Beginning Jan. 17, the Saskatchewan chicken industry will start an aggressive expansion program that could see the sector almost double within four years.
In early November, Chicken Farmers of Canada agreed to a Saskatchewan request for an “exceptional circumstances” quota increase.
In return, the Saskatchewan government committed itself to supporting, and eventually helping to reform, the supply management system for chicken.
“I think both sides came away a winner,” said Nicole Beauchamp of Chicken Farmers of Canada, in a Nov. 10 interview. “Saskatchewan can grow and we have a strong commitment from the provincial government for supply management.”
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In a statement the same day, Saskatchewan agriculture minister Eric Upshall hailed the agreement as “a good start to increasing chicken production in Saskatchewan.”
David Keet, the Saskatchewan Chicken Marketing Board representative at the national agency, said he expects many of the province’s 73 broiler producers will increase their production and some new farmers will enter the business. He predicted more production in the Wynyard area, near the province’s sole processor.
“I definitely think this will be a boost for the industry,” he said Nov. 10.
The province has long complained that the national supply management system was restricting Saskatchewan’s ability to take advantage of lower post-Crow rate grain prices by expanding chicken production.
In fact, for the past half decade, the province had been losing share in the national system.
Upshall had left the impression that looking outside supply management was an option if the system could not accommodate the province’s expansionist dreams. Last summer, a Saskatchewan request for significant new quota was turned down by CFC directors who decided the province wanted to expand so quickly and so much that it would disrupt the national system.
“We definitely talked about leaving the system as an option,” said Keet.
In November, Saskatchewan came back with a plan suggesting a slightly smaller expansion, implemented over four years. It was approved at a Toronto CFC board meeting.
“We think this can be done in an orderly fashion within the system to give Saskatchewan what it wants,” said Beauchamp. “It is my understanding that this will more or less restore the province to the share it had five years ago. It has been losing share.”
Under the deal, the 1998 production base of about 16 million kilograms will increase 15 percent in 1999, 25 percent in 2000, 20 percent in 2001 and 15 percent in 2002. By the end of the fourth year, Saskatchewan’s quota will be in the 31 million kilogram range.
The province agreed that it will approve an attempt by CFC during the next year to rewrite its federal-provincial agreement to give the supply management scheme more flexibility. Now, any changes must be approved by all 33 federal, provincial and industry signatories across the country.
“This will be a complicated negotiation and we now have Saskatchewan on side,” said Beauchamp.
As part of the deal, the Saskatchewan board also agreed to price chicken competitively with Alberta and Manitoba, giving those two provinces comfort that the new Saskatchewan product will not undercut them.
