Over the past 100 years, chicken has gone from the occasional Sunday meal of a spent layer or surplus rooster harvested from a backyard flock, to a traditional staple that is available everywhere. Every community of any size will have fast food restaurants dedicated to chicken, while other fast food outlets will feature it and, it is safe to say, every bar in North America has chicken on its, often limited, menu.
This rise came from the inspiration of three most unlikely people – a (until very recently) largely unknown and unheralded university researcher, a woman working in the kitchen of a corner bar and a bankrupt. These three made today’s broiler industry by increasing consumer demand.
The university researcher was Robert C. Baker, a food science professor working out of a basement lab at Cornell University. “Baker was a professor of poultry science, and a chicken savant,” wrote Maryn McKenna in the online journal Slate on Dec. 28, 2012. The foods he and his graduate student assistants invented went on to launch what the industry now calls “further processed poultry.”
Among the foods Baker and his fellow researchers developed was a prototype chicken nugget, or stick. It was a challenge, but once they mastered the food engineering, they test-marketed them in an attractive box, selling them for 26 weeks in five local supermarkets. They completely sold out.
Baker and fellow researchers laid out the whole process in the Cornell publication Agricultural Economics Research in April 1963 and the publication was distributed free of charge, McKenna writes.
In the 1980s, chicken nuggets took off. McDonald’s spurred the development with its determination to add chicken to its menu and by initiating the creation of its own version.
In 1985, Canada Poultryman reported that Cuddy Food Products of London, Ont., was processing 66,000 pounds of boneless, skinless chicken meat daily and producing 4,468 McNuggets a minute for McDonald’s. The plant was utilizing the equivalent of 65 million pounds of live chickens per year.
And that was just the start
Other restaurants were soon producing their own versions and supermarkets began stocking their own frozen nuggets. A new demand for tens of millions of pounds of chicken appeared seemingly overnight.
For the full Slate story on Baker, which I highly recommend, please visit: http://www.slate.com/articles/life/food/2012/12/robert_c_baker_the_man_who_invented_chicken_nuggets.html.
The woman working in the kitchen of the corner bar was Teressa Bellissimo. Late one Friday night in 1964, her son Dominic was tending bar when a group of his friends arrived. They were hungry and Dominic asked his mother to prepare something for them to eat.
She looked around the kitchen at the Anchor Bar in Buffalo, N.Y., and spotted a pile of chicken wings that had been destined for the stockpot for soup and decided to take a chance and try something.
She deep fried the wings and flavoured them with a sauce – the wings were a hit with Dominic’s friends and quickly became part of the Anchor Bar’s menu. Soon people from across Buffalo and Ontario’s Niagara Peninsula were heading to the Anchor Bar for “wings” (I know because I was one).
Within a few years, wings were everywhere. The National Chicken Council estimated that 1.25 billion chicken wings were eaten on Super Bowl Sunday, 2012. In all of 2012, more than 13.5 billion chicken wings (over three billion pounds) were sold and the Chicken Farmers of Canada estimate that Canadians consume around 77 million kilograms of chicken wings a year.
The last of the three, Col. Harland Sanders, is the best known and for good reason – he brought “finger lickin’ good” chicken to the world. Not bad for someone who was broke when he was 62 years old.
Sanders went broke when the U.S. government built a new Interstate Highway 10 miles away from the old highway on which his restaurant, Sanders’ Court and Café, was located. Sanders was down but not out, as he had a recipe for Southern Fried Chicken that involved pressure-cooking, which he believed produced the best tasting chicken on the planet.
He headed out across the U.S. with bags of his special coating mix in his car and the recipe in his head. He offered restaurant owners a deal: If they liked his chicken, they would turn their restaurants to producing fast food chicken and pay Sanders a nickel for every chicken sold.
Suffice it to say, they liked his chicken. KFC now has more than 17,000 outlets in 105 countries and its contracts account for about 25 per cent of all the 1.7- to 1.8-kilogram broilers produced in Canada.
The chronology of supply management in Canada’s poultry industries seems straightforward and linear, but disguised are the challenges, controversy, drama and crises that set the clock in motion.
The legislative chronology began when the Farm Products Marketing Agencies Act was passed in December 1971, and given Royal Assent on Jan. 12, 1972.
The Act provided an essentially parallel structure at the federal level, which was intended to dovetail with existing provincial plans.
In conjunction with provincial legislation, the federal act enabled poultry producers to establish national marketing boards and utilize supply management. The Egg Farmers of Canada were first off the mark in December 1972 and began operations in June 1973, while the Turkey Farmers of Canada (TFC) followed in 1974 with the Canadian Turkey Marketing Agency (CTMA). The Canadian Chicken Marketing Agency commenced operations a few years later in 1979 and in 1986 the Canadian Broiler Hatching Egg Marketing Agency (CBHEMA) began operating under a supply-management system.
Canadian pullet growers are still working today to establish their own agency.
The journey to supply management in Canada’s poultry industry involved interprovincial wrangling, constitutional challenges, the collapse of markets post- war, internal confrontations and a series of false starts and dead ends. It was a journey in which Britain and the United States played significant parts.
Fred Beeson, then editor and publisher of Canada Poultryman (now Canadian Poultry), played a key role throughout the early years in defining the need for change, promoting (and perhaps originating) the idea of supply management and providing coverage of the long, strange quarter-century trip.
From the export-led boom of the war years, through the struggles to retain international markets, to the interprovincial confrontations and court and constitutional challenges, Beeson and his magazine were there.
Prior to the Second World War and during the Great Depression, the Canadian poultry industry was hardly an industry. Beeson once said that, “During the depression, ’30’s agricultural production costs were hardly considered. It was enough, the producer was told, that he could scrape up sufficient food for his family and keep off relief.” Producing eggs and chickens was for the most part a secondary industry on most farms. Small flocks were kept in small poultry houses and the eggs and birds were sold locally to generate some cash for the farm.
But when the war happened, it all changed. Struggling for survival, Britain went all in to the war and needed food – a lot of food. Canada rallied to the cause, not only sending its sons and daughters, but also organizing itself to supply food, with eggs being a key component. After the United States entered the war, it also found the need for imported food (particularly chicken). Responding to the dire needs, the Canadian government set up a top-down apparatus to stimulate food production and delivery.
And it worked. There was a dramatic shift from food grains to feed grain. Prices were stabilized, production surged and exports boomed.
In 1945, Britain took almost three million cases of eggs from Canada.
Then, the war ended, and no one was certain what would come next. Some argued that the egg export industry would be a permanent feature of the Canadian economy. Others insisted that the exports were a wartime bubble that would pop.
In January 1946, Beeson wrote: “With the war over, poultry producers find themselves at the crossroads. Will subsidies be maintained, will the overseas market continue and what price will it net producers?”
Later that year, Beeson penned that the shape of the crossroads was becoming clearer. Denmark, Canada was told, had begun to sell eggs to Britain at 14 shillings less per 30 dozen cases than Canada. He wrote in June 1946, “How then can Canada continue to hold her position in the British market when other European countries are getting into production also?”
It was a critical question because half of Canada’s total egg production was being exported to Britain.
S.C. Barry, associate chief of the Dominion Marketing Service, said at the hatchery services convention in October 1946 that the British market was the key to prosperity. He said that Canada “must hold a substantial portion of that market, that it is the main force which will influence the barometer of prosperity in the industry.”
The stresses and strains of emerging from a long wartime economy were also being felt across agriculture.
In February 1947, the Canadian Federation of Agriculture met with the federal cabinet and its brief said, “We believe it is highly desirable to have order and system in our production and marketing programs all the way through from the farm to the world market.”
But calling for order was far easier than achieving it. Change was in the wind.
Many economists, businessmen, financiers and politicians wanted a quick return to the prewar-free enterprise system with the removal of controls and subsidies. For example, in May 1947, Beeson wrote of the prospect of the removal of feed subsidies and higher prices for grain without the possibility of higher prices for eggs or chicken. “To maintain production it is absolutely necessary to continue a stabilized price relationship between costs and selling prices.” He continued, “Removing subsidies on grain will crumble the poultry industry as surely as the stabilized price has built it up these last few years.”
