Artisanal Chicken: Is it Working?

I have been contacted by a number of people, curious to know my experiences with raising chickens under the Artisanal Chicken program of Chicken Farmers of Ontario ("CFO").

Application deadline for new entrants for chicken farmers to join the Artisanal Chicken program for January 2017 closed as of 2016/09/09.  However, true to form, CFO has changed the rules at the last minute, and has extended the CFO Artisanal Chicken deadline to 2016/09/30.

Therefore if you are an Ontario chicken farmer (or wanna be), there is still time to join the Artisanal Chicken pioneers.  CFO doesn't share all of the details, but I will.  Here is the info you need to make a great decision.

1. In short, as an Artisanal Chicken farmer, CFO has treated me in a friendly, respectful, and reasonable manner.  Lord knows they had reasons to do otherwise to me due to this Blog.  More or less, CFO has left me alone to grow my chickens. If they have treated me well, they will likely do the same for you and other Artisanal Chicken applicants.  Of course, all that can rapidly change whenever CFO unilaterally decides.  Trust takes along time.
2. CFO reserves the right to terminate the program any time they feel like it.  Of course, if CFO did that (or some other big player in the Supply Management system forces CFO's hand for their self-serving monopolistic, crony capitalism reasons), that would leave me and most other Artisanal Chicken farmers financially stranded with no recourse.  I doubt I could scream "Unfair" loud enough to make a difference within a reasonable time.  If you borrow money to do Artisanal Chicken, you will be at suicidal (or significant) risk until you get the loan paid off, likely losing everything if CFO harpoons you, you become a beached whale, and the bank come to collect its pound of flesh.  Knowing (or fearing) CFO, I would recommend against borrowing money to enter the Artisanal Chicken system.
3. After you apply, CFO will come to your farm to interview you and view your farm, barn(s), and infrastructure (eg. water supply, barn yards, pasture, etc.).  My audit was very low key and accepting of where I was staring from.  CFO currently seems to accept you where you are currently at, and makes allowances for you to learn and grow into the program.  You are not expected to be perfect, nor to have everything already in place (eg. your barn doesn't have to be already built before applying).  Of course, CFO could change that approach tomorrow, so be ready.  You should have a reasonable plan for each step that you will have to achieve for your entire first year as an Artisanal Chicken farmer.  I would suggest it would be frowned upon to tell CFO "If approved, I will buy 500 day-old chicks, and once they arrive, I'll figure out what I'll do next", and you likely won't be approved by CFO with this half-baked plan.
4. CFO will likely approve your reasonable plan and application, as there is more quota available than farmers available to fill it. I base that upon CFO extending the application deadline.
5. CFO has a tendency to notify tour acceptance at the last minute, which put me at great disadvantage, requiring me to start construction on January 1st.  It wasn't easy.  Be prepared for that.
6. Once approved, CFO will send you a bill for immediate payment of CFO's fees & levy & license for the entire 2017 year.  Your cash flow for capital purchases will be stretched even thinner by this, but that is CFO's desire to make sure they get their pound of flesh.
7. You may not be able to get the chicks you want, when you want them.  Call your hatchery before you apply to find out the details and get a tentative commitment (eg. if you get approved by CFO, the hatchery will guarantee to supply you the chicks you need).  You may have to order chicks 6 to 8 weeks in advance.
   
    
8. Once you start, be prepared to continue along your plan, assuming all goes according to plan.  If you hesitate at each step, awaiting proof that each step works as you hoped before you move forward to the next step, you will be lost before you get once through.  Plan well, think about all of the things that could go wrong, what is the earliest point you can detect plan failure, and have remedial plans ready for each of those major risks.  Once you have your plan perfected, put the accelerator to the floor and go for it full speed.  You can re-assess further at the end of your first year.
9. Abattoir capacity is likely even more constrained than hatchery supply.  OMAFRA has admitted that they nearly killed all of Ontario's small local abattoirs 5 to 10 years ago, and we're still recovering from their bureaucratic mistakes.  I suggest you have a primary abattoir who will process 66% to 90% of all your chickens, and a backup abattoir who will do 10% to 33% of your chickens.  That way, you have a foot in the door if your primary abattoir has a problem and can't serve you as you need.
10. Due to the long trip to the nearest abattoir, economics said I must raise flocks of 500 birds to keep costs down.  Therefore, I needed a brooder that could handle 500 day-old chicks, and maybe some turkeys and ducks.  I chose a 40 ft. decommissioned sea container.  I made the necessary customizations to create a state-of-the-art brooder.  A

    

    Inside a brooder compartment with 100
    chick who are 2 days old, maintained
    at 35 deg C, 2 drinkers and feed trough.
    An electric radiant heater is shown at
    the bottom of the photo, added to
    each compartment for the first 48 hrs.
    for those chicks who need extra heat.

