If this sounds unfair and crazy, why is it allowed to continue?

There is an ongoing crisis with the growing and selling of chicken under Canada’s Supply Management system.  The “#ChickenMafia” own, run, make the rules, and get all the benefits under this system.

All of the following facts are supported and/or explained more fully on Small Flocker's Blog http://canadiansmallflockers.blogspot.ca.

1.      Currently there are about 13,000 small flock poultry farmers in Ontario, and only 1,114 quota-owning chicken factory farms in Ontario (ie. part of Canada’s #ChickenMafia).  Therefore Small Flockers outnumber the #ChickenMafia quota boys by more than 10 to 1 in Ontario.  In spite of this Small Flocker majority, there is Chicken Apartheid in Canada, where the minority faction rules with an iron fist, exercising the minority's control over the rights of the majority, subjecting the Small Flockers to persecution, oppression, and tyranny.

2.      The #ChickenMafia has steadily boosted the retail price of chicken during the last 18 years, 3.54% per year, so that Canadian chicken is now 300% more expensive than the same product in the USA.

3.      The #ChickenMafia has unfairly inflated the price of chicken because they can, for they enjoy a government created monopoly with 99.97% market share.  There is neither competition, nor alternative sources, nor effective government oversight to keep the #ChickenMafia in check.

4.      In addition to monopolistic price gouging, the #ChickenMafia taxed Canadians even more through bogus FCR (Feed Conversion Ratios) charges, which unfairly gouged an additional $1 Billion per year from Canadian wallets for the last 10 years, for a total of $10 Billion in ill got gains.  In Aug. 2013, the Ontario government, after months of protest by SFPFC and others, ordered the Ontario #ChickenMafia to reduce their bogus FCR charges by more than 16%.

5.      Not only is there price gouging, there are significant food safety risks from the #ChickenMafia.  OMAF, CFIA, Univ. of Guelph, and others have consistently found that raw chicken sold in Ontario grocery stores is contaminated with salmonella, E.Coli, campylobacter, lysteria, and other deadly pathogens; between 30% to 80% of the time.  If that isn't bad enough, many of those pathogens are Super Bugs with significant antibiotic drug resistance, often due to the current or prior use of sub-therapeutic antibiotics by factory farms, even though many of these drugs are reserved only for humans.  All of this is contrary to Health Canada's recommendations and good veterinarian practice.

6.      For many decades, the #ChickenMafia purposefully added poisonous arsenic to the chicken feed because it caused metabolic changes in the chicken, and thereby produced 4% more profit for the #ChickenMafia.  Fortunately, this disease and cancer-causing arsenic addition was banned by Health Canada in Aug. 2012, but we have no evidence that the #ChickenMafia obeyed the Health Canada ban; as they won’t discuss it, nor will Health Canada.  Many of the #ChickenMafia continue to regularly feed antibiotics, caffeine, antihistamines, anti-depressants, and/or painkillers to most or all of the factory chickens they raise.  The #ChickenMafia now grow their birds in less than 6 weeks, twice as fast as historically done; so fast that many birds die, or are sick when they go to slaughter, then sold to you and your family.  Speed of growth degrades the chicken’s quality & nutritional value.

7.      While the #ChickenMafia consistently price gouge, endanger Canadians, and oppress Small Flockers, Health Canada reports that 7.6% of Canadian families can't afford the food they need to feed their families (in Nunavut, it's as high as 28%).

8.      My local Food Bank reports a 75% increase in usage during the last 3 years; which is a 20.51% per year increase.  This means that food bank usage has been doubling and re-doubling every 3.4 years.  Most Food Banks report more than a 40% increase in usage over the last 5 years.

9.      More and more, Canadians are being forced to unhealthy diets because they can no longer afford the food that they want and need.  Scientists estimate that 75% of disease is caused or contributed to by poor dietary nutrition; including obesity, diabetes, arthritis, high cholesterol, cardiovascular disease, liver diseases, cancer, Alzheimer's, etc.  No wonder there are multiple interlocking epidemics for these and other diseases in Canada.

