Sunday, December 1, 2013

Give Credit where Credit Due

With a small but significant improvement achieved in Nova Scotia (See Blog posting Aaron's Eggs), I thought I'd write something nice about the #EggMafia.  After all, it's been kind of rough for them in the last little while after the chicken abuse allegations against them in Alberta (see Breach of Trust by Egg Mafia?).

The Nova Scotia Egg Producer's website is locked down tighter than the NSA computer systems that Snowden hacked; its nothing more than name, rank, and serial number, with or without water boarding.

Still looking for something else in an #EggMafia annual report that I could complement, I tried the Egg Farmers of Canada Annual Report for 2012.  Surely there had to be something in there that was truly positive.

I found it.  Here it is:
Figure 1

EFC shows steady, continuous improvement in the number of eggs layed per year per chicken (+25% from 1976 - 2009), as well as feed conversion ratios for layers (-20% from 1976 - 2009).

Consistent improvement, and significant.

I was impressed.

Then I started to think.

Soon after that, my good intentions dissolved in a pool of battery acid in the pit of my stomach.

If #EggMafia had achieved all this greatness, then why do egg prices keep going up and up, and we're now paying 52.6% more for eggs than the same quality in the US?

If that's what they call improvement, the #EggMafia can keep it.  Obviously, if the #EggMafia was improving, they were keeping all the gold for themselves, and giving us the mine shaft.

To prove my suspicions, I needed more data.  Statistics Canada, here I come.  What a treasure Stats Can is.  Thank-you Federal Government for not slashing the guts out of Stats Can, and thank-you to all the hard working people at Stats Can who slave away with little recognition for a job well done.

CANSIM table 003-0020 had what I was looking for.  Data going back to 1920.  Wow, what a gold mine of info.  I was soon downloading, analyzing, and graphing the data.

Here is what I found.  I split the data into pre-CEMA and post-CEMA.  CEMA (Canadian Egg Marketing Agency) was formed by Federal Government Proclamation on Dec. 15, 1972, announced by the newly minted Hon. Minister of Agriculture Eugene Whelan.  If CEMA was doing its job, everything should be dismal before CEMA, and coming up roses after CEMA starts to save the world.
Figure 2

What really happened in Canada's egg industry?

In Figure 2, the red data is from 1920 to 1972, with the gold trend line calculated as best-fit by Excel spreadsheet.

The same colour scheme is used for the next 4 graphs:
  • Red for pre-CEMA
  • Gold for pre-CEMA trend line
  • Blue after CEMA started
  • Purple for trend line during CEMA's dynasty.
 Shortly after CEMA's 1972 startup, the number of layers started to drop (blue coloured data with the purple trend line).  Why?  I don't know.  Were farmers wary of CEMA, and its bureaucracy, and threw in the towel?  Were fewer layers needed due to the egg buy & store fiasco that was one of the reasons for forming CEMA? If you know, give me a call.
Figure 3

In Figure 3 we have the Canadian egg production data.  After CEMA got started, egg production dropped off significantly.  The slope of the two curves are 63.4% different.  What did CEMA do, or fail to do?

Contact me if you know.

In Figure 4 , we have data on the very important layer productivity (ie. the number of eggs produced by each layer during a year).

Figure 4
Before CEMA, the red data with the gold trend line shows that the individual farmers working with the Provincial Ag. Specialists were doing pretty good, with a consistent rate of improvement.

Once CEMA took over, we have the blue data with the purple trend line, and the rate of improvement significantly slows down; a 37.7% drop in the rate of layer improvement.  Thanks CEMA, you screwed up a good thing that the farmers had going.  If it wasn't CEMA directly, then it happened during their watch, and they sat by idly while it happened.  Either way, everybody is worse-off since CEMA has been in charge.  Here we are 41 years later, and we still suffer the same defect
Figure 5
introduced with CEMA.

In Figure 5 we have the total value of all eggs produced by Canadian farmers.  The red data before CEMA was created was increasing at a reasonably slow linear rate.  Once CEMA came on the scene in 1972, the value of eggs produced exploded exponentially.  Was this a good thing?

Figure 6
We previously saw in Figure 3 how the egg production slowed after CEMA was created.  If the amount of eggs produced is slowed down, the only way to create an exponential explosion in GDP is runaway prices that Canadian consumers are forced to pay.

Figure 6 shows the egg prices.  Note that the red data before CEMA existed  is almost flat and constant; little or no inflation.  Once CEMA is created in 1972, fasten your seatbelts for price explosions started immediately.  CEMA has been consistently raising egg prices ever since 1972.

Remember, these price increases at the farm gate are in spite of improvements in feed conversion and eggs layed per hen.  CEMA took all of those improvement for the #EggMafia members, and then jacked up the egg prices, screwing the consumer even more.

Thanks CEMA.  Thanks for nothing.

So much for my good intentions of wanting to write something positive about the #EggMafia.  Better luck next time, I guess.

Statistics Canada data clearly shows that CEMA has created egg price inflation, and not much more.

So there you have it.  Is it proof positive that the Supply Management system is a parasite sucking the blood from Canadians?  Maybe not, but it's certainly prima facie evidence that the #EggMafia needs to be asked some very tough questions.  The #EggMafia needs to prove that it's worth keeping around for another 40 years. If they can't prove that beyond a reasonable doubt, it's time to stop this Frankenstein experiment with Supply Management, and admit it has gone terribly wrong.

We need to pull the plug on the #EggMafia and SM5 before the damage gets a lot worse.

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