A year later, the situation had deteriorated to the point that the B.C. Poultry Industries Council called for national action and Beeson called for the passage of a national Natural Products Marketing Act that would work in conjunction with provincial marketing legislation. This would allow the establishment of a national board so that “the industry can regulate and control its own future.”
While Canada dawdled its way to a national board, Australia acted. It faced a similar situation in terms of both the British export market and its legislative framework – there were state marketing boards, but no national body. But, in January 1949, the Australian government established the Australian Egg Board to co-ordinate with the state agencies and buy and sell eggs and egg products intended for export. The board was to have 10 members, six of whom were producers.
In June of that year, Beeson called for the formation of a national export board to handle surplus production.
But with the decline and collapse of the British egg market and the re-emergence of the U.S. as an agricultural power and exporter, the 1950s and 1960s were marked by unstable prices, uncertain supplies, and fluctuating producer and processor revenues.
The instability came at a time when, building on its wartime need for production and efficiency, poultry emerged as an industry utilizing scientific and industrial developments in husbandry, feed, housing, lighting and animal health. As Beeson wrote, the days of the barnyard flock and poultry as a secondary enterprise aimed at generating a few extra dollars for the farm were over. Poultry producers’ flocks now numbered in the thousands or tens of thousands and poultry was no longer a sideline for thousands of farmers.
Key in all this was rural electrification. This was a singular goal of provincial governments and agencies following the war and changed everything for farmers. For poultry producers it enabled the construction of modern barns with lighting, feed and ventilation systems that dramatically raised productivity.
The economist Paul Krugman wrote recently in the New York Times that “electrification, for example, was a much bigger deal than the Internet.” It was a singular force in driving economic growth deep into the 20th century, he said.
Despite all the advances, the Canadian poultry industry remained unstable. In 1961, the B.C. broiler industry was facing overproduction and shipping its surpluses to Alberta, Saskatchewan and Manitoba. Beeson wrote that none of the provinces wanted the products either, as it helped break their prices.
In January 1962, British Columbia formed a broiler board to rein in production and stabilize prices. It was the first and only poultry board operating in Canada at the time. “Here we were with no surplus broilers in B.C., none in the neighbouring provinces and a rising price,” Beeson wrote after the board’s establishment.
Beeson argued in April 1964 that the industry needed more than the marketing control allowed under some provincial laws. The editorial said, “One cannot help but feel that it is not marketing control that is needed, but production control. Our feeling is that it is this form of control that all other poultry groups need to ensure a continuing healthy marketing setup.”
“If an industry has a surplus,” the editorial continued, “there is no known method of maintaining a satisfactory price with or without a board short of destroying the surplus.”
In November 1964, with turmoil continuing and emotions at their peak, Beeson weighed in again in his editorial and pulled no punches: “Hoping the other fellow will go broke is a poor way of evaluating the profit prospects of a business. That’s the present state of affairs, let’s face it.”
He continued: “Don’t let us waste time pointing fingers at one another. Far better to face the fact we are not living in a period of scarcity anymore. We can, in any one season, quite easily double our production across Canada. In fact that’s the way we have been heading for several years; not making it because too many go broke each year.
“It may well seem that we harp on this problem of overproduction and consequent low prices eternally in these editorials. We don’t apologize because this is the number one problem of the industry.”
Through the 1960s, other provinces joined B.C. in forming provincial boards including Quebec and Ontario in 1965, Saskatchewan and Nova Scotia in 1966, and Manitoba in 1968. The boards had authority to regulate pricing and production through marketing quotas but only within the province – often they faced cheaper product from other provinces or from the United States.
This culminated in 1970, with Ontario and Manitoba shipping large volumes of eggs to Quebec. In response, the Quebec government allowed the provincial egg marketing board to restrict the imports. In retaliation, the other provinces restricted the movement of Quebec chicken into their provinces, and the result was known as the “Chicken and Egg War.”
However, Manitoba devised a brilliant legal tactic to deal with the situation. Since it could not refer the Quebec legislation to a Manitoba court, it enacted identical legislation of its own, and then referred that legislation to its own Court of Appeal, where the legislation was struck down. This decision made it clear there were limits to what provincial boards and legislation could accomplish without co-ordination by both the provinces and the federal government.
A brief history of supply management on Agriculture Canada’s website says that Bill C-197 was introduced shortly thereafter. The bill “would have enabled a national marketing agency to control production through a quota system and allocated a portion of the national market to each province. It would have prohibited surpluses in one province from being sold in another province and set the price paid producers according to production costs.”
But that legislation died on the order paper.
It was reintroduced as Bill C-176 and was passed and enacted in January 1972, but only after substantial debate. From that, the National Farm Products Marketing Council was established and it paved the way for the creation of the Canadian Egg Marketing Agency, with the forming of the CTMA following shortly thereafter. Chicken took longer because of interprovincial disputes over shares of national production and quotas.
The establishment of a national agency should have put an end to the disputes, but the debates continued. In a February 1980 editorial, Beeson criticized chicken agency members for “jockeying for position in the pecking order,” adding, “…probably it will again take the Minister of Agriculture to put his foot down, heavily, really heavily.” Beeson added: “If it hadn’t been for such provincial bickering four or five years ago the Agency would have come into existence and annual imports would not have averaged more than 5 million pounds instead of fifty million plus a year as of now.”
In a 1975 debate in the B.C. Legislature, D.E. Lewis said: “I have to say quite openly that I feel that the Canadian Egg Marketing Agency is a disaster . . . . I don’t think that CEMA has been beneficial to B.C. or the farmers or the producers.”
“If the present CEMA system is allowed to continue, I can see nothing but chaos in the province,” Lewis said.
Similar debates were held and opinions aired across the country. Surprisingly, the federal Agriculture Minister, the late Eugene Whelan, long a strong supporter of marketing boards, agreed. “CEMA is not the success that producers want it to be. Nor is it the success I want it to be,” said Whelan. “The final verdict will come in the next few months. If the provincial boards live up to their agreements, our chief egg marketing problems will end. If they don’t, the next press conference I call on CEMA will be the last.”
Basically, the problems stemmed from overproduction and the reluctance or inability of provinces and the provincial boards to control it. Compounding the difficulties was a continued rise in U.S. imports. It got to a point where Whelan told the provinces that if they instituted tough, enforceable provincial regulations and agreements to deal with domestic overproduction, he would deal with the Americans.
An example of tough new provincial rules came on April 18, 1975, when the Ontario Farm Products Marketing Amendment Act was signed into law. It gave the Ontario Egg Producers’ Marketing Board, for the first time, authority to establish regulations to carry out effective production control utilizing quotas and providing for the inspection of premises (without a warrant) when it was believed the regulations were not being followed.
With provincial regulation in place, the federal government did its part by imposing strict import quotas for eggs and other supply-managed poultry and poultry products. The U.S. challenged these import quotas at the General Agreement on Tariffs and Trade, but they were upheld.
In 1978, the Supreme Court of Canada was called into the fray. The Court was asked by the Attorney General of Ontario for a ruling on the constitutionality of the provincial and federal rules and regulations, as well as the agreement between the provinces and the federal government.
In its ruling, the court said: “The provincial regulations in question were not aimed at such extraprovincial trade and in so far as it affects this trade it is only complementary to the federal regulations. This is perfectly legitimate, otherwise federal-provincial cooperative action in regulating a commodity in both intraprovincial and extraprovincial trade would be impossible.”
Chief Justice Bora Laskin, writing for the majority, wrote that the federal-provincial agreements establishing supply management were lawful, “even if it be an awkward way of overcoming a want of federal authority to regulate through an agency of its own the marketing of eggs throughout and beyond Canada, including local marketing.”
Taking that the Supreme Court settled the legal argument for supply management, William Stewart, Ontario’s Progressive Conservative minister of agriculture from 1961 to 1975, described the social and economic necessity of egg production as “a disaster course” at the London Poultry Conference in June 1972.
And Eugene Whelan described the politics of the time, saying: “I went through hell to make sure you had supply
This could be Canada’s year of the trade deal since an agreement with Europe is expected, another with India is possible and Japan may be in the offing. And while the Trans Pacific Partnership is supposed to wrap up in October, it likely won’t.
