WINNIPEG – Manitoba egg farmers are entering a brave new era of sharing their risks with processors and feed mills.
Harold Froese, chair of the provincial marketing board, said egg producers plan to be partners in the industry so they can be more effective in the small but growing export market.
“We … know what price the feedmills charge us on a tonne of feed, but the thing that we don’t know is the margin on that tonne of feed. So if we’re going to sit down and talk to them, there has to be a certain amount of trust.”
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Froese told the annual meeting of Keystone Agricultural Producers that the only growth market for eggs is in exports of egg products, such as liquid or powdered eggs, or pharmaceuticals.
However, he added the world market is chaotic. Only three percent of world production is traded internationally, much of it is subsidized and prices follow no pattern.
The domestic market for eggs is static and threatened by trade challenges.
“If we don’t participate in (the world market), how long can we maintain the stability that we have within Canada?” Froese said in a later interview. “You almost have to be part of the growth market to maintain what you have.”
The first trial of the new relationship is slated for this summer, when producers plan to add 150,000 birds to the provincial flock.
Eggs will be contracted to Inovotech, the largest processor in Canada, located in Winnipeg. About half of all eggs produced in the province already go to the company.
The increased flock will make about $1.8 million for producers, Froese said, which is less than half of what the eggs could fetch in the domestic table market.
He said the contract price for eggs used in processing is about 50 cents per dozen, while farmers get more than $1 per dozen for table eggs.
Manitoba can compete in this lower-priced market because it has high volumes and the lowest costs of production in the country, Froese said. If all goes well, the flock could increase by as much as one million hens over the next 10 years, making room for new producers, Froese said. Now, 236 egg producers keep about two million hens.
