I’ve been doing some light reading – specifically a legal transcript from an interview that is part of the whole egg industry lawsuit scene.  This interview of Scott Brookshaw, an L.H. Gray Vice-President, dated May 9, 2011, provided me with some interesting information.

In answer to a question, Mr. Brookshaw stated that in one week, 35 egg producers that ship eggs to L.H. Gray contacted him, concerned about the contents of a document that they had received, alleging that Gray had been intentionally manipulating the grading of eggs in their facility, resulting in alleged false grading summaries and therefore inaccuracies in the amount of levies paid, payments received and other financial reconciliation errors as a result of the alleged manipulations.   These 35 producers represent over 50% of Gray’s producers and many have been Gray’s producers for decades.  Based on my knowledge of the industry, I’d say that group of producers has some clout in the industry and could lead the charge for change.  So what I want to know is: What are these egg producers waiting on?   Is a telephone booth required to change from your feathered chicken costume to your Superman costume?

This controversial document has been sent to numerous regulatory and government agencies in Ontario and is part of the core evidence that is the foundation for the egg industry lawsuits.  Hundreds of thousands of dollars, if not more, have been spent on legal and other professional fees preparing this case thus far.  The document in question was compiled by the Whistleblower, Norman Bourdeau, a long-term former Gray employee/contractor.  There HAS to be SOME truth to this information.  There’s been way too much time, money, blood, sweat and tears invested in this journey for it all to be false.   And the longer that it goes on, the worse supply management looks allowing more damage to the industry – all because egg producers, who supposedly finance the entire egg industry are doing nothing.   Obviously the pocketbooks of egg producers are still full enough to allow them to do nothing.

The annual general meeting for EFO will be held soon.  Maybe the egg producers will get answers then.  But first somebody has to ASK!  And be prepared for the ‘management’ and lawyers to say that they can’t comment because it’s in the courts now.  That’s crap – but remember who let it get to that arena in the first place.  Offers were made long ago to make this whole situation go away – and were refused  by representatives of EFO.   More damaging information came out of the woodwork and that was something that EFO didn’t count on.  Cha-Ching! I think I hear dollar signs getting louder!  And that’s exactly what happened.

Questions about how much money EFO is spending on lawyers are definitely questions that can (and should) be answered. The ‘spending’ answers are not part of the court battle and can be answered at the meeting.  Don’t let the ‘management’ skirt the question.  Answers to legal questions are not the same as answers about spending producer’s levy dollars.  Producers can stop the spending – but you have to be prepared to demand that the spending be stopped.  Take charge of your own industry instead of letting lawyers, graders, consultants and bitter management run it.

Day to day banking fees include lovely items such as:

-        Withdrawal fees

-        Transaction fees

-        Cheque charges

-        ATM fees

-        Utility payment fees

-        Bank Draft fees

-        Certification fees

-        Cash handling fees

-        Wire Transfer fees

-        Debit Card Fees

-        Overdraft Fees

-        Closing Your Account Fee

And this is just scratching the surface!

On more than one occasion, I have discovered errors that my bank has made in the day-to-day operation of my bank account.  Most of these errors were minor but still needed correction.  My bank manager was surprised when I invoiced him with an ‘Error Fee’ when I reported the error to them and asked for a correction.  He didn’t seem to understand why I was entitled to collect a fee.  Was he kidding?  Regardless, I proceeded to tell him why I expected a payment for reporting the error and had the discussion in front of many of the staff and customers.  Maybe that explains why some of the bank staff go for a break when I enter their doors?  And this is the bank that is supposed to ‘greet’ customers when they arrive.  Am I paying a ‘greeting fee’ for that too?

My blog posting from yesterday (December 29/2011) has an error in it.  The letter regarding the proposed definition change for Ontario eggs was sent to graders, not producers.  At this point, I’m not sure if the letter went to all graders.  It would appear that only some of the graders received the notice.  Wonder how that works?  Regardless, I’m sorry for the error, but having the error pointed out begs even more questions.  What is the real role of EFO?  Does EFO staff work for the grading stations too?  Who pays EFO salaries?  Is it the graders or the producers?  What about the taxpayer-funded staff that are involved at Foodland Ontario?  How many people have to get paid to arrive at the definition of Ontario eggs?  Is that question like, ‘How many people does it take to screw in a light bulb?’

