The pungent, sterile smell of pasteurization fills the Winnipeg plant of Canadian Inovatech Inc., Canada’s largest egg exporter.
Here, equipment separates yolks from whites, making the kind of dried and liquid egg products that typically are traded on world markets.
But they also extract enzymes for food and pharmaceuticals, a high-end, value-added Asian and European niche market.
A quarter of the company’s production goes to export markets, said president Hugh Wiebe. The company buys all the eggs marketing boards offer but most of the eggs used for its export business come from the United States.
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There simply are not enough eggs produced here.
Over the next three years, he is confident the company will be able to buy more than twice as many eggs from Canadian farmers as it does now.
But to expand domestic and export sales from current levels of $75 million, he needs stable supplies at world prices. Can the egg industry meet the demand?
Cynthia Currie, chair of the National Farm Products Council and a former executive of Chicken Farmers of Canada, says there is no reason why not. She sees expansion in both egg and poultry sectors to meet new demand.
Domestic markets will always be the “bread and butter” for supply managed farmers, she said.
But Currie is leading government efforts to help poultry and egg producers become active exporters.
“According to me, and I feel very passionately about this, I think the potential is unlimited.”
The sectors need to learn to exploit Canada’s reputation for quality and food safety, she said, and find opportunities in value-added niche markets, such as marinated or breaded chicken breasts, turkey dinners or brochettes. “That’s where the money is.”
While people in the sectors agree with the value-added goal, there are differing views on how, or whether, the industries can reach it.
Markets are small and lower-cost competitors are plentiful around the world.
Kempton Matte, president of
the National Dairy Council, said Canadians have to prove they can do a good job exporting low-end commodity products before they’ll be able to convince customers to buy higher-end products.
“You have to start with a commodity base, and you have to develop the export relationships,” said Matte.
But Richard Doyle of Dairy Farmers of Canada said farmers can’t afford to develop markets this way and shouldn’t waste their time trying to compete with low-cost countries.
“It’s like trans-ferring your income to some-body else so he can make money on your back,” said Doyle. “This is not market development, whatsoever.”
Then there are trade access problems. Europe is the world’s largest market for dairy products, but access is restricted.
“People think there’s a world market there and you just go and grab it,” said Doyle. “That’s crap.”
Instead “there’s a bunch of lousy markets that haven’t been protected because they’re totally underdeveloped and people don’t have money to pay for it.”
Developing markets is costly.
Wiebe, of Canadian Inovatech, said he has been building markets “egg by egg” for the past 20 years.
Understanding what foreign customers want to buy doesn’t happen overnight, said University of Guelph economist Karl Meilke.
And what they can afford to buy can change at the drop of a dollar, yen or baht.
“International marketing isn’t easy, and that’s why so much of it is done through multinational firms that have a real advantage in knowing overseas markets,” said Meilke.
“It’s tough enough to sell your product at home. It’s 10 times more difficult to sell it abroad.”