Meanwhile, a huge deal that you’ve likely never heard of (and which doesn’t involve Canada or the U.S.) is in the works: Asia is gearing up for negotiations leading to the biggest trade deal on the planet – the Regional Comprehensive Economic Partnership, which comprises 16 countries in the Asia-Pacific region, including China, India, Japan and North Korea.
What is remarkable, aside from the belief of most Asian commentators and observers that the deal will come together fairly smoothly, is that it is being ignored in North America. A Google search carried out in mid-December showed no Canadian or American references to the RCEP.
North American attention is instead focused on the smaller, more controversial TPP because neither the U.S. nor Canada is part of the RCEP negotiations, therefore it serves little purpose to discuss it.
However, recent reports of TPP negotiations are that they do not appear to be going smoothly. Reporting from the recent Trans Pacific Partnership talks in Auckland, New Zealand, international trade expert Peter Clark wrote on iPolitics.ca: “The smell of Doha is in the air.”
Another blow for those cheering for the TPP is the fact that Japanese Prime Minister Yoshihiko Noda, who announced his government’s intention to join the TPP talks, was trounced in a mid-December election. The victorious Liberal Democratic Party promised in its platform to oppose entering the TPP negotiations if abolishing tariffs “without sanctuary” is a
The position gives the new Japanese government some wiggle room. It could enter the talks if allowed to protect agriculture and some sensitive cultural issues, but if assurances are not offered, Japan could stay out alongside India, North Korea, Thailand and others.
The 11 countries in the TPP talks are the United States, Australia, New Zealand, Canada, Mexico, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei. What is interesting is that Australia and New Zealand are also a part of the RCEP talks.
The TPP is seen in much of Asia as a U.S.-driven show. Washington seems to want a big comprehensive deal covering goods and services, investment, intellectual property rights, environmental protection, labour, financial services, technical barriers and regulatory issues.
However, there are land mines buried everywhere in this shopping (wish) list.
For example, New Zealand has a national drug-buying program called Pharmac that gives the country heft when negotiating the purchase of pharmaceuticals. New Zealanders love the program, but the U.S. doesn’t and wants to see greater patent protection for its drug companies. The U.S. also wants provisions that allow companies to challenge government laws and sue, but Australia has said point blank it will not sign a deal that allows foreign companies to challenge its laws.
India, which isn’t at the negotiations table, is reportedly uncomfortable with the “WTO-plus approach” adopted by the U.S. at the TPP.
Meanwhile, the RCEP is seen as a strictly economic arrangement aimed at consolidating existing free trade agreements, further lowering customs duties and reducing trade barriers. This comparative simplicity makes it much more attractive than a U.S-driven deal that would seemingly internationalize U.S. laws.
There is also a geopolitical component to all of this. Much of Asia appears concerned with China’s growing power, and the U.S., as seen during the presidential debate on international policy prior to the recent election, is certainly paying attention.
The recently elected Japanese government wants closer political ties with the U.S to act as a counterbalance to China, but it needs good economic and trade relations with China.
Writing from New Delhi, Jyoti Malhotra said that China’s support of the RCEP and the rivalry with the TPP could become “a new flashpoint in South-East Asia.”
Jane Kelsey, a professor of law at the University of Auckland, wrote: “It is increasingly clear that US politicians see the TPP as a vehicle to re-establish America’s ascendancy in the Asia-Pacific region to counter China’s emergence as a superpower.”
Kelsey cites the Taipei Times, where she added that there is a “serious risk” of “a new Cold War, conducted through the proxy vehicle of economic integration agreements.”
If nothing else, all of the above indicates that the TPP is far from the simple, straightforward, clean trade deal mythologized by some in Canada. In fact, it should come with a label that says “Handle With Care.”
When I was young the world went MAD.
Schools across North America held drills teaching children to hide under desks. My public school – a classic eight-room, two-storey, brick and concrete edifice built in the 1930s depression – went beyond desk hiding. In the basement there were two large windowless rooms: one was open and used as a recess area on rainy days, while the other had a massive, steel bank-vault-style door that was only opened during drills. Inside were shelves of canned goods, containers of water, blankets and first aid kits. On drill days the pupils were led into this room, and once inside, the door was closed.
It was, in effect, a massive bomb shelter designed to protect the young from Mutual Assured Destruction. In retrospect. the drills and the bomb shelter were unnecessary.
Although the nuclear arms remain, we have moved away from that edge. But people seem to have a need for MADness, even if the current forms come with less catastrophic baggage.
In the recent U.S. election campaign, spending exceeded $6 billion and the presidential campaign television ads appeared – by one estimate – a million times, with most appearing in just 10 states. Living across Lake Erie from Ohio and Pennsylvania, I was able to watch this play out on Cleveland, Ohio, and Erie, Penn., television.
I saw character assassination, misrepresentation, obfuscation, distortion and, not to put too fine a point on it, lies. This was accompanied by demagoguery, deceit, derision and deception. This went on, particularly in Ohio, hour after hour, day after day, week after week, month after month. The barrage was so intense that it filled virtually every 30- and 60-second spot and drove other advertisers from the airwaves.
At times, this became almost laughable. There would be, for example, a 60-second Republican ad, followed by a 60-second Democratic ad, followed by a repeat of the Republican ad.
Making the situation even worse, in my view, is that the people or companies supplying the money to pay for these ads are mostly hidden. They seemingly lack the courage or moral fibre to be accountable.
The end result of all the attacks and all the spending was that both presidential candidates and many candidates for the Senate and the House of Representatives were diminished in the eyes of voters. If anyone had accepted and acted upon what they had heard in all the ads, the only rational choice would have been to vote None Of The Above.
In the end, American voters – if they believed the ads and the broader campaigns – were left with a choice, not between outstanding candidates who disagreed on fundamental issues, but between two destructive ogres.
But for all the ads and all the spending, minds seem not to have changed. The election results in November reflected where the polls were six months earlier. The sole discernible impact was the raised level of cynicism.
Many analysts have concluded that the decisive votes were driven by a modern version of the oldest political strategy: the “ground game,” or neighbour-to-neighbour politics and the ability to get supporters to the polls. The Democrats, at the presidential level and in competitive Senate races, had a better ground game.
This has also been seen in recent Canadian elections. While there are ads, which can be as bad as those in the U.S., the Conservatives have been better on the ground, particularly in contests for competitive seats.
One of the lessons from the U.S. election should be that trying to outspend your opponents and deploying billions in money bombs is an excerise in futility. If both sides have the capacity to, as they used to say, bomb until the rubble bounces – all you leave is a political and intellectual wasteland.
One analyst, whose name I’ve forgotten and who was taking part in one of the innumerable panel discussions that followed the election, observed that a couple of hundred million in ad spending would have ensured voters were aware of the issues and informed of the differences between the candidates and their parties. The additional billions were wasted.
It could also be argued that a better purpose for all that wasted cash would be direct job creation. Or it might have been useful in helping deal with ongoing mortgage problems or assisting schools or students faced with surging tuition costs. The money might even have been squirreled away for a rainy disaster like Hurricane Sandy.
Just about any use would have been better than the mutual assured destruction that recently played out on U.S. television.
It wasn’t supposed to happen this way,” is how Daryll E. Ray, Blasingame Chair, Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, summed up the state of the North American hog industry in a 2009 newsletter.
Now, three years later, it bears repeating, as the hog industry is in a difficult situation. One of the four largest companies in Canada is in receivership – again – and another is bankrupt. Others are pleading for hundreds of millions of dollars in government help to bring short-term stability to the industry.
The causes of this year’s crisis are straightforward: the rise in the value of the Canadian dollar versus its U.S. counterpart and other currencies, higher corn and soymeal prices due to the U.S. drought and mandatory country of origin labelling by the United States have reduced prices for feeder pigs being exported.
All of this resulted in $40-50 per head losses for producers. And faced with such losses, some producers are trying to staunch the flow of red ink by selling down their herds or liquidating them altogether. This increases the flow of hogs to market at a time when consumer and export demand is softening and the end result is dropping market prices.
As Ray pointed out in his 2009 commentary, this wasn’t supposed to happen. In the 1990s, Canada rid itself of the remains of the Crow Rate, which subsidized the cost of moving Prairie grain by rail to port. This was, in part, designed to eliminate grain market distortions. “As a result, we ended up with increased hog production because Western Canadian farmers saw it as a way to diversify their income sources and increase the value of their grains by feeding them to hogs,” Ray wrote.