Based on my knowledge of the egg industry and after having reviewed the Foodland Ontario website, it would appear that there are eggs being marketed under the Foodland Ontario logo that don’t meet the current definition.  Can anyone say fraud?  So now that the current egg industry lawsuit has EFO and the graders front and centre, maybe it’s time for them to protect their back sides.  That would explain this sudden interest in the definition of ‘Ontario eggs’.  Wonder what the new Ontario Agriculture Minister has to say about all this?  I’ve got nothing but time – guess it’s letter-writing time.  Where’s my roll of stamps?

Looks like Egg Farmers of Ontario (EFO) think they’re Noah Webster, author of the Webster dictionary.  That’s right – they get to define the term ‘Ontario eggs’.  Seems rather self-explanatory to me but here’s the current definition:

‘Ontario eggs must be laid on egg farms in Ontario’

The EFO Director of Public Affairs is proposing the following new definition:

‘More than 90% of fresh shelled eggs must be sourced from Ontario egg farms.  Up to                         10% of fresh shelled eggs can be sourced from outside Ontario.’

Why is there a need for a new definition?  Though it’s not explained in the letter to Ontario egg producers (Surprise! Surprise!), could it have anything to do with the fact that changes in supply management are right around the corner?  Is someone reading between the lines as a result of Canada’s desire to participate in the Trans-Pacific Trade Talks?

Egg producers were notified of this proposal in a letter in early December.  Also included in this letter is a sentence telling egg producers where to send comments or feedback for this definition proposal.  I couldn’t believe my eyes!  I thought I was experiencing Aspartame overdose!  The management staff of EFO is actually ASKING the producers for feedback!  Wow!  Talk about a Christmas miracle!  Now the real question is whether the producers will actually ask questions about the need for a new definition and what it means for the industry.  Maybe it’s time to re-define EFO?

An Ontario egg producer shared the notice that is shown in the posting below.  (Letter from EFO – Is there More to Come?) What strikes me as different in this notice is that EFO does not see the current status of trade talks as ‘business as usual’.  In previous circumstances, EFO has merely told producers not to worry, write your MP and/or MPP and continue to produce eggs.  EFO didn’t do that this time.  They sent out the notice below which doesn’t really tell the WHOLE story.  I’ll follow up with that in future postings.  But what really got my attention is Mr. Pelissero’s obvious frustration/anger when he predicts what the federal government’s response to a potentially successful Pacific Rim trade agreement as “we tried our best, but in the best interest of the Canadian economy, we had no choice”.  Mr. Pelissero is a former politician.  One can only assume that he knows how these ‘things’ work so is he predicting the future?  Mr. Pelissero goes on and says that if this type of government response does occur, his response would be “CHICKEN MANURE!!!”  (As a side note, does Mr. Pelissero know all the agricultural benefits of chicken manure?  Does this mean that Mr. Pelissero thinks the talks are beneficial?)  Notice that Mr. Pelissero uses all capital letters, along with three exclamation marks – I did not add them.  He really must be frustrated – and scared maybe?  Is the writing on the wall?

I’ve read numerous recent articles about ‘getting rid of’ or ‘ending’ supply management.  That really doesn’t have to happen for Canada to be a part of the trade talks.  If market access increases and/or tariffs lowered, what will happen with quota values?  Will there still be a HUGE (note that I use all capitals because I do mean huge!) profit in the egg production business.  This huge profit is what makes the quota so valuable and thus so attractive.  Once the profit is reduced substantially, the value of quota will plummet.  Most likely the price of eggs will come down – all still with supply management in place – just with a new set of rules.  Rules that EFO hasn’t created.  I wonder how the EFO Board and management feel – having someone else in charge of their business?  I’m sure that egg producers are used to this feeling – as are Canadian consumers.  That’s just the way the EFO Board and management have been treating them for years.  Leaving them in the dark (without minutes and information) and making decisions anyway.  Since the Chair provided two sayings are true – here’s one that I think is true.  Hope I can remember it.  Karma’s a …….