    
    

    

    Roof vent cut into steel roof of sea container

    
    

    

    Inside the brooder, showing the 6 compartments (4' x 6' each),
    with a 2' wide aisle on the right, and sheets of Silverboard
    foam wall insulation as lids, 3 LED lights in each
    compartment, and fresh air makeup distributed to each
    compartment via a 4" diameter pipe (5 compartments
    currently in use @ 100 chicks per compartment)

    
    

    

    Propane fired hot water heater (from travel trailer),
    and hydronic heating system for brooder.  Each brooder
    compartment has a separate radiant floor heating zone

    
    
    
    

    

    Fresh air inlet to brooder, with hot water heating coil to
    pre-heat air to 35 degC

    
    
    
    
    
    
    
    
    
    
11. You will need to do some CFO training via watching 1 or more video.  While this is a mandatory requirement, CFO still doesn't have this set up so it can be accomplished, so I have not yet been able to accomplish this step 10 months after CFO approval.
12. You will need to prepare a written farm manual saying how you will meet all of the mandatory requirements of the CFO and Chicken Farmers of Canada ("CFC").  Fortunately, CFO has a template manual as a Adobe Acrobat pdf form.  You can fill in the form on your computer and print it off, or print the blank form and fill it in via pen & ink.  The CFO form is a little flakey (ie. the form has limited space in the fields, and won't print properly if you have a long answer).
13. CFO will do an on-farm audit to see if you are in compliance with your stated methods described in your farm manual.  For example, your manual says what you plan to do, the on-farm audit ensures you are doing what you said you would be doing.
    
     
14. You will need to keep documentation on a daily basis to support and prove that you are following your plan (eg. brooder temperatures, mortality, treatments, chicken feed retention samples or Lot Code numbers, etc.).
15. I have a 17 to 23 hr day when I go to the abattoir, starting at midnight to catch and crate the birds.  You will likely need some help.
16. Your vehicle will likely be contaminated by the live birds on their way to the abattoir, and want a clean vehicle before loading your eviscerated meat so it doesn't get cross contaminated.  I have limited vehicle space, and can't afford to make 2 trips to the abattoir (ie. one trip to take live birds to the abattoir, a second trip to pick up the cold, eviscerated meat).  To solve this problem, I had to design a insulated 4' x 8' x 4' cooler box that is stored in pieces in the back of my pickup truck while I travel to the abattoir with my live birds in crates in my trailer.  Once I have offloaded the birds at the abattoir, I go to a truck wash to clean the empty crates and trailer, offload the crates, build the cooler box in the trailer, reload the crates in the pickup truck box, then await the cooled meat from the abattoir.  I load the cold, eviscerated meat in the insulated cooler box, throw a temperature recorder in with the chicken so that I can prove I kept the chicken at the proper temperatures, throw on the ice to keep the chicken cool for twice the expected travel time (in case of a flat tire or other travel emergency), close up the cooler box, and head home.  A long, hard day!  If you have other animals on farm, you still have to do farm chores before you go, and after you get back.  Think about that and get the help you need.  Don't plan on being Superman.
17. I haven't figured out how to get 500 customers to rendezvous with my trailer full of cold fresh never frozen meat when I return home.  I sell some of it fresh, but am forced to freeze most of it.  Freezing isn't as simple as throwing 300 chickens into a standard home chest freezer.  The typical chest freezer has a limited freezing capacity, and will take up to 2 weeks to freeze the chickens in the middle of the freezer if you load it full of cold chicken.  The chicken in the middle of the freezer will be cold but spoiled (ie. rotten smellly meat unfit for human consumption) by the time it starts to freeze.  To solve this problem, I tightly pack about 30 chickens into the bottom of a large chest freezer.  I then spread 25 kg. of dry ice (-90 deg C) on top of those chickens, then place another layer of 30 or so chickens on top of the dry ice layer.  I continue to add layers of chicken and dry ice until the freezer is full.  I close the lid, and the cold CO2 gas comes blowing out of the freezer as the chickens are rapidly frozen (you need adequate ventilation of the CO2 gas escaping).  Within 12 to 24 hours, the 300 chickens are frozen solid, and the chest freezer's compressor can take over the job to keep the frozen chicken at -18 deg C.  Dry ice is expensive, so I charge 16.9% more for frozen chickens vs. fresh never frozen chickens to help pay for the dry ice.
18. Growing your chickens is probably the easy part.  The hard part will be marketing.  You will have long days at Farmer's Markets, and costs for advertising and marketing.  Be sure to keep those $/hr labor and marketing costs allowances in your planned selling prices.
19. Artisanal chicken can sell at a premium price over the crap CAFO chicken that is sold in the grocery store.  I raise grass pastured, free range, no drug, no antibiotic, no chemicals, no hormone, all natural chicken and sell it at $3.85 per pound fresh never frozen, and $4.50 per lb frozen.  I make more profit when the birds are heavy (eg. 7 lb chickens at $31.50 per bird), but most consumers get sticker shock when the birds are too heavy.  You may find it an easier sell at 4 lb birds at $18 per bird.
20. I will be applying to do Artisanal Chickens for 2017.
21. There will be some people who need the high quality Artisanal Chickens, but can't afford them.  Please consider:
    
    
    •  A discount price to sell some of your chickens to your local Foodbank; or
       
    • Donating some of your chickens to your local Foodbank; or
       

    

    My insulated wood box, 4' x 8' x 4', disassembled, awaiting
    my next trip to the abattoir.  One person can pick up each
    piece, and assemble the box.  Add eviscerated chicken and
    ice, and off you go.  The box is re-assembled with about
    20 screws and a 25' long cargo web strapping around the
    middle.

    • Donate a part of your gross sales or profits to the Foodbank so that those who can afford your chickens help subsidize affordable food for those who can't.

I hope this helps you decide if CFO's Artisanal Chicken is for you.  Please add your comments and experiences, tips, and questions to the Comments section below.