What wasn’t expected was the way the Canadian industry evolved. Prairie feed grain production would boom and be more than adequate for an expanded hog herd, but in reality, it didn’t and wasn’t. Instead, canola boomed as better varieties of the oilseed were developed, markets grew and prices increased. Farmers also developed a preference for corn and soybean meal imported from the U.S.
Importing feed from the U.S. to raise hogs to market weight seemed to make little sense. So much of the industry specialized in feeder pigs, which were born in Canada and then shipped south to be raised to market weight and processed.
The industry also consolidated. Bigger was definitely seen as better especially by provincial governments that provided a variety of forms of encouragement including financial encouragement.
The day of what were known as the “in and outers” was over. These were grain farmers who, when grain was in surplus and low in price, would produce hogs, and this worked because quite often when grain prices were low hog prices were high.
That system looked sloppy and incoherent to policy makers, but on the farm it offered a form of financial stability and it worked.
Ray wrote that it was happening in 2009 and warned individuals to “call into question some of the assumptions upon which the industry is built. And in some ways it is less resilient than it was when farmers could switch from grains to meats and back depending on the relative profitability of each item.”
“Less resilient” is probably an understatement. Two-thirds of Canadian production is dependent on exports, and when markets are good they can be very, very good. But they are fragile. If Russia, or any other country, decides it should produce more hogs and import less pork, it hurts. If the United States decides it wants country of origin labelling, it hurts.
If the Canadian dollar rises in value, it hurts.
When drought or other production problems cause grain prices to spike and all you’ve got to earn an income are hogs, it hurts. When herds start liquidating and hog prices fall, it hurts. When governments tire of looking at the second massive bailout in three years, it hurts.
And when you look back at the prospects for the hog industry heading into this year, it really stings. Record acreage and a bountiful corn crop was predicted for the U.S., grain prices looked as if they would be low, the Canadian dollar was sitting under $1 US, and was stable, and Canadian hog exports were booming.
But then, as it happens, everything changed.
If you are wondering what this has to do with the Canadian poultry industry, the answer, thankfully, is not much. But it is worth noting that in a way – marketwise – chickens are small hogs. If the Canadian poultry industry had decided decades ago not to adopt supply management (as the hog industry did) everything now hitting the hog industry would be pummelling poultry.
Clark Poultry Farms Ltd. faced a decision. Some of its broiler barns required upgrading and expansion to provide the efficiency demanded in today’s broiler industry.
The question was whether to retrofit and expand on existing sites or build for the future on a single site. The decision was made to build for the future.
Clarks acquired a 180-acre farm, added 135 adjoining acres near Hagersville, Ont. – southwest of Hamilton – and put up four new state-of-the-art barns. The site is close to Clark’s head office in Caledonia, Ont. and offers three-phase power and natural gas service. The new barns were built 1,350 feet from the nearest house, and 1,300 feet off the road. The new barns are two stories, and 60 by 450 ft., collectively housing 240,000 broilers. There is also a separate building containing an office, generators, water treatment equipment and pumps.
Two construction firms were employed to oversee the project, each building two barns. Braemar Building Systems of York, Ont. and Cor Pannekoek Construction Ltd. of Burgessville carried out the construction, which took about four months. Harold Bundy of Braemar said that while it was a large project it was straightforward because Clark knew exactly what was required.
“Everything was decided before the barns were built,” he said.
Pannekoek agreed this was a big project, but that isn’t what makes it stand out. It stands out because of the demanding specifications Clark put in place.
“These barns were not built to cut corners, they are the best of the best,” he said.
Bundy added, “They employ the latest design and materials. They did everything to ensure the barns are easy to clean and operate. This included the use of fibreglass panels in each barn, which is a new concept in poultry production houses.” The panels are extremely durable and very easy to clean.
The barns also employ steel support beams, which means the supports can be spread over greater distances providing more space inside the barns. This makes for durability and easier cleaning, as well as a brighter, airier appearance.
Overall “the quality amazes everyone,” Pannekoek said. Even the insulation is the very best. The concrete foundation is “sandwich wall” construction with Styrofoam insulation. The framed walls are insulated using Roxel insulation, which is an extremely durable slag product that provides an insulation value of R 21.5.
W. Murray Clark Limited supplied and installed all of the production equipment to the same exacting standards. The Clark Poultry Farms facility uses Big Dutchman automatic pan feeding systems and Ziggity watering systems. It also uses the Thevco Proline system to monitor and control every aspect of production. The system provides readouts on feed and water consumption, barn temperature, humidity, and the weight of the birds. The heating system is also fully monitored and computer controlled.
An air inlet controller operates within three distinct zones and generates continuously variable settings based on temperature and humidity.
The Target Bird Weighing System tracks the average weight of the birds, the standard deviation and uniformity, and daily gain.
There is also a MISTer misting system, a Megola Scaleguard system and an ozone water purification system. The MISTer System manufactured by MEC Technologies and distributed by W. Murray Clark Limited provides cooling in hot weather. The system is designed to produce micron-size water particles that flash evaporate in hot air. This cools the air without wetting the birds or leaving residual moisture.
While the site has more than adequate water supply from a well, the water is hard. The Megola Scaleguard system provides a unique electronic water treatment that prevents scale buildup. Clark has tried the Megola system at other sites and decided to include it in the new barns. The system was developed in Germany in the early 1990s and not only prevents new scale formation, but also eliminates previous scale buildup. The system works by inducing scale to remain suspended in the water rather than coating surfaces in the water system. The system itself is small, consisting of insulated electrical wire wrapped around the incoming water line to form a series of closed coils. The wire is connected to a computerized control unit, which passes electricity through the coils generating magnetic fields that pass through the water at a pre-programmed frequency. The frequency of the signals resonates with the natural vibration frequencies of the water molecules and the dissolved ions. (An extensive review of the Megola system can be found in the July 2002 edition of Canadian Poultry.)
The ozone water treatment system consists of a generator and mixing tanks to ensure full treatment. Iron is oxidized when exposed to ozone and sulphur is reduced to sulphates. Ozone also effectively deals with pathogens.
While the combination of a descaler and ozone system is common in Europe, this is a first for Canada. Rob Chambers of Hunsingers, the Fisherville-based company that did the installation, said both the Megola descaler and the ozone treatment system were installed quickly and easily.
For ventilation, each floor has five 18-inch, six 24-inch, and eight 48-inch fans as well as 11 circulating fans. These Canadian-made Vic fans can operate at slow speeds providing “a beautiful flow of air,” according to Clark’s production director, Ron Shoup.
Biosecurity was also in the forefront in the planning. The barns are set well back from road and strict access protocols are utilized, Shoup said
Clark is also trying a bit of an experiment with the heating system. In one of the barns, the heaters are vented to the outside. In theory, this may improve the air quality in the barn, but to date it is just a theory and Shoup wants to see how it works in practice.
There are eight feed tanks with twin flex augers for maximum control. The Reliable Scale system is also set up to track daily consumption, deliver precise amounts of feed, immediately detect consumption problems and calculate feed conversion. “We can get a feel for everything,” said Shoup.
There are also two 350,000-watt Sommers generators, which provide a backup power system. This is a good idea in an area where an ice storm knocked out power lines and left many places without power for four days last February.
There are also wide gravel areas around the barns to ensure accessibility for feed and chicken trucks, and straw chopping service equipment.
The sensitive issue of manure disposal has been carefully considered. Clark Poultry Farms has created and implemented a comprehensive Nutrient Management Plan that will see much of the manure generated on this farm shipped to mushroom growers across Ontario.
Clark has built an efficient, state-of-the-art, environmentally-friendly facility.
The four new barns are two stories each, and 60 by 450 ft., collectively housing 240,000 broilers.
The combination of the ozone system and the Scaleguard system, both from Megola, is common in Europe, but this is a first for Canada.
Ron Shoup, Clark’s Production Director
The World Trade Organization (WTO) proposals released Feb. 12 must be rejected, Phil Boyd, executive director of the CTMA, told the Ontario Turkey Producers’ Marketing Board annual meeting March 7 in London, Ont.
