we must keep the 285% import tariffs on chicken until something else is changed first.  I wonder what that something else will be?  Do you think it might be SM?

Thursday, June 6, 2013

Off to the Tribunal we Go!

Slowly but surely, we are moving on my complaint against Chicken Farmers of Ontario ("CFO").

Quick Recap

Feb. 5, 2013     I filed my complaint with CFO
Feb. 25, 2013   CFO thanks me for my feedback.
                         To me, it seems CFO has filed it in the round filing cabinet on the floor (ie. garbage can)
Feb. 25, 2013    I request hearing of my complaint before CFO Board
Mar. 1, 2013      CFO acknowledges my request, Board will consider my request
Mar. 21, 2013    CFO Board decides to decline hearing, and waive their right to hear my complaint
Mar. 26, 2013    I send letter asking FPMC to intercede on my behalf with my complaint against CFO
May 23, 2013     FPMC refuses to intercede with CFO, refers me to OMAF Tribunal
June 6, 2013      I send email to Tribunal asking for information on how to proceed with complaint.

Four months of bureaucracy and delays.  It seems Canada grows some of the best bureaucracies and red tape in the world.

I'm going to need lots of help & advice on this Tribunal.  I assume we have one chance to get it right.  I've never done a Tribunal before so I'm looking forward to suggestions from all the jailhouse lawyers out there to advise & guide me on how to make this effort successful.

Wednesday, June 5, 2013

Clarification of non-SM Product Auctions

In a previous Blog post, I outlined our draft plan for ending Supply Management ("SM")for all of Canada.

I proposed a truncated k-double auction.  By the number of inquiries I have received on this, it appears I need to supply some more details on this proposal.

When doing a double auction, there are a few optional methods that need to be specified.  My suggestions are as follows:

  1. Everybody who submits a bid or ask will pay/receive the same price if cleared.  For somebody who was willing to pay a lot more, they end up getting it cheaper than they hoped for.  If someone bid too low, their bid won't be accepted as it was below the strike price that everybody enjoys.  If someone was asking for a low price, they may end up getting a lot more than what they had asked for.  If they asked for too high a price, their asking may be above the strike price, and they won't be selling their commodity during this auction.  This system minimizes the need for guessing what everybody else is bidding.
  2. I suggest there will be multiple auctions for each quota period.  This enables producers and processors to make a recovery play if their bid was way off in the previous round.  There can be a problem with multiple auctions.  If everybody plays nicely, there won't be a problem, they re-set their bids (if they so choose), and they can get their commodity bought or sold in the next round.  However, some may think they have the other side over a barrel. For example, a producer might figure than he can leave his chicken barn empty if he has to, but the processing plant absolutely MUST have a supply of chicken, so the producer significantly jacks up his asking price for a second round of auctions.  It can tend to polarize the remaining bids to the extremes of the pole, rather than bringing buyers and sellers together.

    I therefore suggest that the first auction is only for within your home district.  If you are not located in that District (buyer or seller alike), you cannot put in an offer.  For Chicken Farmers of Ontario, there are 9 Districts, and each producer and processor would submit their bid/ask to the auction for their home district.

    District Map for Chicken Farmers of Ontario
    If they were not totally successful in buying/selling all that they needed, they would have a second chance in the province-wide auction.  With more players, if they wish to play games with their bids, they will most likely be left sitting on the sidelines with no transactions in the next quota period.

    A third auction can be held for those who still want to sell/buy, adding in additional buyers/sellers from within Canada but from a different province (ie. inter-provincial bids).

    A final auction can be held for those who still want to buy/sell that would include inter-provincial as well as foreign bidders.

    For transportation purposes, all winning bids/asks will be matched at their strike price so as to minimize transportation costs, as previously defined.

    If someone failed in all 4 rounds of auctions, they weren't trying hard enough, or they need to find a new career.

    Automated by software on-line, each auction could be done in 15 minutes.  Time would be allowed between auctions for people to reconsider their positions, seek advice, and to type in their chosen bids.

