Producers seek price stability

Manitoba producer Cal Dirks sees a proposal to create a supply management agency for producers that provide replacement laying hens for the egg industry as the best way forward.

“It is my calculation that we often are selling at less than our costs,” the western director of Pullet Growers of Canada said from his Steinbach-area farm that produces 72,000 pullets annually.

“A national agency would give us some price stability. If cost-of-production pricing is equitable for the egg industry, it should apply to us.”

Last week, more than 550 pullet producers that are the backbone of the $600 million Canadian egg industry became the first farm group in more than a quarter of a century to apply for supply management market agency status with pricing, production and import controls.

The Farm Products Council of Canada, chaired by former Canadian Federation of Agriculture president Laurent Pellerin, a supply management supporter, is expected to take a year or more to examine the request, its impact on egg prices and the reaction of the egg industry.

PGC said it secured the support of the egg industry and provincial governments before it filed its application for agency status.

“I think we have done our homework but it will take some time to be decided,” PGC president Andy DeWeerd said.

Although the majority of pullet producers are in Western Canada, the majority of production is from farms in Ontario, Quebec and Manitoba.

A pullet supply management system with cost-based pricing would add to egg industry costs although many egg producers generate their own pullet supply, said Dirks.

“It would raise their costs but that would be reflected in their pricing formula,” he said. “As someone whose livelihood depends on pullet production, this is an important initiative.”

The application for a sixth national supply management agency and the first since the broiler hatching egg agency was created in 1986 comes at a time of harsh and growing criticism of supply management schemes as an unfair monopoly, a price-gouger for poor Canadians and an impediment to Canadian trade negotiation goals.

Canadian trade policy critics regularly cite high supply management import tariffs as an erosion of Canada’s attempt to negotiate free trade access agreements for export-competitive products.

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