The draft proposals perpetuate the imbalances that came out of the Uruguay Round by proposing less than satisfactory changes to all forms of domestic support. They also call for the elimination of export subsidies over nine years, the reduction of over-quota tariffs by 40 to 60 per cent, no reduction of in-quota tariffs and increased access to 10 per cent of current consumption.
The proposal doesn’t benefit Canadian farm exporters, but does real damage to supply-managed industries.
It does “little to open markets but will do serious damage to supply management,” he said.
It increases access to our market, Boyd said, by 13 million kg and will result in prices that reflect the U.S. market.
Since 1988, Canadian live turkey prices have ranged from 25 cents to 50 cents per kilogram higher than U.S. prices.
Art Roder, chairman of the Ontario Turkey Producers’ Marketing Board, also said the WTO negotiations are worrisome.
“The current direction of the WTO negotiations are of great concern for Canadian supply-managed com?modities,” he said.
Boyd said every country has something to be unhappy about with the WTO proposals.
Canada had tabled proposals aimed at levelling the international trade playing field.
These included: lower regular tariffs, minimum access of five per cent, in-quota tariffs set at zero and effective over-quota tariffs.
Meanwhile, the U.S. called for a maximum tariff of 25 per cent after five years (compared to Canada’s current 154 per cent over-quota tariff). The U.S. is also calling for an increase of 20 per cent of current access levels. For turkey, that would represent an increase of about one million kilograms a year.
If tariffs are reduced to the level proposed by the U.S., imports could land in Canada at 50 cents a kilogram below the current Canadian market. Boyd said in his presentation that this is “not acceptable.”
The E.U. has called for average tariff reductions of 36 per cent with a minimum reduction of 15 per cent.
Under the E.U. proposal, Canadian tariffs would be reduced to 98 to 139 per cent. Imports would be a threat depending upon market conditions and changes in currency values, Boyd said.
The E.U. proposal is also “not acceptable,” he said.
Michael McCain, head of Canada’s largest food company, Maple Leaf Foods, said Canada has a strong reputation around the world for food safety. This is a strength that the country should build on, he told the 53rd annual Canadian Poultry and Egg Processors Council convention in Halifax on June 9.
“Canada has a pristine image,” he said.
But Canada can’t afford to rest on its laurels. “We need to be world leaders,” he said.
“We need to do not just a good job, but a great job.”
Doing a great job will pay dividends because “consumers today care about food safety more than anything else.”
He also cautioned the audience that “Food safety is not about great science all the time. It’s about consumer confidence. Consumer confidence doesn’t come in a scientific bucket, it comes from what they believe in their hearts.”
For example, Maple Leaf has removed bone meal from pork diets because its Japanese customers demanded it be done. It wasn’t a science-based decision, Maple Leaf could have refused, but the Japanese customers would have quickly found another supplier who would meet the requirements of that market.
In the pork market, Maple Leaf works diligently to differentiate itself from its American competitors. It does this because it has to.
While Maple Leaf looms large in Canada and is this country’s largest food company, McCain said “We consider ourselves the little guy – we are the 10th largest in North America.”
“In the global arena, size matters,” he said.
But in the poultry business Maple Leaf doesn’t have a global view. “We have no global view in poultry because the system won’t let us,” he said.
But he accepts that and believes supply management should be supported. It is a system that can provide fair returns to all stakeholders provided it does its job, he said.
He also said he believes supply management is a social policy and that “it’s not my job to deal with that.”
But that doesn’t mean the system is working perfectly – far from it.
“We feel the current system is not working properly,” he said.
The company, which has built its Canadian poultry operations to service a supply-managed industry, wants to help fix what’s wrong.
“Our first choice is to shore up the system and make supply management actually work,” he said.
A critical current problem is oversupply. “We don’t want to face a downturn of this magnitude again,” he said.
He also said “supply management shouldn’t transfer price risk from one link in the supply chain to another link in the supply chain.”
It doesn’t serve the industry well when processors are squeezed by over-supply and wholesale prices collapse. It undermines the basic goal of supply management, which is stability.
“We feel the existing system is not working properly and needs change. We need to make those changes together collaboratively as an industry,” he said.
“Stability and profitability is critical for us all and the health of the system,” he said.
Maple Leaf is committed to working constructively with all industry stakeholders to further improve and strengthen the effectiveness of Canadian supply management, he said.
He said the problems facing supply management include domestic over-supply and the lack of credible (real-time) data, reactive versus proactive market response, and provincial boundaries.
“Canada is a national market. Canada is small enough as a national entity let alone trying to subdivide it into regional fiefdoms,” he said.
All of these problems can be fixed if the industry works together, he said.
But he doesn’t think trying to employ free market measures in a supply-managed industry can work. “The whole supply system could implode.”
“In or out is our belief,” he said.
McCain said that while Maple Leaf is prepared for any outcome it would prefer to make the existing system work.
“If supply management went away we would survive and thrive. But that is not, I reiterate not, our first choice.”
Returning to animal health issues, McCain said the recent case of BSE in Alberta shows just how vulnerable an industry can be.
He also cautioned the poultry industry about complacency.
“You might think we’re protected from this by our supply management comfort zone in poultry; you cannot count on that.”
The keys are prevention through measures such as: HACCP; preparedness because “no matter what we can do we can never eliminate the possibility of food safety breeches”; and proof – we have to be able to prove we’re doing what we say we’re doing.
The national egg production and allocation system has been so successful in increasing consumer demand that it has created a crisis that threatens the existence of the CEMA and the well being of Canada’s egg producers, CEMA chairman Felix Destryker said at the agency’s annual meeting in Ottawa.
“It is somewhat ironic, but the challenges we face are the result of our accomplishments,” he said at the March meeting.
The cooperative work of CEMA’s marketing team and the provincial boards has paid off and now agreement must be reached on how to share the market and the allocation of new production.
But agreement has been hard to find.
Last year, directors and staff worked long and hard to find a way to resolve the issue. A discussion paper was circulated in January. That was followed by meetings through the summer.
“Directors repeatedly went through exhaustive debates. We had to take into account everyone’s point of view. The views were many and they were complex. In some cases, they reflected fundamental questions about the philosophy of our system and how it ought to function,” he said.
In November a package was approved by CEMA’s board that would meet growing domestic needs.
It included 430,000 new layers to be allocated across the country on a regional basis, a uniform national levy and an increase in the buy back price. Ontario and Quebec each got 35 per cent of the allocation–150,000 new layers each. Other provinces were allocated between 8.5 per cent of the total for British Columbia and 0.4 per cent for PEI.
To meet the processors’ export needs Ontario and Manitoba were each allocated 200,000 quota units for 1999. The agency also had to create an export market development quota to accommodate new ventures between processors and individual producers. The pressure from government to open the door to such new ventures was enormous, he said.
But CEMA was concerned that such private agreements “could disrupt markets if they were not properly managed within the Canadian egg marketing system.” After producers, the processors and the provincial government agreed to security measures ensuring the project would not disrupt markets, up to 500,000 units were allocated to Manitoba.
When CEMA directors reached this agreement last November, DeStryker said: “ I had a great sense of relief.”
“I dreaded a looming egg war and my fear was erased when an agreement was reached.”
The agreement wasn’t perfect and plans were to continue negotiations.
“But I took some satisfaction from the fact that we had a new framework in place to allow expansion and increased prosperity,” he said.
But the satisfaction of achieving a breakthrough was short lived.
In January, the Quebec board withheld payments to the Pooled Income Fund. Quebec had given notice in July 1998 that they would withhold payments beginning in January 1999 if their concerns over allocations weren’t resolved.
“There is very clearly a disconnect between, on the one hand, what was negotiated and agreed to, or at least what we, in good faith thought was agreed to, and what, on the other hand happened last January.”
Now, Ontario has said it will have no choice but to discontinue financing the national pool if Quebec’s concerns are not addressed, he said.
“I sometimes get the impression that some of us imagine the overall egg marketing system in Canada to be some kind of tool with or without options that can be borrowed for a period of time to better suit each user,” he said.
“I do not think our egg producers, and maybe even those much closer to the scene, realize just how serious the situation is and to what degree the cannibalization of each others’ markets is imminent. It is an ugly scenario,” he said.