Comparative Advantage Of Production

Chicken Farmers of Canada ("CFC") is supposed to be allocating additional quota based on a provinces "comparative advantage of production".  How well did CFC do on this responsibility.

Yesterday's Blog posting used Lloydminster, a city on the provincial border between Alberta and Saskatchewan, to examine the impoact of CFC's MOU for the Chicken Wars (see Chicken For Lloydminster.

As mentioned there, Canada's Farm Products Agencies Act requires CFC to consider "comparative advantage of production" to assign additional quota.

What exactly is "comparative advantage of production"?

You can read more about it here, here, and here.

I'm not sure who was advising CFC when they came up with their bastardized lists of factors for the assignment of chicken quota according to their MOU, but they certainly have little to do with "comparative advantage" as I understand the terms.

If I am wrong, let CFC disclose overwhelming evidence that the 7 factors they have chosen:

• Provincial shares of national base allocation,
• Population growth;
• Income - based Gross Domestic Product (GDP) growth;
• Consumer Price Index,
• Farm Input Price Index,
• Quota utilization; and
• Further processing and supply share.

as CFC has done in Section 1.(1.1).(A) of their Memorandum of Understanding are indeed factors for "comparative advantage of production".

If CFC is unwilling or unable to convince me and all other Canadians, then CFC needs to fix its mistake.

Why would CFC do such a crazy thing?

Because CFC realized their government masters were getting impatient with CFC about the chronic squabbling, and Alberta finally leaving the Federal-Provincial Agreement Chicken 2001.  That dirty laundry in public was an embarrassment, and had to be eliminated pronto.

CFC let the kids decide that candy would be served as the main course at all meals, they could watch TV all day, and could go to bed whenever they felt like it.  What kid wouldn't agree to accept negotiated terms like that?  CFC abdicated and capitulated to everybody's wanton depravity so as to get a quick deal.

In doing this deal, CFC has kicked Canada's Supply Management System out of orbit, and on a course heading into deep outer space.  Soon, we will be into uncharted space.

All of this has untold risks to Canadian chicken consumers.

Because Supply Management is a private world unto itself, only those who are "directly" affected by CFC's nonsense can complain.  All others must sit still, speak only when spoken to, and mind our own business.  CFC gets to destroy everybody but we, the public, must grin and bear the slow torture inflicted by CFC.

Thanks CFC!

Chicken for Lloydminster

Lloydminster straddles the border between the two Canadian Provinces Alberta and Saskatchewan.  Where should the people and grocery stores of Lloydminster buy their chicken from, Alberta or Saskatchewan?

Lloydminster (red square above) is located smack dab
on the provincial border between Alberta (AB) and
Saskatchewan (SK), two Western Provinces of Canada
(overall map of Canada in bottom left corner).  Map
derived from Wikipedia

Lloydminster has been incorporated by both provinces as one city.  Lloydminster is not a twin city that happens to have the same name in both provinces. Lloydminster is one city, with half the city in Alberta, the other half in Saskatchewan.  Lloydminster is unique.

I believe Lloydminster can held end Canada's Chicken War.

Inter-Provincial Trade

In the Canadian Constitution, right from the start of Canada back in 1867, inter-provincial trade is guaranteed to be free and fair.

More recently, Canada and all the Provinces have signed an Agreement on Internal Trade which minimizes or eliminates barriers to internal trade between Canadian provinces.

Therefore, the good people of Lloydminster should be able to decide if they want to shop in either Alberta or Saskatchewan, then return home with their groceries and other purchases. The same goes for any grocery stores in Lloydminster, or elsewhere in Canada.  Everybody has the right to have suppliers and/or customers from any province.

Canadian constitutional law experts say,

“The flow of interprovincial trade, as a legislative subject matter, is within Parliament's jurisdiction over the regulation of trade and commerce pursuant to section 91(2) of the Constitution Act, 1867.  As a result, provincial legislatures cannot pass laws prohibiting extra-provincial transactions. However, pursuant to sections 92(13) and 92(16) of the Constitution Act, 1867, provincial legislatures may pass laws respecting local trade."

That constitutional expert also speaks about "disproportionate impact" where a provincial law on a matter of provincial jurisdiction has a secondary effect that purposefully or inadvertently impedes the flow of inter-provincial trade which are not necessary to implement the objectives of provincial legislation.  In that case, those superfluous clauses in the provincial law would be repugnant to the Federal jurisdiction of inter-provincial trade under Section 91(2) of the Constitution Act, and would therefore be unconstitutional.

With free trade between provinces, you'd think that the quality and price would be the same and similar in all provinces of Canada  for commodity goods such as chicken, as chicken is grown in every province and is easily transported.  Let's check that assumption.

Using Agriculture & Agri-Foods Canada's Table 31N data for 2014 on Weighted Average Retail Poultry And Table Egg Prices Report we see that chicken prices between Alberta and Saskatchewan vary from a ratio of 0.66 (Alberta 34% cheaper) to 1.85 (Saskatchewan 85% cheaper), with an average price ratio of 1.02 (Saskatchewan 2% cheaper) and a median price ratio of 0.99 (Alberta 1% cheaper).