    This system will give preference to domestic production, if the buyers & sellers so choose.  If the local suppliers or producers are bad actors, customers will skip that auction and go to the next.  If the end, the customer gets what they want.
  3. Some commodities are done in batches (eg. broilers, turkeys).  Other SM-commodities have a continuous flow (eg. milk, table eggs), which cannot be easily shut off and re-started.  This could  cause a market imbalance between producers and processors.  A milk plant can more easily clean out the plant, lay everybody off, and wait for better milk prices, or better auction results.  The farmer isn't so lucky.  To make things more balanced, it is suggested that long term "take-or-pay" contracts could be established for each commodity, for example a 3 to 5 year production quantity, well in advance of the start of the start of delivery.  When that is close to expiry, the farmer can decide to retire that cow, or continue milking her and sell her milk on the more lucrative spot market (ie. month by month).
Lots of opportunity.  Lots of choices.That's what I like!

This posting has been used to upgrade the draft plan from Rev. #3

Monday, June 3, 2013

Meat Regs: More at stake than meat

Ontario Ministry of Agriculture and Food ("OMAF") is reviewing their Meat Regulations.  When they held public information meetings on their proposed changes, I attended the Sudbury meeting.  See my previous report after their public information meeting.

I finally finished it and filed Small Flocker's recommendations and comments with OMAF. Small Flocker's comments and recommended improvements on Ontario's current Meat Regulations are available here

Some of the issues I raised are as follows:

Food Borne Illness Outbreaks
Food borne illness in the US is estimated at $77.7 Billion per year.  We might therefore estimate Canada's impact at $7.77 Billion per year, 10% of US total.  Similarly based on US results from CDC, Canadian food borne illness outbreaks (ie. many individuals over a large area affected) from meats and poultry (ie. excludes fish & seafood) probably account for 22% (n=210,000) of the outbreaks, 22% (n= 572) of the resulting hospitalizations, and 29% (n=18) of the deaths.

Sporadic Food Poisoning
Add to the outbreaks described above are the sporadic food borne illnesses (1 or a few people, closely contained). More than 9 million persons each year in the USA have a food borne illness caused by a major pathogen, so Canada probably has 900,000 sporadic illnesses per year.

Poor Diet due to high cost of Meat
There is growing understanding by food nutrition experts  that excess dietary carbohydrates are causing or contributing to significant incidence and prevalence of multiple diseases such as obesity, diabetes, Alzheimer’s, arthritis, metabolic syndrome, cardiovascular disease, high blood pressure, cancer, etc.  See Dr. Lustig here and here, Gary Taubes here, and Dr. Jay Wortman here and CBC Television Documentary here

Health care is more than 40% of Ontario’s Provincial budget, and these dietary influenced diseases are directly and indirectly related to most of these health care costs, possibly up to 70% of these direct and indirect health care costs (ie. 70% of 40%, or a grand total of 28% of Ontario’s budget caused by poor diet).  Ontario’s 2013-2014 budget for healthcare is $48.9 Billion per year.  This total diet-related tax burden is suggested as 70% of this total annual budget, representing $34.23 Billion per year, a significant cost to Ontario.  The cost of food borne illness can be added as well, further raising the stakes.

I suggest that this $34.23+ Billion health care cost trumps the total value-added GDP of $8 Billion per year that is created by Ontario’s meat industry.

If meat protein and the accompanying animal fat is more affordable and available, this can help reduce these food-induced risks and disease burden for Ontario.

When considering the Meat Regulation amendments and these specific recommendation, it is suggested that this indirect cost to Ontario of $34.23 Billion per year be kept in mind.

Meat Export Opportunities
I previously posted about the appalling, weak-kneed meat export business Canada has for chicken.  In 2012, CFC reported that Canada produced 1.0247 Billion kg of chicken, at a price of $1.80/kg or higher.  We calculate a total value of $1.844 Billion.  If OECD exports can allow us to increase our production 5 times 2012 levels, that's an additional $7.378 Billion in GDP for Canada.  Ontario's share would be about 1/3 of this, or $2.46 Billion.  Assuming a 3:1 spin-off effect, that is a total of $7.378 Billion of additional business for Ontario.

Grand Total

When we add up all the above, we get a grand total in excess of $41.61 Billion per year that is directly affected by this Meat Regulation revision process.  I hope OMAF gives it the attention it deserves.

There is more at stake than just meat.