Dealing with the industrial products program is the most complex challenge facing CEMA and the provincial boards. But this program lies at the heart of the supply management system.
“It prevents provinces and regions from cannibalizing each other’s markets in an effort to sell their products. And preventing cannibalization in breaking eggs is the key to preventing cannibalization in table eggs.”
“If we lose agreement in the national industrial products program, we lose agreement on the heart of supply management,” he said.
There is the danger of a domino effect of competition among provinces and regions leading to the loss of price supports.
“The chicken and egg wars of the late 1960s and early 1970s underline that this is an ugly yet realistic scenario,” he said.
The way to avoid that scenario is to cooperate and communicate.
“We look after the interests of producers most effectively when the provincial boards put forth their best cooperative efforts within the national agency,” he said.
But cooperation alone won’t provide all the answers. Communication is the other key.
“We must escape from this predicament of not understanding each other,” he said.
To help resolve the communications problem CEMA has hired RANA International, a firm specializing in communication and conflict resolution.
The firm has already met each of the provincial boards and will work through the spring to assist the agency and its members.
“I am convinced they can help us by providing us with the necessary tools to avoid these cynical crises which make our lives unbearable and jeopardize our future,” he said.
You no doubt know the old line about the way to get out of a hole; the first thing you do is stop digging.
But that is just the first thing. The next item on your escape plan should be to assess just how deep a hole you’re in and what the hole looks like. Common sense dictates that it is going to take longer and be harder to get out of a 100-foot-deep hole than a five- or 10-foot one.
The shape of the hole also matters. In St. Andrews, Scotland, among the ruins of the old castle there is something called the bottle dungeon. As the name implies, it is shaped like a bottle and is as bleak a place as can be imagined. Prisoners were lowered into the cell and escape was impossible. The only way out was to yell for help and hope it arrived.
Today, much of the world economy – think of southern Europe – is in a 100-foot hole. Other areas, such as much of the United States, are in a decent sized hole. Some regions, such as North Dakota and Montana, are standing on little hills because of newly developed oil and gas reserves. But in California and Nevada, the hole is deep and getting deeper. And in the rust belt of Michigan, Indiana and Ohio, the hole is deep, but thanks to the saving and recovery of the auto industry, they have at least stopped digging.
In Canada, the picture is similar.
The Prairies – thanks to natural resources – are doing fine. In Quebec and the Maritimes, the picture is mixed, with some areas and large cities doing OK and some rural areas not. In Ontario, Ottawa is fine and even Windsor is coming back because of the auto industry recovery. But, and I’m going to get parochial here, the region in which I live is sinking. This area has the highest unemployment rate in Ontario at 10.9 per cent (EI Program Characteristics for the period of September 09, 2012 to October 06, 2012, Human Resources and Skills Development Canada, http://srv129.services.gc.ca/rbin/eng/rates_cur.aspx). This region is called Niagara by Statistics Canada, which is a misnomer. The region consists of the counties of Haldimand, Norfolk and Brant, one township from the Niagara Region and one from Elgin County.
It is a largely rural area that has/had a few large employers. One of the big employers (locally known as the Bick’s plant in Dunnville) recently shut down. Another, the gigantic coal-fired generating station at Nanticoke, has scaled back and is shutting down. Only a steel plant and an oil refinery remain.
Sadly, people and politicians living in this area thought they were in a 10-foot hole, had stopped digging and were looking for some ways out. But little did they know that others living in Toronto and the United States were, for business reasons, tunnelling underneath them and proceeding to drop them into a 100-foot bottle dungeon. The only saving grace is that retirees from Toronto and area have discovered the low housing prices.
Farmers know what can happen when you’re hit by forces beyond your control. Floods, droughts, political machinations and other events can wreak havoc, but sometimes you can recover on your own. Other times, you may need someone to give you a ladder, provide a rope or simply throw down some climbing gear. Once you’re out, you then set about filling the hole.
You do all this not out of a sense of charity, though that isn’t a bad reason; you do it because no one can know when they might fall or be pushed into a hole and need help getting out.
Senator Herb Sparrow knew about holes and about helping guide people out of them. Back in the 1980s, the farmer-rancher from North Battleford, Sask., saw the economic and agronomic hole farmers were digging for themselves with summerfallow and constant tillage and what was happening to the prairie soil. He saw that localized dust storms were returning and that nutrients were being sucked from the ground at an alarming rate. In response, he used his Senate office to put together a seminal report titled “Soil At Risk.”
It was and remains a classic.
The report played a huge role in changing what farmers thought and did, and influenced government actions for decades.
It is, in my mind, the most significant thing to come out of the Senate in the last 30 years. It also showed what one dedicated and determined senator could accomplish.
He showed Prairie farmers the hole they were digging themselves into. He used science and, in combination with his own considerable skills, showed them the way out. He rallied others to help with the transition to more efficient and effective farming techniques. He demonstrated how saving the soil would save farmers’ dollars and how it made financial sense.
Senator Herb Sparrow passed away on Sept. 6 at 82. Though not a tall man, he made a gigantic contribution to farming.
The Pullet Growers of Canada have come a long way in their quest to become the first commodity in more than two and a half decades to come under supply management. But, it is a long road and there are a few more miles to go.
In mid-July, the Pullet Growers of Canada (PGC) made their formal submission to the Farm Products Council of Canada (FPCC) to seek Part 2 status under the Farm Products Agencies Act. The FPCC formed a committee and the submission is expected to come before the full council at a meeting at the end of September.
“This has been a long time coming,” said Andy DeWeerd, the PGC Chair. “There hasn’t been a new commodity to come under supply management since 1986, so it’s new for everyone involved.”
In preparing their submission, the pullet growers spent two years consulting with pullet and egg producers across the country as well as provincial supervisory agencies to gather ideas, address all questions and concerns, and ensure all details were attended to.
DeWeerd added that he is confident the pullet growers have done their due diligence and is hopeful of a positive result at the council meeting.
Pullets were one of the components of the poultry industry that were not under supply management. DeWeerd said he understands that an attempt was made in the 1980s to get pullets under supply management, but it fell apart and he’s not sure why.
But once approval is received for pullet producers to form their own agency, “we will have the industry voice and price parity shared by the rest of the poultry industries,” he said.
“Being an autonomous agency will give PGC the required legal powers to make decisions on such issues as cost of production, disease control programs and housing standards, among many others,” said DeWeerd. “The time has come for the Canadian pullet industry to come into its own.”
At present, different provinces have different rules for such things as housing, HACCP and disease control.
The formal drive for a new federal agency began in 2010 when pullet growers from several provinces got together and decided they wanted supply management. At this point in time, it looks as if five provinces – Ontario, Quebec, Manitoba, Nova Scotia and New Brunswick, which represent about 80 per cent of national production – will be members from the start. But the agency is open to the other provinces and others may want to sign on once it is established, he said.
However, there are strict requirements for establishing a new supply-managed marketing agency.
The federal Farm Products Agencies Act says: “The Governor in Council (federal cabinet) may, by order, establish an agency with powers relating to any farm product or farm products the marketing of which in interprovincial and export trade is not regulated under the Canadian Dairy Commission Act if the Governor in Council is satisfied that a majority of the producers of the farm product or of each of the farm products in Canada is in favour of the establishment of an agency.”
In the legislation, a Part 2 agency is defined as a “marketing agency and it relates to “eggs and poultry, and any part of any such product.”
The agency will develop a marketing plan, which, under the legislation, means “a plan relating to the promotion, regulation and control of the marketing of any regulated product in interprovincial or export trade that includes provision for all or any of the following:
“The marketing of the regulated product on a basis that enables the agency that is implementing the plan to fix and determine the quantity, if any, in which the regulated product or any variety, class or grade thereof may be marketed in interprovincial or export trade by each person engaged in the marketing thereof and by all persons so engaged, and the price, time and place at which the regulated product or any variety, class or grade thereof may be so marketed.”
It continues, saying “a system for the licensing of persons engaged in the growing or production of the regulated product for, or the marketing thereof in, interprovincial or export trade, including provision for fees, other than fees related to the right to grow the regulated product, payable to the appropriate agency by any such person in respect of any licence issued to such person and for the cancellation or suspension of any such licence where a term or condition there of is not complied with, and the imposition and collection by the appropriate agency of levies or charges from persons engaged in the growing or production of the regulated product or the marketing thereof and for such purposes classifying those persons into groups and specifying the levies or charges, if any, payable by the members of each group.”
