The data for the chart shown above comes from the Alberta Chicken Producer's Annual Report for 2012. They provide some interesting data on the cost of buying chicken quota in the Wild Rose Country.
The price of chicken quota has been going up at a consistent rate of 29.5% per year for the last 4 years. That means quota prices double every 2.4 years.
Exponential growth is never sustainable. For example, the pressure wave created by a stick of dynamite exploding is an exponential increase; and we know how destructive that can be. It's no different here. It's only a matter of time.
More recently, as the Alberta economy has started to tank, the quota pricing has dropped from its peak. Is this the beginning of the end of Supply Management?
There are 235 quota holding chicken producers in Alberta. They get to produce 3.2 kg of chicken for each unit of quota they hold. As of Dec. 2012, chicken quota was $166.66 per Quota Unit. There is a total of 6.05 Million units of outstanding chicken quota, so that has a total capitalized value of $1 Billion.
I wonder why someone would pay that kind of money to be a chicken producer? It must be a very profitable business to attract that kind of entrance fee.
