Tuesday, December 24, 2013

Ontario Chicken Prices

How does Ontario chicken prices vary?  SFPFC's Market Research Dept. (me) has been collecting data on a haphazard non-scientific basis from 2013-11-28 to 2013-12-22.
Figure 1: Basic statistics for Ontario chicken meat prices, $/kg

The basic statistics in Figure 1 for the chicken meat prices in Ontario, shows the minimum, median, mode, average, maximum, standard deviation,  and coefficient of variation (%).

The minimum chicken price found by SFPFC's survey was $4.98/kg on 2013-11-28 at GG's Grocery Store (small independent) in Little Current Ontario for "VCP Chic Leg Quarters".  I was told "VCP" was short form for "Value Club Pack", meaning it was a large tray of chicken, for "buy in bulk" savings.

Figure 2:   He PingPing (on left), the world's shortest man at
that time, just 2 ft 5.37 in (74.61 cm) tall, died in 2011 at the
age of 21.  On He PingPing's right is the world's
currently tallest man. Sultan Kosen, 8 ft 1 in (246.5 cm).
 These two men have a height ratio of 3.30
The Median is the value where 50% of the prices are higher, and 50% are lower.  When a high %CV occurs (see below), the Median is often more representative of the sample population than the Average value. The Mode is the most frequently occurring price.

A CV of 52.36% is quite excessive.  Another way of showing this large variation in values within this population is that the maximum price is 6.02 times the minimum price.

As a comparison for this degree of
variation within a population, note that the world record tallest man was 8 ft. 11" tall, while the world record shortest man was 1 ft. 10" tall, which is a 4.86 ratio of heights.  In Figure 2 we see the 2011 meeting of the current record holders, who had a 3.3 height ratio.  The all time record is 4.86 for human max/min height ratio.

Compare that to the Ontario chicken market with a max/min price ratio of 6.02 

Figure 3: Histogram of Ontario Chicken Prices, $/kg
The histogram of the 46 data points for Ontario chicken prices are shown in Figure 3.

When we look at the histogram in Figure 3, we can likely see at least two separate distributions or populations that are combined together in the marketplace.  The first distribution appears to be from $4.98/kg to around $25/kg, which seems to be the bargain basement, plain chicken cuts.  The second distribution seems to go from $25/kg to $29.975/kg. which are the premium, branded, prepared (eg. seasoned, specialty, etc.) chicken, or pre-cooked ready to serve chicken.

The description of the various cuts of chicken may give us a clue as to the reasons for the wide variation in prices.
Figure 4: Ontario chicken meat prices $/kg. vs. type of cut
and other specifications

It appears that sequence of prices from the lowest cost to the highest cost is:
  • chicken legs
  • whole chickens
  • flattened whole seasoned chickens, back missing
  • chicken thighs
  • chicken breasts
  • boneless, skinless chicken breasts
  • organic chicken
  • PC Free (no antibiotics) chicken
  • cooked & sliced chicken
  • branded boneless, skinless chicken breast
It appears that some processors are trying to get super premium pricing, but this isn't totally successful, as these sky-high prices likely result in significant losses from expired product that never sold, or discounted product as the expiry date approaches.

In a previous Blog posting (see Chicken Price Parity:  Will it ever come? and Chicken Monopoly Pricing), I showed that the Canadian chicken price as defined by Statistics Canada was steadily increasing by 3.54%/yr for the last 17 years.  Returning to StatsCan's CANSIM Table 326-0012  we find that the Canada-wide chicken price as of Nov. 2013 is $6.99/kg.  SFPFC's average price for Nov. - Dec. 2013 was $13.63/kg., which is 1.95 times Stats Can average price.

Stats Can data is for farm gate pricing paid to producers, as defined by StatsCan Report 5039.  SFPFC's data is for retail prices.

The US retail composite chicken price per USDA for Nov. 2013 is 195.6 cents per pound (ie. $4.30 per kg.).

With a minimum Ontario retail price of $4.98/kg and a composite average US price of $4.30/kg, this lowest Ontario price is 15.81% higher.  Was this cheapest Ontario chicken old, soon to expire its best-before date, and therefore on deep discount pricing for quick sale? Unfortunately, this is  unknown, and we can only speculate.

Therefore retail price of chicken in Ontario Canada for Nov. 2013 is 316.98% of US retail chicken prices.

Proof again of the monopolistic, unjust, price gouging of Canadians by the #ChickenMafia.

No comments:

Post a Comment

Off-topic commercial spam that's posted so as to help sell your wares will be deleted.

On-topic comments, where you behave yourself and play nicely, will remain posted; whether they are pro or con. Everybody needs to fully understand all points of view so that we can find a solution that encompasses everybody's concerns. Give it your best shot.

If you decide to post, your posting becomes part of the public record, and SFPFC has full rights to use it (or not) in any reasonable manner or medium that suits our purposes.

Before posting, please proofread, and correct as necessary. If you subsequently discover a need to fix your previous posting, make an additional posting that refers to the original posting, then set the record straight.