The pullet growers have also developed a draft Federal-Provincial Agreement. This describes the basis of the federal-provincial relationship on pullets, proposals of how the agreement might work and a quota methodology. A new agency would also be able to establish housing and disease control standards and more.
Once the Pullet Growers are under supply management, Canada’s 550 pullet growers will have the ability to recover their costs of production. DeWeerd said the growers are falling behind.
The organization has the support of the Egg Farmers of Canada and provincial egg organizations. And like other supply managed groups, the pullet growers will have provincial representation, as well as a national organization. To date provincial organizations have been formed in Ontario, Quebec, Manitoba and Nova Scotia.
At present Manitoba, Ontario and Nova Scotia pullet growers operate under their provincial egg marketing boards. Quebec growers recently became a stand-alone organization outside the province’s egg board.
The emergence of antibiotic resistance among bacterial pathogens has become one of the most challenging crises to face public health authorities in the past century, said Rebecca Irwin DVM, MSc. Irwin is the food program coordinator for the Antimicrobial Resistance Project at Health Canada, and spoke as part of a panel at the Poultry Health Conference in Kitchener.
Many human pathogens are demonstrating resistance to antibiotics. The challenge now is to understand more fully why it has happened, to stop the trend and to find out how to prevent future development of resistance.
And that is why, rightly according to some researchers and wrongly according to others, part of the focus has fallen on the livestock industry and its use of antibiotics.
Dr. Maurice Smith, a veterinarian and a second panel member, said the poultry industry has been wrongly accused.
In his presentation, Smith displayed a recent headline and said it is incorrect. The implication is that if antibiotic use in the livestock industry stopped then things would be better. “This is a fallacy,” he said. Antibiotic use in the poultry industry is low and dropping, he stated.
He also pointed to numerous examples of situations where resistant strains of bacteria have appeared in countries where those antibiotics are not used in the livestock industry.
“We are a prudent industry,” he said. He stressed that the poultry industry seldom uses antibiotics and only does so when it has to. And he said that they are used properly.
Layers Rarely Get Antibiotics
Most egg producing flocks have never been given antibiotics and while turkey flocks receive antibiotics at hatching, many weeks pass before processing when no drugs are used. Meanwhile, the broiler industry has achieved a seven per cent reduction in antibiotic use in the last five years because birds reach market weight half-a-day to one day earlier and as a result consume less medicated feed.
He also pointed out that there are a lot of unknowns surrounding the issue.
Irwin said some bacteria have developed the ability to survive in the presence of antibiotics by mutating and changing their genetic make-up. There are now multi-resistant foodborne bacteria, she said.
“It is now recognized that the genes which are responsible for the resistance can move between and among bacteria of the same or even different species,” she said.
However, it is important to recognize that antibiotics are vital medicines for the treatment of bacterial infections in animals as well as humans, she said.
They are important for sustainable livestock production and for the control of animal infections that could be passed on to humans.
It is also recognized that the use of antibiotics in livestock, fish and plant production varies from country to country. In some countries their use is lower than in others and the use of specific antibiotics in livestock production is banned in some countries but not others.
Some countries report that more than 50 per cent of their total output of antimicrobial compounds is used in agriculture. “Most are applied to food animals in subtherapeutic doses as growth promoters.”
But many other countries have restricted the use of antibiotics useful in human therapeutics from use in growth promotion, she said.
Meanwhile concern over antimicrobial resistance is worldwide and the World Health Organization (WHO) has convened two meetings in the past year to develop recommendations on the use of antimicrobials in food production.
The WHO is supporting the development of guidelines which promote the “usage of antimicrobials which maximizes therapeutic effects and minimizes the development of antimicrobial resistance,” she said.
The WHO has also recommended that the use of any antimicrobial agent for growth promotion in animals should be terminated if it is used in human therapeutics or known to select for cross-resistance to antimicrobials used in human medicine.
In Canada, Health Canada’s Food Directorate is taking a lead role in the development of strategies to control the emergence and spread of antimicrobial resistance from agriculture and food sources.
In June, Health Canada sponsored a stakeholder workshop to provide a forum for discussion of topics related to prudent use, surveillance and research. Next, Health Canada will form a steering committee made up of representatives from government (federal and provincial), industry, public health consumers, diagnostic laboratories and academia.
“There is a critical need to provide the scientific information which characterizes the link between antimicrobial use in animals and resistance in humans and to answer questions on how resistance may be transferred to humans via food or environmental exposures. Increased collaboration and linkage of industry and government studies will enhance our ability to answer some of these complex questions,” she said.
Dr. Bruce Kilmer, of the Canadian Animal Health Institute (a trade association representing the developers and distributors of pharmaceuticals, feed additives, biologicals and pesticides), said each new microbial is reviewed by Health Canada’s veterinary drug program to ensure it doesn’t pose a risk to human or animal safety, does as the label claims, and is manufactured under good manufacturing conditions.
12 Years To Develop
It takes 10-to-12 years to bring a new food animal product from discovery to the marketplace at a cost of about $250 million, he said.
Antibiotics are used in agriculture to: assure safe and wholesome food from healthy animals; reduce human exposure to zoonotic pathogens through direct contact with animals; promote the health and well being of animals; and reduce the cost of food production.
Antibiotic use also keeps the cost of food down. A 1998 National Academy of Sciences study estimated that banning the use of antibiotics in production would raise poultry, beef and fish costs to the public by $4.85 to $9.72 per person per year.
There is also a public misunderstanding between resistance and susceptibility. Resistance means the bacteria no longer responds to treatment with antimicrobials while susceptibility refers to the sensitivity of the bacteria to treatment with an antimicrobial.
“Generally references to resistance in the popular press really refer to the fact that the bacteria is less susceptible to an antimicrobial,” he said.
Benefits Of Use Being Studied
The industry is taking a number of steps to address concerns. It has prudent use guidelines and Georgetown University is conducting a study, “Risk Benefit Analysis of Antibiotic Use in Food Producing Animals.”
The study is evaluating:
- the risk of treatment failure of human infections due to foodborne zoonotic pathogens;
- the benefit of reduced incidence of human infections due to foodborne zoonotic pathogens;
- the benefit to the environment and;
- the benefit to the economy.
Quality Assurance Programs
Meanwhile, producer groups are developing quality assurance programs and proper use of medication is an important component.
Challenges facing the industry include: meeting World Health Organization calls to tighten up regulations so that Active
Pharmaceutical Ingredients (API) are not used in food-animal production; and providing timely access to safe new products.
To answer the WHO’s call, Canada needs to implement new legislation to prohibit the use of API’s and to ensure access to new products Canada must resolve operational and personnel problems at Health Canada’s veterinary drug approval program and deal with the growing lag time in the registration of new products, he said.
The bottom line in the discussion is that decisions must be based on sound science, he stated.
Ontario lost a large number of birds last summer to heat, Harry Huffman, an agricultural engineer who specializes in ventilation, told about 60 broiler producers at a seminar in Holmesville, Ont. sponsored by the Ontario Ministry of Agriculture and Food.
Southern Ontario had 46 days with temperatures over 30 degrees C, 13 days over 34 degrees and eight days over 35 degrees.
While there was little precipitation last summer there were a number of days with very high humidity, which increases the heat stress, he said.
“Heat stress is most severe when high temperatures are coupled with high humidity,” he said.
Environment Canada has developed a formula that combines the two factors to create a Humidex reading. These readings reflect the comfort level for people.
While no Humidex reading has been done for livestock, Huffman said, it’s safe to assume that animals will have somewhat similar degrees of discomfort with heat stress.
Humidex comfort levels on the chart are as follows: 29 or lower, no discomfort; 30 to 39, some discomfort; 40 to 45, great discomfort, avoid exertion; above 45, dangerous; and above 54, imminent heat stroke.
As long as the humidex is below 54, growers can do a number of things to reduce the severity of heat stress. Above that level, “it is quite likely some bird losses will occur regardless of housing management,” he said.
The first thing is not to overcrowd summer flocks.