Fresh Whole Chicken Retail Price Ratio between Alberta and Saskatchewan for 2014

There are some very significant price swings (for unknown reasons) on a month-to-month basis between Alberta and Saskatchewan, as much as 85% for the various types of chicken (eg. whole, fresh, frozen, wings, legs, breast, thighs, etc.) in the same month. These swings indicate to me that there were competitive forces at work during 2014 somewhere in the value added chain (eg. at either farm, processors, wholesale, or retail).  If the price ratio between AB and SK was constant each and every month, price fixing would be the obvious cause.  I assume that independent grocery stores in Lloydminster who care about their customers (and their own profits) will call two different wholesale suppliers, one on each side of the border, then buy from the cheapest.  Consumers likely do the same, as it's just across Meridian Street in downtown Lloydminster to get cheaper chicken; perhaps as much as 85% cheaper.

Provincial Goals

Each of the provinces of Canada seem to feel that their province should be self-sufficient for chicken.  In other words, if it is eaten in-Province, it's grown in-Province.  I can understand and support that goal, but the key is how they go about accomplishing that goal.

That is why there has been a huge squabble between everybody at the board table of Chicken Farmers of Canada ("CFC") as they set the provincial quota allocations for all of Canada.  Alberta dropped out of the Federal-Provincial Agreement Chicken, 2001, and then agreed to re-join when they were finally offered a better deal. After years of argument, a tentative solution was found.  On Nov. 20, 2014 CFC announced a truce was reached with all parties on the new chicken allocation agreement (ie. the Memorandum Of Understanding, "MOU").  Both Alberta and Ontario would be given a greater share of the chicken production allocation to feed their growing population.

This week we learn that while CFC's MOU deal was tentatively accepted by the provincial representatives at the CFC Board table, the chicken processors in British Columbia, Saskatchewan and Manitoba have all filed appeals with their provincial governments over the new national chicken allocation policy.

Personally, I'm surprised that Quebec and the East Coast didn't complain too.

Where does all this leave Lloydminster, otherwise than on the border between Alberta and Saskatchewan?

If the Chicken Mafia from outside a province are prohibited  from serving customers within that neighbouring province, then the residents and processors within each province are trapped victims, at the mercy of their local branch of the Chicken Mafia.  Sound familiar?

Section 23.(2) of the Federal Farm Products Agencies Act ("FPAA") says:

 "In allocating additional quotas for anticipated growth of market demand, an agency shall consider the principle of comparative advantage of production."

What that means to me is that CFC should be allocating additional chicken quota to the most efficient producer of that chicken, which should provide the lowest cost chicken that meets the quality standard required.

Lloydminster's Chicken Divide

Let's assume that on one side of Meridian St. in Lloydminster, the chicken producers and processors rest on their laurels, chicken productivity drops, and retail prices climb.  On the opposite side of Meridian St., they are the most industrious of all chicken producers and processors, continuously improving, and doing their very best for their retail customers, causing retail chicken prices to drop continuously, month after month.  Soon there is a drastic Chicken Divide in Lloydminster, with huge retail price differences for chicken, depending if you are on the East side or the West side of Meridian St. in Lloydminster.

According to the FPAA, CFC should give any additional quota allocation to the more efficient side of Lloydminster, so that the people do not suffer, but can benefit from the innovative and effective chicken supplies from the better side.  This also reward the most effective of the Chicken Mafia, encouraging them to continue on the same path, and for others to follow in their footsteps.

What do you think the smart people of Lloydminster will do if instead of more chicken made available from the cheapest & best supplier, CFC came up with some weird and dysfunctional MOU formula for allocation of additional chicken quota based on:

• Provincial shares of national base allocation,
• Population growth;
• Income - based Gross Domestic Product (GDP) growth;
• Consumer Price Index,
• Farm Input Price Index,
• Quota utilization; and
• Further processing and supply share.

as CFC has done in Section 1.(1.1).(A) of their Memorandum of Understanding?

The social activist people of Lloydminster are smart people who care about their chicken.  I believe Lloydminster consumers will get in their cars and drive to the better side of Meridian St., and buy all of their chicken there.  Neighbours will help buy for each other, crossing Meridian St. so as to save the cost of Chicken Commuter traffic.  Chicken processors in Lloydminster will call up the farmers on the good side of Meridian St., and order their next truckload of chicken from the good side.

Would anybody do otherwise?

Lloydminster is a special place, easy to use as an example to help guide CFC, and the Federal and Provincial Governments to finally understand.  However, every other city and village within Canada is no different, as all of us want what Lloydminster has:  CHOICE.

If all those sitting at CFC's Board Table can work together to develop an MOU that works for Lloydminster, I suggest it will work for the rest of Canada.

Perhaps CFC can quickly construct a live game scenario (ie. like playing Monopoly) with three chicken farmers, three chicken processors, and three consumers on each side of Lloydminster's Meridian St..  The dice can be rolled 7 times at the beginning of each round to simulate each of the 7 MOU variables for that round.  Farmers and producers can set their prices.  Producers can then decide who they will buy from, and how much chicken they will buy.  Then the consumers can decide who they will buy from.  Each player sets their strategy and take turns responding to what all other players did in their previous turn in the previous round.  After 3 to 30 rounds, it should be obvious to all those present if CFC's current MOU has any hope of working.  Then CFC can help them draft the "Lloydminster Chicken MOU", something that will really work.

Will the Chicken Mafia listen & learn, or will they continue making one disastrous mistake after another,  driving a wedge deeply between the warring chicken factions, and a stake through the heart of chicken consumers.

When will they learn that people want safe, nutritious, affordable chicken?

People do not want a bunch of gamesmanship on how to become chicken millionaires.