Date:  November 24, 2011

To:  Ontario Egg and Pullet Farm Families

From:  Carolynne Griffith, Chair and Harry Pelissero, General Manager

Subject:  Commentary on recent media reports about supply management

Recently, Harry was asked by an egg farmer (who had emailed the Prime Minister) what all the media reports in the news will mean to the future of supply management.  The farmer wanted to know if they should buy more quota.  Below is Harry’s response to the question.

First, thank you for taking the time to email the Prime Minister.  If you have a Conservative MP, I suggest you send him/her a copy as well.  Second, the ramifications of any of the trade talks are twofold.

 First, increased market access.  Currently Canada, as a result of previous trade deals, has to allow in about 5% of Canadian demand through Global import permits.  If the system is unable to provide the product, then additional volume can come in through Supplemental Permits, currently running at about another 1-2% (by virtue of our EFP production Ontario has prevented another 3% of our market being filled by the imports).  So as part of any deal increased market access of another 3-5% would be sacrificed.  So there is the potential that between 10-12% of Canadian demand would be filled by imports.  This could result in a quota cut – removal of birds.

 Second, any trade deal could result in the lowering of our over quota tariffs.  An over quota tariff is applied when an importer wants to bring in product and does not have either a Global or Supplemental Permit.  Currently the over quota tariff is around 163%.  This means if the importer is able to obtain eggs for say $1.00 per dozen, then another $1.63 would have to be added to the price before they would be allowed to bring those eggs into Canada.  The $1.63 goes to the government not egg farmers.  On the table now in the WTO talks is a call for a reduction of at least 30% to the 163% figure.  In the past when the price has been low enough in the USA, then eggs were imported and the tariff paid and brought into Canada at a price lower than the Cost of Production (COP) for those same eggs if bought from a Canadian egg farmer.  Two things happen when this occurs, first the ability to price according to our COP would be threatened, second our ability to control production would be lost.  In both cases a quota cut will be required. 

 So you can see from the above that if either situation or both situations were to occur supply management as we know it would be threatened.  The government would not introduce an act to end supply management but all it has to do is sign a deal with increased market access and lower over quota tariffs as part of any deal.  The line would go something like this “we tried our best, but in the best interest of the Canadian economy we had no choice”.  To which my reply would be CHICKEN MANURE!!!  All countries have sectors within their economy they want to protect.  Supply management or our domestic food system is one that deserves protection.  Frank Pace former Chair of the International Egg Commission and the largest egg farmer in Australia put it best (they had supply management and lost it) – be sure to fight like hell to protect what you have because it gives the egg farmer the ability to set a price based on a cost of production verses (sic) taking what the retailers will give you for your eggs.  I could not agree more.

 I cannot or would not attempt to give you production/financial advice about what you should do on your own operation.  If you want to talk about it further please give me a call at 1-905-858-9790.  Again thanks for taking the time to email the PM.

 As your Chair, I will be travelling to Geneva for the next WTO Ministerial meeting on December 15-17.  Scott Graham EFO Vice Chair will be accompanying me on this trip.  Two sayings have always turned out to be true.  First, showing up is 90 percent of the success of any project.  Second, those who show up get to make the rules!  Egg Farmers of Ontario will always show up when supply management is discussed in a trade context.

Dear Santa,

My name is Carolynne and I want to tell you how much I believe in you.  I also want to tell you that I should definitely be on your ‘Nice’ list this year.  I have defended my friend, Harry and supported him even though it might have been smarter not to defend him, resulting in an improved egg producer’s position by not defending him.  Now there might be others who would put me on the ‘Naughty’ list this year.  Please don’t listen to them.  They’re the same folks that are telling the judges that I have been playing a little too much with two of my other friends, Bill and Joe.

I have a couple of questions for you too.  Can you spare some of the magic flying powder that you use on the reindeer?  I sure could use some so that I can fly away from the pending lawsuit that hovers over the EFO.  In the meantime, maybe I’ll simply announce that I won’t stand for election to next year’s Board of Directors.

Second, what do you do with the reject toys that the elves make?  I’m looking for a spot to get rid of a bunch of cracked eggs.  I’ve heard that my friend Bill gets rid of his cracked eggs by mixing them in with the Grade A eggs but some people seem to frown on that practice.  If you can’t suggest a better location, I’ll check with my friends at Farm Products Marketing Commission.  It may take them a year or two to answer my request, but I won’t give up.  I’m sure they won’t ignore me like they have other folks that have asked for their help and direction.