How can the #ChickenMafia justify their gouging and unsafe practices under these conditions?  How can the government sit idly by while the #ChickenMafia takes advantage of their monopoly over Canadians?

If this isn't newsworthy for both Canadians and the news media, I don't know what is.

If any of the above facts concern, upset, or scare you, what should you do?  You can:

• Tell your family, friends, and co-workers about what you have learned.
  
• Ask your church or community groups to take a stand for sanity and social justice through chicken.
  
• Ask questions.
  
• Complain to your MP and MPP.
  
• Help Small Flockers in their fight for justice and sanity for themselves and all Canadians.

* * *

The above is available on a 2 page (front and back, 1 page duplex) pamphlet here.  Download, print off copies, and hand them out to family, friends, co-workers, neighbours, and enemies.

Chicken Feed Price Conspiracy

Since chicken feed represents about 60% of the total cost of producing chicken, I thought we might verify CFO's calculation of the chicken feed prices.

Comparison of CFO's Chicken feed prices vs. StatsCan data for chicken feed prices.  Data is
highly correlated, but slightly shifted in time periods (assumed due to reporting delays, or
dates of quota periods).

The graph above shows CFO's data (blue curve), and compares it with the data from Statistics Canada (red curve).  Notice the similar shapes to the curves, just shifted in time.

That time shift is to be expected, as the historical data takes time to collect before it can be used to adjust the live chicken selling price.  For example, CFO's Quota Period A-106 (August 14, 2011 – October 8, 2011) uses average feed prices from May 23, 2011 to July 11, 2011, the previous 3 month period.  Unfortunately since QP A-106, CFO no longer discloses this feed price averaging date range information.  CFO has chosen to be even more secretive about where and when it calculates this number from, so everybody is kept guessing.  Nothing like being open & accountable!

OK, so it is obvious that CFO gets the info from StatsCanada.  I found the data in Table 329-0059 of  StatsCanada data here  You can add the column of data called "Complete feeds, poultry".  But where does StatsCan get its data from?

StatsCan sends out a questionnaire, found here  They are supposed to report the sale prices in effect as of the 15th of the month.  The survey form kindly reminds the person that their data will be kept confidential by StatsCan, but they are not cautioned to answer truthfully.  I wonder why?  Under Section 31 of the Statistics Act they can be convicted and fined $500 and/or 3 months in jail if they provide false or mis-leading information.

According to Allltech's Annual Report Canada's 72 feed mills produced 0.96 million tonnes of broiler chicken feed in 2012.  There are about 38 feed mills in Ontario.  However, StatsCan data is for all of Canada.  What does the price of feed in BC or the Yukon have to do with growing chicken in Ontario?

Since StatsCan only asks for the price on the 15th of the month, what would happen to the data reported to StatsCan if just before the close of business on the 14th of the month, they implemented a price increase, effective immediately.  That higher price would be in effect for all day on the 15th, but on the 16th management changes its mind, and restores the original price.  The feed mill could "honestly" report the higher price on the 15th, StatsCan would dutifully report those higher prices, and CFO would copy down those higher prices, and 60% of that 1-day price increase would find its way into the higher price for live chicken.

If the feed mills add just $0.01 to the $/tonne price they report to StatsCan on the survey, multiplied by the 0.96  million tonnes per year they produce, and that is a total of $9,600.00 gained, less the cost of the $500 fine under Section 31 of the Statistics Act (catch them if you can), and you have a net profit of $9,100 per year for just putting down an extra penny on a survey form; not bad profit margin for a paper survey cheating.  Jack the bogus price even more on the survey, and your profits increase proportionally.

Does StatsCan know about this?  Are they regularly checking to ensure this, or something similar isn't going on?  Who will contact StatsCan to find out for sure?  Send them a link to this post and we'll see what they say.

But why would a feed mill do such a sneaky thing?  Because of vertical integration.  Many of the feed mills own broiler growing operations, or have guaranteed customers who must buy their feed from their mill.  Some mills have established magical linkages between themselves and those permitted to buy and sell of chicken quota to their "friends".  This is one sure way to boost the overall profits in the chicken monopoly.