Small Flock Petition

Ontario has an important decision to make about the additional chicken quota that has been awarded to Ontario by Chicken Farmers of Canada ("CFC").

Previously, there was some confusion about who said what and the position adopted by various stakeholders.  SFPFC is independent of all other organizations, but will work co-operatively with all individuals and organizations who share 1 or more of our principles.  That confusion appears to be fully cleared up by this Blog posting, as well as here and here.  We await the eventual correction of other media reports that make contradictory statements.

We have previously discussed the recent opportunity for chicken quota, and the gathering stakeholders of diverse viewpoints (see prior Blog postings here, here, here, here, and here)

The extra quota could be gifted, leased, or sold to the millionaire chicken producers, primarily located in Southern Ontario.  It is suggested this option will minimize the economic spin-off effects, and continue the under-servicing, abandonment, or poor servicing of the specialty chicken markets.

Petition for Affordable, Nutritious, Locally Produced Chicken for Ontario

You can sign the petition on-line here

Alternatively, the extra chicken quota can be earmarked for Small Flockers located throughout Ontario.  Small Flockers currently serve, and will likely better serve the diverse needs for specialty chicken, such as:

• antibiotic-free,
• diversified farm,
• drug-free,
• enhanced animal welfare,
• free range,
• full disclosure,
• full traceability,
• growth promotant free,
• Halal,
• heirloom breeds,
• high sustainability,
• integrated farm,
• Kosher,
• locally produced,
• low carbon impact,
• low environmental impact,
• low fossil fuel use,
• low Greenhouse Gas impact, and
• naturally raised,
• organic,
• pastured,
• slow-grow,
• small farm,
• Other specialty chickens and processes

We welcome all individuals and organizations to come join with Small Flockers.  To facilitate this, we have drafted a petition to summarize the issues and our prayers to the Federal and Provincial governments to set Small Flockers free, and thereby maximize the benefits for Ontario and the rest of Canada.

Lies and more Lies. Will SM ever tell the truth?

Dave Janzen, Chairperson of Chicken Farmers of Canada ("CFC"), did an Op-Ed piece in the Ottawa Citizen on July 8, 2014.  It appears he was prompted by an opinion piece by Kate Heartfield of the Ottawa Citizen.

I have carefully read Kate's Op-Ed essay.  I agree with everything she said.

However, Mr. Janzen's response is: "Don't chicken out on Supply Management".  It seems he's afraid that both Kate's Op-Ed and the recent trade talks (TPP, EU, and others) are significant threats to the millionaire chicken farmers of Canada and their cozy feather bed called Supply Management ("SM").  Those threats prompted his Op-Ed response.

Maybe he's right about being under attack on two separate fronts, a dangerous position to be in.

Let's review what he said in defense of SM.

Mr. Janzen said "As a Canadian chicken farmer, I can assure her [Kate Heartfield] that supply management is alive and well and, frankly, should stay that way."

I agree that SM is alive, but is it "well"?  I have documented issue after issue of brain dead flatlining by CFC and its provincial counterparts, and the terrible toll inflicted on consumers and Small Flock chicken farmers.  It appears obvious that SM isn't well, it's dysfunctional.  Yet the millionaire chicken farmers continue to deny, avoid, and resist.  So sad.

Mr. Janzen said, "Supply management contributes more than $25 billion to Canada’s GDP every year, directly supporting more than 300,000 jobs, while ensuring robust growth for our fellow farmers in the livestock, oilseed and grain sectors."

I won't argue his statistics, but I do take exception to the invalid assumptions behind those statistics.  SM is big, on that we agree.  However, SM strangles the chicken industry in Canada by killing off any hope of significant chicken exports.  If SM didn't exist tomorrow, the Canadian chicken market would increase significantly.  Secondly, if SM didn't exist, or it let the non-SM system some freedom, those jobs and GDP would still continue, as Canadians would still want to buy and eat chicken.  So how does Janzen take credit for jobs and GDP that will exist whether or not SM exists?  That is a classic fallacious argument.

Janzen said, "For more than 40 years, this system has ensured the success of our country’s dairy and poultry industries by setting optimal production levels and ensuring fair returns for farmers."

It is almost 50 years that Canadian consumers have been chained to the wall in the SM dungeon.  When do we get paroled?  Murderers have shorter sentences than what we have to suffer.  It's been so long, it more than meets the definition of cruel and unusual punishment.

Janzen says they set "optimal production levels".  Check on CAMI Poultry in Burlington ON who can't get sufficient supply of chicken to meet the consumer's need for Hong Kong style chicken (see here, here, here, and here).  Have you tried buying pastured poultry?  Not available, except from a small flock farmer in the most part, but SM severely restrict small flockers from adequately serving this market.  SM doesn't want that pastured poultry market, but they won't let anybody else have it either.  That's greed and spite, through and through.

Janzen says "fair returns for farmers", but I have shown that his millionaire chicken farmer members got that way by gouging Canadians with bogus FCR charges for 10 years (see here), and premium profits, 21% higher than any other farmers in Canada, whether it's SM or non-SM (see here)

For 20 years, chicken prices have increased at 3.54%/yr,
regular as clockwork.  Does Mr. Janzen expect us to believe
that thousands of retailers from coast to coast are in a giant
conspiracy to regularly raise chicken prices as seen here?

