Monthly Archives: December 2011

A Defining Moment – Redefined

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?

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A Defining Moment for Ontario Eggs

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?

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Is Chicken Manure Good or Bad?

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 …….

 

 

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Letter from EFO – Is There More to Come?

A letter sent from EFO (Egg Farmers of Ontario) to all quota holders/egg producers in Ontario:

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.

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