But if the feed mills were playing these kind of games with feed prices, wouldn't the chicken farmers complain?  No, not at all.  In a previous post I showed how a chicken farmer gets all of his money back from any feed price increase, plus the farmer gets a 5.9% bonus of any feed price increase due to bogus FCR calculations.  So if the feed mills try to cheat the system, they share the spoils with the farmers.  Of course, all of this cheating, if this hypothetical situation actually occurs, is taken from the consumer's pocketbook.

Perhaps this is another reason why Canadians pay a 50% to 300% premium price for chicken, higher than most everybody else in the world.

StatsCan data on various animal feed price indices from 2002 to 2012.
All indices were defined equal to 100 in 2002.  Feeds used by Supply
Management animals (eg. dairy cows, chickens, turkeys) increased significantly
faster than feeds for non-SM animals.  Is this an attempt of feed mills to
ride the SM-coat tails for a higher pricing advantage?  

The graph here on the right is StatsCan data from the same table, shows the price increases charged at the feed mill producing the various feeds.  Dairy, poultry, dog, and cat foods were all indexed to be 100 by StatsCan definition in 2002.

Look who has the highest feed price increases:  poultry and dairy.  Dog & cat foot is up 20%, but dairy and poultry is up 60%.

Wait a minute, aren't poultry and dairy also the ones on Supply Management, where playing tricks in the shadows actually gets you higher profits, enabling the legal gouging of consumers.

In 2013, broiler chickens represent 4.89% and egg laying chickens are  4.07% of the total animal feed market in Canada, for a total of 8.96% for chickens.  Dairy is 50.91%, turkeys are 0.92%, so SM feeds are a total of 60.79% of Canadian animal feed consumption.  Do you see why the feed mills are interested in maximizing SM feed prices?

Of course, when you average in a normal, competitive market price increases for cat & dog food that consumers have a very watchful eye on, with the out-of-control sky high feed prices for the Supply Management Boys, you get the red curve, which is the overall average feed prices, in the middle between the two extremes.

So can we then calculate that poultry feed prices are 33.3% too high due to cheating in the system (ie. 1.6/1.2= 1.33)?  Taking 60% of that 1.33 premium (viz. feed is 60% of the total cost for raising chicken), we get a 19.98% premium in the live chicken prices at farm gate.  Add the bogus FCR multiplier of 5.9% and we get a total screwing of the consumer at the farm gate of 27% (1.059*1.1998= 1.27).  Since everybody downstream does a percentage markup on the chicken, the 27% premium at the farm gate gets marked up too, to become a 77% premium after the slaughter plant (40% markup for changing a live bird into an eviscerated chicken carcass).  Once it gets to retail, it has seen a second 40% markup (viz. cost of wholesale packaging, distribution, warehousing, shipping, refrigeration, and profit), the chicken feed price conspiracy has become an extra 249% premium unfairly gouged out of the consumer.

It appears I have explained 249% of the 300% or more of the price gouging that Canadians pay for their chicken; more than anybody else in the world.

The other 50% is from Supply Management encouraging and allowing all quota based chicken farmers to grow more and more fat, dumb, and happy to collect their CFO-induced quota cheque each Quota Period.  Note that New Zealand farmers have a FCR of 1.38 while CFO chicken producers are around 1.82 and this inefficiency raises live bird prices by 19.14% (see Blog posting Why not Export Canadian Chicken? ).  When that is marked up all the way through the system, we have a total consumer gouging of another 233.5%, for a grand total potential screwing of the consumer of 482.5%.

So you see, you should thank your lucky stars than most retail stores use chicken as a loss-leader and sell it to you for just a 300% gouging, rather than the full force of the 482.5% screwing that these mobsters think they want, and you deserve to be screwed out of.