Janzen said, "we do not set the price consumers pay at the stores – retailers do."  If it isn't SM millionaires who directly control retail chicken pricing, then it is being done by their friends or accomplices with their help and protection.  See the graph of retail chicken prices for the last 17 years (the data for 2012 - 2014 is similar, continuing the trend).  Just how dumb does Janzen think we are?  Pure propaganda!

Janzen says Canada's Federal government "fights for market access where Canadian products are in demand, while sustaining excellence at home for products that Canadians depend upon every day — including those provided under supply management."

Yes, it's a fight, because Canada's SM system puts us way out in left field compared to our trading partners.  Canada is the 2nd worst (only behind Japan, see here) for agricultural tariff barriers (as high as 285% to import chicken into Canada), and domestic subsidies for the government's friends in SM,. All of our trading partners are very upset with Canada on a chronic basis about Canada's crazy trade policies under SM.

Janzen claims "excellence".  Later on in his Op-Ed piece, Janzen states:

"Supply management assures Canadians that they can get a reliable supply of fresh, high-quality food at a reasonable price."
 
That's a joke!  Canadian chicken is mediocre at best, and getting worse all the time.  Our Canadian chicken is often contaminated with deadly bacteria and/or Superbugs (see here ).  Our Canadian chicken productivity (as measured by FCR Feed Conversion Ratio, the biggest single factor in determining chicken prices) is 25% worse than comparable chicken grown in New Zealand (see here ), and Canadians pay 50% to 300% more for our chicken than most others in the world.  Nothing but crappy lies by Janzen to fool the public.

I hereby challenge Janzen to a public debate of his spurious propaganda against the objective facts and true statistics; whenever and wherever.  Is there any national media channel willing to cover and air the debate?   I doubt he's foolish enough to accept the challenge.

Janzen said, "we are the world’s 15th largest importer of chicken. Indeed, we import more chicken than six of the TPP members — the United States, Peru, New Zealand, Australia, Brunei and Malaysia – combined! Year in and year out we are consistently the second- or third-most important market for US chicken exports."

Canada has the 6th largest economy in the world, but we're the 15th largest in chicken imports.  What does that tell you?  It's hard to get chicken imported into Canada.  Canada imports about 25% of our chicken from other countries, all done so it maximizes profits for the SM chicken farmers and their close friends.  Most of the chicken we import comes from USA, Peru, New Zealand, Australia, etc.  We import it because those countries don't have a crazy SM system that prevents them from exporting chicken.  Canada has a crazy SM system, so we hardly export any chicken to other countries (ie. we're in last place of the OECD nations, with just 1.4% market share for chicken exports, see here).  The countries Janzen lists generally don't import chicken because their domestic chicken farmers supply close to 100% of the domestic market, plus produce more chicken for lucrative exports.  Again, twisting the facts to make SM look better than it really is.  Lipstick on a pig.

Janzen said, "New Zealand is often cited as the poster child for free trade. But it does not allow a single chicken to be imported thanks to strategically designed non-tariff barriers — in this case, excessively restrictive, so-called “sanitary” rules." 

Perhaps Canada should learn from New Zealand.  Today, more than half of BC is under quarantine from a H5N2 bird flu outbreak that keeps spreading more and more.  The Federal government paid hundreds of thousands of dollars to SM chicken farmers so they could develop and implement bio-security systems to prevent these types of issues.  CFC blames wild ducks as carriers who infected the BC poultry farms.  However, the bio-security rules are supposed to ensure that domestic poultry are separated and protected from contact with wild birds.  Annual audits are supposed to be done on every poultry farm to ensure compliance on this issue.  How does CFC explain this outbreak of today, especially after it duplicates the last outbreak in BC in 2004, an outbreak of highly pathogenic avian influenza H7N3 that affected about 1.3 million farm poultry birds; an unmitigated disaster.  New Zealand has worked hard to have no poultry diseases, unlike Canada.  That's typical of SM and Janzen to smear New Zealand's excellence as a negative event.

Janzen said, "Every country does what it can to keep its agriculture sectors viable. In most cases, that support comes in the form of massive government subsidies to farmers. Not so in supply management."

As mentioned previously, Canada is the 2nd worst for agricultural subsidies (Japan is the worst, US has significantly lower subsidies than Canada).  CFC and its SM cronies frequently claim they are 100% self-funded and no funding from the government, which he repeats here as well when Janzen said,

 "In Canada, farmers under supply management do not get a dime of subsidies.

As mentioned previously, Canada's SM chicken farmers received a government grant to develop and implement their bio-security system, and CFO received a huge grant from taxpayers' pockets so they could buy German software to help run their office ( see here).

So much for Janzen's SM fairy tales.  You can believe the truth of Janzen's propaganda, take your pick.

Canadian Chicken Prices: Fair is Fair

Chicken Farmers of Canada ("CFC") protests Barrie McKenna's article published in the Globe & Mail by submitting a Letter To the Editor.


Agri007 takes CFC to task for CFC's wacky, indefensible statements.  So shall I.

The article protested against appears to have been originally filed by Globe & Mail as "It’s time to ensure Canada’s food pricing formulas are transparent, fair" on Nov. 23, 2014 then re-filed under a different title Nothing to crow about: Why Canada's chicken pricing is unfair on Nov. 24, 2014.  This Blog had already discussed the Nov. 23rd version in "Smoke & Mirrors for Chicken Pricing & Provincial Allocations".

