Shipping the Chickens

I've Blog posted on our draft plan for the removal of Supply Management from Canada.

That plan allows everybody to agree on the farm-gate price to be paid for chicken (or the other SM commodities of  eggs, chicks, turkeys, & milk).  However, there is a geographical separation between the producers and the processors.  Somehow, we have to arrange for the transportation between the two parties.

The truncated k-double auction can match up a specific producer with a specific processor, but based on the randomness of the auction process and the resulting bid-ask matching, that matching could cause unrealistic shipping of chicken everywhere across the province.  It is therefore best for the auction process to be supplemented by a least-cost shipping schedule.

How do we do that transportation, and who pays for it?  Obviously, it is better to minimize shipping costs (sorry truckers).

Ontario's Quota and Non-Quota Chicken Growers

 We have to optimally hook up all of the red dots above (chicken farmers), with all the red dots below (chicken processors):

Federally-inspected Meat Processing Plants

Plus the following Provincially-inspected meat processing plants:

Provincially inspected meat processing plants

Once a producer or processor are geographically located, it cannot be easily moved, yet things change.  Populations shift, vehicle fuel prices go up & down, producers & processors get into disputes that force them to deal with others than the geographically closest match, and so on.  If somebody decides to grow chicken in Thunder Bay, how do we (should we) be shipping those chickens to a processing plant in Toronto?

What about inter-provincial movements?

We have a few options:

1. We do separate auctions for each region.  This complicates the auction process greatly.  It may cause the balkanization of the provincial chicken market (ie. sub-division, non-cooperation, competition, abandonment).  Some auctions may get shunned by important producers or processors.  There may be large price differentials between the different auctions, putting one side at a significant competitive dis-advantage.  Popular auctions are over-loaded while unpopular auctions are under-serviced.
   
   
2. We leave those transportation details for each producer-processor pair to work out for themselves.  The auction sets the price for the chicken, transportation extra.  This might work most of the time, but it will probably be like musical chairs when the music stops; a mad scramble to grab the nearest chair, somebody gets hurt, or you've left standing and the nearest empty chair is at the far end of the room.  Not nice when you have to do this every quota period, and your life depends upon you making it there before somebody else.
   
   
3. We have FOB shipping hubs defined all across the Province.  The producer includes the cost of getting his product to the nearest FOB shipping hub in their auction bid, the processor pays to transport from their nearest FOB shipping hub to their factory and includes that price in their auction bid, then the bookkeeping cost of inter-hub transfers is pooled and shared equally by all.  I wouldn't want to be the one who decides how many and where these FOB shipping hubs will be located, for nobody will be happy with the decisions made.
   
   
4. The shipping costs are pooled for the entire province.
    
5. The shipping costs are pooled for each of the regions within the province.

Dijkstra's Algorithm is the standard algorithm that is used to find the shortest path between two points (eg. GPS mapping and driving directions).  When we have multiple sources and multiple destinations, it's a little more complex.  Good thing IBM has already solved that problem, way back in 1996.  They used a modified A* heuristic algorithm to estimate the Dijkstra optimum path in 30% less computational time. There is also the Floyd-Warshall Algorithm. Neither of these is exactly what we will need to solve the Multiple Pairs Shortest Path Algorithm ("MPSPA") that we will require for provincially-optimum chicken shipments, so some computer software development work will have to be done on this issue.

Once the auction results are defined, the winners' names & locations will be entered into this MPSPA shipping optimization software, and it will calculate the province-wide optimum pairing up of buyers & sellers; defining which supplier gets to ship to which processor.  Each of the parties are then notified of who bought & sold for each bid-ask pair.  If there are specific classes of chicken sold, then multiple runs of MPSPA, one for of the various classes of chicken, will have to be calculated.

While this gets us a province-wide optimum shipping schedule, the cost of shipment is still significant, as well as the scheduling of the catching crews.

Do we need to have all producers and all processors treated the same, no matter where they are located in the province, removing geography from the equation?

For example, let's say a producer is right next door to a chicken processing plant, and these two love each other, and have been supplier-customer forever.  Perhaps, for the good of the overall optimum on a provincial basis, it is better to break up these kindred spirits, and they will be required to buy and sell to somebody else who is a little farther away, and somewhat of a stranger.  This will cause some frustrations & higher costs for both of the original pair.  If we wish to get a provincial minimum cost, shouldn't the minimum cost be pooled across the province, so these two chicken lovebird don't personally pay more for the good of everybody in the province?

I therefore recommend that shipping costs be minimized on a provincial basis using MPSPA, then the shipping costs are pooled across all of the province, and added as a $/kg cost to all chicken transactions.  This makes all farms and all processors on an equal footing cost-wise, no matter where they are located in the province.

Ontario's Abattoirs

I created a Google fusion table and map, available here:   https://www.google.com/fusiontables/DataSource?docid=1xf2Da0uX2g7_-UFHlD6iZppX_oBShoFmKgL6Ue0

The above link takes you to a Google Fusion Table that I created from OMAFRA's website, mapping OMAF's data showing all Ontario licensed abattoirs.  Well done to OMAF for providing public access to these data in a form that can be readily analyzed.  Many thanks to Google for providing free use for the mapping of this public data.

Map of OMAF data for Ontario licensed abattoirs

After clicking on the above Google link, your browser window will show you OMAFRA's Excel spreadsheet data as I uploaded it into a Google Fusion Table.  Starting from the top left of your screen, the third line from the top, click:  Visualize --> Map and you get this:

There is another list of Federally inspected abattoirs in Ontario, but that data isn't easily available.  I have requested this data from CFIA, but it hasn't arrived yet.

It should be noted that some of these abattoirs do not do custom processing of poultry (ie. they only slaughter for themselves, and will not do poultry that belongs to other individuals).  That is the case for Burt's Farms abattoir on Manitoulin Island, where I happen to live.  In 2011-2012, OMAF helped to build a community abattoir in Providence Bay at a price somewhere near $2 million, but this abattoir decided not to process poultry.

Should OMAF require a comprehensive needs assessment be done before agreeing to fund community abattoirs? Did that occur in my case, and others?  If yes, why and I left stranded?

For me, the closest poultry abattoir that does custom processing for chicken farmers is in Sudbury, 300 km away (1-way distance).  I would have to drive there with my birds, and return will a cooler full of meat to sell at my farm gate.  Driving that distance would add about $3.00 per pound to the cost of my small farm chicken, doubling the retail price I'd have to charge.

It would appear that Southern Ontario is well covered with abattoirs, but there are many holes in Bracebridge/Bancroft/Haliburtin/Perth area, and even worse in Northern Ontario and the Hudson-James Bay area.

Does the Ontario government believe there is nobody living in these under-serviced areas, or that they are all vegetarians?

As far as I know, all of these abattoirs are privately owned and operated, so the government must act indirectly.

Could the government not help facilitate and encourage local farmers and/or citizens to find a solution that could work for them?  Need we rely on trucks, trains, and planes to bring food to the people from elsewhere?

Will OMAF help these under-serviced areas with portable abattoirs?

Will OMAF encourage and assist a reasonable solution for meat processing in remote communities without driving our provincial deficit into outer space?

Only time will tell.