Do you remember a few months ago when all the Too Big To Fail banks were caught cheating on the LIBOR bank rate, artificially jacking up this reference interest rate that $300 trillion in loans reference for their rates, defrauding the public by merely boosting the number they entered on the LIBOR survey they regularly filled out.  Just pretend that this LIBOR interest rate is 0.001% higher than it really is, fill out the survey, then everybody around the world multiplies the LIBOR by their share of the $300 trillion in debt that directly or indirectly reference LIBOR, and you gouge extra millions in interest out of the public, so the cheaters could earn extra profits and bonuses.  They just had to fill in the survey form and Presto! they gained millions in gouged fees.  If the "upstanding, honest, and faithful" banksters did the LIBOR scam for almost a decade, is it that crazy to suspect this same technique or similar jigging of the system by a handful of feed mill operators?

I'm sure all the above is just a co-incidence, don't you think?  I'm sure this is just one of those conspiracy theories cooked up by somebody who wears a tinfoil hat to protect them from UFO radiation and mind probes.

The picture kind of looks like me, but I don't remember the cat.

Tinfoil hats are ready for the Chicken Feed Price Conspiracy

$10.8 Billion of Fascist Chicken in Canada

Small Flockers have taken the position that the greater good of the public trumps the wishes of everybody else.  Where did we get such a crazy idea?

Under Section 95 of the Canadian Constitution Acts (1867 – 1982), Provincial Parliaments are empowered over agriculture, provided that their provincial acts and regulations are not repugnant to any Acts of Canada’s Parliament.  Both the Federal Government and the Provincial Governments are empowered to pass legislation on agriculture.

The Federal Government passed a number of laws and regulations to set up a Canada-wide Supply Management system back in the 1960's.  In 2001, the Feds finished negotiations to resolve the egg and chicken wars between Provinces, and an agreement was signed by all the parties, the 2001 Federal-Provincial Agreement for Chicken.

I'm sure that CFO must have heard about this agreement, because they were one of the signatories on the documents, as was the Government of Ontario.

Excerpt from 2001 Federal-Provincial Agreement on Chicken

In that agreement, it states that everybody will get along and play nicely together.  The recent skirmishes over chicken between Ontario and Quebec, and between Quebec and New Brunswick don't seem to meet that expectation, but that is another story for another day.

Under Section 1.01 of that agreement (see at right), all the parties are supposed to work is a Supply Management system that must have a number of very important characteristics. If we have something imposed upon us that doesn't meet these minimum requirements, then they aren't following the rules.  If they don't follow the rules, than we don't have to follow these made-up rules either, for what they ended up doing is ultra vires.  They have no legal basis for doing what they are currently doing.

Especially note Section 1.01 d) where we are required to have a system that works in the balanced interest of producers, industry stakeholders and consumers.  To me that means the decisions have to be equally good (or equally bad) for all three of these groups.

Is that what is occurring?  Raube Beureman just posted a comment on this website that Walmart USA chicken was $4.38/kg, while Walmart Canada offered the same chicken for $13.54/kg at the same time, in neighbouring cities.  That's 3.09 times more expensive in Canada for the same chicken.  Does that sound like "balanced interest"?

Where does all that money go?

CFO reports that in 2011 they produced 452 million kg. of live chicken at a price of $1.596/kg.  Typically the eviscerated weight is 73.72% of the live weight, so we got 333.236 million kg of eviscerated meat.  Add to that about 159 million kg of eviscerated chicken imported into Canada in a year, of which Ontario gets about 33%, so we have a grand total of 385.75 million kg per year of eviscerated chicken.  Now charge Canadians a premium price of $9.16/kg extra for that chicken (ie. $13.54 - 4.38= $9.16/kg).  That price premium for chicken that we are forced to pay sucks out $3.53 Billion per year from the Ontario pocketbook.

According to Ontario's Ministry of Finance in 2012 the total spending for the Ontario Ministry of Agriculture and Food will be $1.546 Billion (operating, assets, and capital expenditure).  So our premium chicken prices could pay for running the entire OMAF for a year, and put $1.98 Billion towards reducing the provincial deficit.