Now we shall discuss CFC's idiotic response.


So what great rhetorical arguments and objective evidence does CFC present so as to blow the Globe & Mail and its veteran reporter out of the water?

Not much.

CFC, through its paid shill Mr. Mike Dungate, Executive Director of CFC, states:

"Just look at the Consumer Price Index: In the past year, beef rose by 19.4 per cent, pork rose by 14.4 per cent and chicken rose by only 2.7 per cent. In the past two years, beef prices rose by 23.1 per cent, pork rose by 18.1 per cent, and chicken? Well, again, it only rose by 5.1 per cent. Chicken is consistently the best value in the meat counter."

 When we determine "best value in the meat counter", I suggest we need to look at the following:

1. The quality of the meat offered (eg. bacterial contamination, age, toughness, taste, organic, free range, grass fed, supplier, brand name, etc.)
2. The absolute prices, such as $/kg
3. The rate of increases in the absolute prices, such as %/yr increase
4. The justifiable price, based on relative or comparable pricing available elsewhere, or for substitute products

 It is agreed that chicken price increases have been significantly less than beef or pork.  I have already reported on this issue in our Blog posting Meat Price Mania.  If fact, I complemented the #ChickenMafia on not following the example of excessive price increases implemented for all the other meats tracked by Statistics Canada (eg. beef, pork, canned salmon, weiners, bacon, etc.).

Figure 1 (from Chicken Price Parity: Will it ever come?)

The #ChickenMafia has implemented a policy to steadily increase prices of retail chicken at 3.54%/yr (Jan. 1995 - Dec. 2012), which has recently been increased to 3.79%/yr (Sept. 2010 - Sept. 2014).  This is the "boiled frog" technique, which is insidious, stealthy, and highly effective for the sleepy consumer.  Of course, this can only be accomplished by an illegal cartel via price fixing, or Canada's Supply Management rules that exempt the #ChickenMafia from charges of price fixing rule that all other commodities and corporations must obey.

Figure 2 Chicken affordability under Ontario's Minimum Wage has
declined by 31.7% from 1995 - 2005
(see Unaffordable Chicken In Ontario )

CFC fails to mention the end result when you increase prices by 3.54%/yr for 17 years and 3.79% for 4 years.  The end result after 21 years are chicken prices that have been inflated by 653.3%.  Mentioning that sad fact must have slipped their mind.  I have discussed how those who live off Ontario's Minimum Wage have seen the affordability of chicken decline by 31.7% over the 10 year period of 1995 to 2005 see Blog posting Unaffordable Chicken In Ontario.  That must have slipped by CFC's attention as well. 

Beef, pork and all the others operate in a somewhat competitive, efficient market, complete with price discovery via natural market shortages or excesses.  For example, if everybody is doing BBQ in the summer, and the stocks of hamburger, ribs, steaks, etc. are being quickly depleted, then the prices quickly rises.  Similarly, when the meat is reaching its "Best Before..." date, the prices get slashed 33%, then 50% so as to help ensure quick sale before the meat expires and it must be thrown out at a total loss.

CFC asserts, and Globe and Mail assumes, that #ChickenMafia only sets farm gate live chicken prices, and all other prices are set "naturally".

If that is the case, how does CFC explain the constant rate of increase in retail chicken prices over a 19 year period (or longer)?  If it isn't CFC who tweaks the retail price dial, then exactly who is it?

After 3 years of investigating this mysterious control mechanism, I have no proof, I have no rumor.  It is all a secret blackbox system hidden from view.  If anybody wants to hint or disclose, post a comments, anonymours or otherwise, or send me an email.

However, the Federal and Provincial governments have given sweeping powers to Supply Management.  Under the various pieces of legislation, regulation, and MOU's (Memorandums of Understanding), Supply Management is responsible for and has the duty, powers, and authority to control sales, marketing, shipping, storage, distribution, and pricing of their respective commodities, as well as all processed products that are made, in whole or part, from their commodities (eg. frozen chicken fingers in a cardboard box, chicken TV dinners, etc.).

For CFC to insist that they only control farm gate live chicken prices is disingenuous and misleading.

If CFC chooses to not exercize its powers for whatever reason, they cannot turn around and say they are not responsible for the resulting chaos when they fail to monitor, command, or control as they should.  To be responsible and then fail to act is either incompetence, or negligence, or corruption.

Next, CFC states:

 "live price of chicken has declined 1.6 per cent and over the past two years it is down a huge 9.9 per cent."

 We agree, but CFC fails to mention why.

Ontario Farm Products Marketing Commission ("OFPMC") ordered Chicken Farmers of Ontario ("CFO") to reduce their Feed Conversion Ratio ("FCR") by 16.3% (see Blog Posting It's Alive!).  Through false and fraudulent FCR's, CFO collected windfall, unearned, and fraudulently gouged income from Ontario consumers for up to 10 years for an aggregate total ill gotten gain of about $10 Billion.

When OFPMC ordered a proper FCR, I predicted farm gate prices should drop by 9.78% in Aug. 21, 2013.  CFC now claims prices actually dropped by 9.9%.  Funny coincidence, 9.7% vs. 9.9%, seem pretty close to me.

I agree, and believe CFC will agree too, that Ontario chicken prices tend to set the standard throughout Canada.  When Ontario chicken prices move up or down, the prices throughout Canada tend to follow Ontario's lead.  That is why when CFO was ordered to lower Ontario prices, the rest of Canada soon followed, and Statistics Canada reports a 9.9% drop as the Canadian average.