I’ll be sure to leave some eggnog out for you on Christmas Eve.  On second thought, I better come up with an alternative as the milk and eggs in eggnog are extremely expensive here in Canada, thanks to supply management.  Maybe next year, the prices for these will be less and I’ll feel that I’m better able to share them in your Christmas Eve snack.  Thanks for all your help Santa.

One of the faithful believers,

Carolynne

As I continue to follow the egg industry soap opera, better known as ‘As the Egg Cracks’, the Egg Farmers of Ontario (EFO) claimed in their earlier statement of defense that they did not threaten egg producers with the cancellation of their egg quota – at least in the letters that they received.  However, I was in attendance at a zone and an annual EFO meeting where the General Manager, Harry Pelissero stated that the EFO Board of Directors can do whatever they want with the quota – they can reduce it, increase it, cancel it – essentially whatever they want.  (Don’t believe me?  Well, check the minutes.  Oh, scratch that – there are no minutes to reflect this, is there Mr. Pelissero?)  The egg producer is paying a premium for the privilege of ‘using’ the quota, as long as the EFO deems the egg producer is worthy of the privilege.

As I felt that my ‘worthiness’ was running out and it came time for me to sell my quota, I was told by EFO to empty my barn prior to the EFO approving the quota sale.  Now think about that for a minute.  What would have happened if I emptied my barn and then EFO didn’t approve the sale?  They didn’t have to approve the sale but yet they directed me to empty my barn without any guarantee that they would approve the sale.  Now I know that I’m not the sharpest knife in the drawer but hello!  Who in their right mind would empty their barn prior to having the sale transaction approved?  Talk about being up a creek without a paddle!  Mr. Pelissero made it very clear with his threatening language that EFO could do whatever they wanted to do with my quota – whenever they wanted to do it.  As a result, I did not empty my barn until I had approval from EFO – in writing – that they would approve the transaction once the barn was empty.    Of course this story ends with EFO approving my quota sale.  Heck, they probably set off fireworks and popped the cork on some champagne to have a ‘disturber’ like me out of their industry!  Believe me, I’m not offended.  I’m hoping to set off some fireworks of my own as this saga continues.

How I wish I could be a fly on the wall at L.H. Gray and Son Limited, Burnbrae Farms Limited, the EFO (Egg Farmers of Ontario) offices or even at Carolynne Griffith’s (Chairperson of the EFO Board of Directors) kitchen!  I would imagine that the news of the combination of the lawsuits in which they’re involved was quite a shock, but definitely not a Halloween prank.  The written decision is definitely a ‘legal’ read but I did find a couple of things quite interesting.

-         The first item – The EFO lawyer, Mr. Spurr stated that the lawsuits were not connected at all and should not be combined – and is “a figment of the plaintiff’s (Sweda Farms) imagination”.   The judge responds with, “In my view, these allegations (made by Sweda Farms), are sufficient to draw the connection between the two actions.  They are not obviously false or implausible.”  ‘Hallelujah’ to that conclusion.  Now who’s having imagination problems?

-        And secondly, the judge awarded costs to the plaintiff (Sweda Farms) which means that egg producer levy monies are being used to pay for even higher EFO legal costs.  ‘Ouch’ to that conclusion.  EFO should have gotten out while the gettin’ was good.

In light of this decision, is there anyone other than me, thinking how foolish the EFO looks for not accepting the opportunity of getting out of this legal action altogether?  Those current court costs and legal costs are merely a drop in the bucket compared to what even a partial win for Sweda farms might be.  Have the egg producers been given the opportunity to decide on withdrawing from the action?  Were they given adequate information to make a decision?  Maybe the information was included in the minutes of the EFO meetings?  Not gonna happen folks!  EFO doesn’t provide minutes to their egg producers.  This lack of information could end up protecting the rear ends of the un-informed producers in the future.  Has the time come for the egg producers to unite and hold the EFO Board of Directors accountable for staying in this legal turmoil?   I think it’s way past time!

Soon the decision for the admissibility of all the whistleblower documents will be determined.  I can hardly wait!   Stay tuned for that decision.  In the meantime, I guess I can expect the price of eggs to go up, eh?  Gotta love supply management and the corruption that it can create.