What about Canada-wide?  Chicken Farmers of Canada report in their 2012 Chicken Databook that 1.023 Billion kg of eviscerated chicken were produced in Canada during 2011 (latest stats available).  Adding the same imports of 159 Million kg stated above, we have a total of 1.182 Billion kg. of chicken.  At the price premium pricing over US chicken of $9.16/kg, that is a chicken tax of $10.827 Billion per year which consumers are forced to pay.  With 13.3 million households in Canada, that is a chicken tax of $814.00 per year per Canadian household.

I wonder who got those extra Billions.  What would consumers have spent their money on if they didn't have to pay those premium chicken prices?  If the government got the money instead, would they have reduced our taxes, paid down the deficit, or provided us $10.8 Billion of additional services?  If we are forced to pay an extra $10.8 Billion per year for premium prices on chicken, we can't spent it on something else.

We hear about Banana Republics where the dictator is smuggling plane loads of diamonds and gold out of the country, as the infrastructure crumbles and the people are starved.  Should we be placing observers at Toronto International Airport watching as our Canadian tyrants take $10.8 billion per year of hard-earned money away from Canadians and spirit it off to parts unknown?

Fascism is defined as when government and business are co-conspirators for their special interests by controlling and repressing the people.  Do we have a $10.8 Billion/yr. case of fascism here in Canada?

Chicken Price Parity: Will it Ever Come?

Canadians needs to be patient. Our chicken prices will be on par with US retail prices in just 22.7 more years.  Here is the price trend for Canadian chicken at Canadian retail stores.

You might wonder how I figured we only have to wait for one more generation before we have affordable chicken in Canada.

Here's the chicken pricing for good 'ol USA.

 Data Source: http://www.ers.usda.gov/data-products/meat-price-spreads.aspx

For more than 22 years, the US broiler chicken composite markup between wholesale and retail prices (ie. the green line in the above graph) has run at a steady 40.2% (ie. WholesalePrice/RetailPrice= 0.402). This 40.2% is the profit & expenses of wholesale distributors. Composite price is a weighted price based on relative fraction of weight sold for the various cuts or whole chicken.

Chicken prices in USA for both retail (red line) and wholesale (blue line) have been trending up at the same average inflation rate of 5.4% per year from 1990 to 2012.

On the Canadian side of the border, we get something totally different. Today, our Canadian average wholesale chicken prices in Canada are approximately twice the US wholesale price, and climbing.

Ouch!

 Source: http://www.cfo.on.ca/_pdfs/CFO-SM-Brochure-03.pdf

2014/10/06:   The above link was found broken.  CFO removed the incriminating evidence from their website.  Fortunately, I saved a copy which is still available here

The rate of wholesale price increase in Canada is approximately 2.6% per year vs. the 5.4% in the US. Canada.  With a higher chicken starting price but a lower chicken inflation rate in Canada,  this means the US prices will eventually match Canadian prices.

 If my math is correct, the US-Canada price gap will close around Feb. 8, 2035 (ie. 22.7 years from now).

Hold on, Canada, chicken price relief is coming. The day of chicken price parity with the USA will soon be here (in another 22.7 years).

The retail price increases for chicken seem out of control.  Below is the CFO's Chicken Consumer Price Index, showing rapid inflation of chicken at the retail grocery store (Ref: CFO-SM-Brochure-03.pdf, pg. 4)

Fortunately, Canadians are a very patient people. In the mean time (ie. the rest of my natural life), Canadians will have to do cross-border shopping if they want a good deal on chicken. Hopefully, the Canadian poor will be able to hitchhike to the US grocery stores and return with their affordable chicken.

Sooner or later, Canadians will have had their fill with price gouging on chicken.

 Source: http://www.georgemorris.org/uploads/userfiles/files/ccmr-july-2012.pdf

George Morris' data for May 2010 - May 2012 shows a steep collapse of chicken sales from Sept. 2011 to Mar. 2012, interpreted to mean that Canadian consumers were disgusted with excessive chicken prices, and closed their wallets. The sudden leap in sales for April 2012 was US chicken wings imported by retailers at excellent prices, so as to better serve Canadians.

This demonstrate that Canadians don't hold a grudge, as they are willing to quickly respond to reasonably priced chicken.