CFC then uses a unique equation.  Farm gate prices going down while retail prices go up is somehow equated to be objective, iron clad proof that farm gate prices received by the chicken farmers is fair.  What?  Back up a little.  I missed the logic.  Go slower and explain each step in complete detail.  Where did you get that logic from?  Obviously we have smoke & mirrors and slight of hand.  A logical non sequitur.

CFC claims that dismantling Supply Management will only threaten the small farmer with no benefits.

I, and others claim, that SM can be significantly changed, or totally dismantled in a careful manner so that damage or chaos are avoided or minimized, and unmitigated losses that do occur can be financially compensated.  If nothing can be changed because there is the slightest risk to 1 or more people on the planet, then this is reason enough to stop all change, whether the changes are good or bad.  Obviously, CFC cannot justify that extreme position.

Finally, CFC claims:

"The biggest determinant of consumer price is where and when you shop."

It is agreed that when and where someone shops for chicken can have a significant effect on the prices paid.  However, Statistics Canada data which I have quoted in the Blog postings referenced above, is Canada-wide, for big and small retail stores, in big and small cities.  The data trend is clear.  Somebody is controlling Canadian retail chicken prices for more than 19 years.  This "boiled frog" steady inflationary price increase for retail chicken explains 97.46% of all variation in retail chicken prices.  I would therefore suggest that when and where you shop is less than 2.6% of the overall price influence.

As usual, CFC is all wet.  It appears CFC wishes to spew out its false propaganda to protect their cushy, high paid jobs, and their multi-millionaire friends.

Smoke & Mirrors for Chicken Pricing & Provincial Allocations

Supply Management was ordered to develop a better formula for pricing of their essential food products (dairy, chicken, turkey, & eggs).  What we got was bureaucratic, impenetrable & confusing smoke and mirrors.

The old system for chicken was based on the farmer's price of buying chicks and chicken feed, plus a "reasonable" amount for the farmer's labor, overhead expenses, and capital costs.  Sounds reasonable, easy to understand, and possibly justifiable.

Unfortunately, the #ChickenMafia and their friends floated mirages and artificial prices for each of these pricing formula factors, putting in the fix to maximize the #ChickenMafia's profits.  This system of smoke and mirrors allowed the #ChickenMafia farmers to become the highest paid farmers in Canada, 21.1% higher than the median farmer's income (see Blog posting Tail Wagging The Dog ).

How did the #ChickenMafia distort a simple pricing formula to their weapon of choice for gouging the Canadian public?  Many family farms have been bought, merged and amalgamated into the fold of Big Ag. multi-national billionaire corporations.  Many other chicken farmers have become Big Ag's puppets.  Big Ag. and their feed mills own or influence the chick hatcheries, the chicken feed producers, the chicken farmers who grow the chicken to full size, the abattoirs who slaughter and process the chickens, and distribute them to the grocery stores.

That web of control and influence is called vertical integration.  That vertical integration creates a very powerful force, one that is hidden from public view, and beyond government control, supervision, or oversight.

Barrie McKenna at The Globe & Mail described the struggle over the ammeding this sneaky, stealth control of the chicken pricing formula by the #ChickenMafia.

On a related basis, Chicken Farmers of Canada are ammending their formula for which province gets to grow Canadian chicken.  Here is the guts of the new deal:

4.1 Subject to the other provisions in this MOU, if the national allocation for a period is set above base, the growth (over base portion) of the domestic allocation will be distributed using a differential growth formula that consists of the following eight components and component weighting:

A. Provincial share of the national base allocation – 45%
 B. Population growth – 7.5%
 C. Income - based Gross Domestic Product (GDP) growth – 7.5%
 D. Consumer Price Index (CPI) – 7.5%
 E. Farm Input Price Index (FIPI) – 10%
 F. Quota Utilization – 7.5%
 G. Further Processing – 10%
 H. Supply Share – 5%

These 8 factors all add up to 100% of the weighting.  At least they got that right, we now have proof positive they know how to add and do percentages.  The rest is in doubt.

Under the 2001 Federal-Provincial Agreement for Chicken, allocation of quota amongst provinces is supposed to be based on lowest cost producer.  This help ensures consumers get less expensive chicken, rather than subsidizing inefficient producers.

Will the new MOU ensure this occurs?  I doubt it.

The advantages of CFC's system is this MOU defines how all the provinces will jockey and fight amongst themselves.  At least that is a battle somewhat among equals.  Fortunately, the innocent and helpless consumers are proected from these vicious Supply Management Monsters when the MOU is implemented each quoota period.

Agri007 describes the MOU and its 8 factors, and doubts it will achieve something in the consumer's best interest.

The deck of cards is stacked against the consumer.  All the aces are secretly tucked up the sleeveof the #ChickenMafia.  The #ChickenMafia then makes a big media blitz and promotion that they are re-shuffling the deck of cards, and dealing a fresh hand to all players.  Some people might be fooled to enter their anty, trust the new dealer, and try one more time with eternal hope for a better tomorrow for Canadian consumers.

Unfortunately, no matter how many times or how well the deck is shuffled and cut, you need to realize that the aces are up the sleeve of the #ChickenMafia.  Those aces will be re-introduced to the game with great stealth at just the right time.

It's a rigged game.

The consumer has no chance to win.

End of story.