Second, acclimatize the birds to possible heat stress at four weeks of age by allowing the barn temperature to rise for several hours. Research shows that short bouts of heat stress will help the birds survive future heat stress periods.
Third, increase the light level in the pen prior to operating large-diameter fans or opening tunnel ventilation doors. This will reduce the fear reaction and subsequent flight from the bright areas. This type of flight reaction has caused piling near the centre of the barn and suffocation.
Fourth, exhaust sufficient air in hot weather. Try to keep the barn within two degrees of the outside temperature and aim for a complete air change every minute.
Fifth, ensure that the air inlet has sufficient capacity to handle the fresh airflow. There should be at least 1.5 square feet of inlet opening for each 1,000 CFM of fan capacity and some insurance companies insist on two square feet for heat prostration coverage.
Sixth, verify proper air intake velocity with a static pressure gauge. In order to have good air movement it is important to have lower static pressure in summer. The usual range for summer, he said, is .03 to .06 inches while in cold weather the range will be .05 to .08 inches static pressure.
Seventh, if the static pressure is too high increase the fresh air openings. Ideally, this will be done by increasing the air inlet opening of the addition of more air inlets to enhance the airflow over the birds. Doors can be used, he advised, if they are only opened to the extent necessary to bring the static pressure down to the correct range. Opening too many doors will eliminate the vacuum and airflow will be less than required everywhere except directly in front of the openings.
Eighth, make sure the air is moving across the barn at bird level. This air movement is required to remove the heat from the bird as quickly as possible. Moving air at a reasonable speed around the birds’ heads and necks has the potential to reduce the perceived temperature by one to three degrees Celsius.
There are a number of ways to increase air movement at bird level, he said.
These include: a deflector board for a typical side air inlet; a new double side air inlet system; a second air inlet lower on the side wall; a second air inlet on the opposite side of the barn; tunnel ventilation; tunnel ventilation baffles to increase air speed; and internal air circulation fans.
Ninth, make sure the birds get plenty of cool water. Water consumption should double during hot weather.
Tenth, slowly walk the birds during periods of heat stress. This promotes air movement and releases the heat trapped under the birds, Huffman said. It also encourages the birds to move to the drinkers and allows you to more closely monitor the birds. However any bird activity generates more body heat and can increase heat stress. Therefore, this walking exercise may be best if done in the morning when it is usually cooler.
Eleventh, ensure that the attic is properly insulated and ventilated.
Twelve, any colour other than white will absorb significant solar heat. There can be significant attic heat reduction if the roof is painted white. In addition, there are now ceramic paints or coatings available, in a variety of colours that will reduce solar heating.
Thirteenth, if possible have the air inlet on the shady side of the building.
Fourteenth, talk to your feed company representative and veterinarian about feed withdrawal practices during periods of heat stress.
Fifteen, consider some form of evaporative cooling. Adding water vapour to the air is an excellent way to bring down air temperature, he said. Depending on the humidity levels evaporative cooling can reduce air temperatures anywhere from one to six degrees because the water vapour absorbs heat.
The impact can be dramatic. For example (referring to the Humidex chart), it can be seen that if one could bring the temperature down from 34 degrees to 30 degrees the Humidex would be in the safe zone even if the humidity rose from 80 to 85 per cent. Even at 90 per cent humidity the Humidex is 45.6 compared with 52 at 80 per cent humidity.
In summary, Huffman said there are a number of things that can be done to help your birds survive the heat, but they require planning and may involve some spending.
“Therefore, give the various options some thought over the winter and have your improvements in place prior to next summer’s heat wave,” he said.
The CEMA board of directors will meet in Ottawa July 22-23 to try and find a solution to a dispute over how to accommodate production of eggs for industrial processing and products that tied CEMA in knots at its June directors’ meeting in Charlottetown.
By the scheduled close of the board’s open June meeting nothing had been resolved and board Chairman Felix Destryker shelved other items on the agenda. “I don’t think we can continue this meeting (until this is resolved),” he said. There was no sense in dealing with a proposed name change, the schedule for future meetings or other business “when we might not have a system,” he said.
An extension of the meeting into Wednesday resulted in the establishment of a working group and scheduling the group to report, with recommendations, to the directors’ meeting in Ottawa. At the June meeting, it was proposed that a Manitoba “grow for” program,designed to produce eggs for the growing industrial market be accommodated as overbase quota.
That, however, was unacceptable to Manitoba and others and was eventually tabled by the board. Manitoba Director Frank Friesen said: “Back home we are on the hot seat.” He said that CEMA had seemingly approved “grow for” in March.
In discussions at home in Manitoba, he said we told politicians and others that “grow for” had been approved by CEMA. But we come back in June and are told that it isn’t settled and more time is needed.
If the program doesn’t go forward “we will be seen as going back on our word,” he said. “Call it a trial program. Let national negotiations proceed,” he said. “Surely we can accommodate this program on a trial basis until we have a national program,” he said.
From a Manitoba perspective a solution is essential because “some Manitoba say under supply management this will never happen,” he said.
Raymond Laplante of Quebec said if 10 provinces had agreed to the “grow for” program it would have been fine, but Quebec didn’t agree. Quebec doesn’t believe it is proper for producers to pay higher levies in support of a program from which they receive no benefit.
Because of its objections to the proposed “grow for” program Quebec has been withholding levy payments. Quebec’s share of national industrial product demand is about 3.5 per cent compared with 37 per cent in Ontario and 31.5 per cent in Manitoba. Alberta Director Charlie Van Arnam said the board had to find an answer. “I wonder what the producers back home would do if they knew how flippantly we play with their livelihood,” Van Arnam said.
Laplante said the March resolution was to define the process. Now, we need figures for the quota system. If people work in good faith the issue can be resolved quickly. Pieter Vanderpol, a CPEPC representative said: “What I heard last time was that we were going ahead. Now, we are going backwards with another trial program.”
There is demand for the production of one million birds right now, he said. In two years, it is projected to be 2.2 million. “If you could supply processors with 1.5 million boxes processors would buy them right now,” he said. “Processors need to know: Are we going to get eggs or are we not?” But Neil Currie said the Manitoba proposal was unclear.
In March, “the principal was approved but the numbers were subject to approval by the agency, but we haven’t seen hard numbers. What we’ve seen is that we would like to get a “grow for” program up and running sometime.”
“That’s not orderly marketing,” Currie said.
“We have not seen hard numbers. When will the placements take place, how many placements will be made, how will the production for processors fit in with our supply programs? We don’t have those details yet.
I would suggest that until we do know those details the numbers should not be approved and certainly not on an open-ended, uncertain basis. That’s what overbase quota and that’s what orderly marketing are all about,” he said.
Gordon Hunter, an egg producer from New Brunswick, got into the swing of things during a social gathering at the CEMA directors’ meeting in Charlottetown. (Photo by Linda Boxall, vice chair of the National Farm Products Marketing Council)
CEMA directors extended their June meeting in Charlottetown beyond the scheduled two days into a third day as they struggled to find a way to accommodate increased Manitoba production of eggs for industrial processing
If you are a grain producer, a grain user or a policy maker, it’s hard to think so far ahead, but it may be time to consider next year.
While more bad weather may still happen this year, much of the U.S. corn crop is already a weather-ravaged wreck and, with corn prices already in record territory, supplies heading into the next crop year will be tight.
The wheat supply situation will be better, but that provides little comfort because corn drives this bus. Feed wheat is being substituted for corn and if prices get high enough, wheat that could go for milling could end up in livestock rations.
Food prices are already reacting and the consensus is that North American food prices will rise about four per cent over the next 12 months. In more normal times, that would result in a shift in consumer consumption patterns. Consumers would go for less expensive cuts of meat, turn to less costly house brands and look for other ways to stabilize their spending.
But given high unemployment rates, stagnant incomes and rising gasoline prices many began doing that in 2008 and, given the painfully slow economic recovery across much of North America, have continued. In Europe, the situation is worse. And those are among the world’s richest places.
In poorer areas in Africa and elsewhere, the consequences of a spike in food prices is truly dire.
But as bad as that is, the world will likely struggle through. Next year is where the real risk lies. Stocks of grain and oilseeds will be tight before next year’s harvest and another crop disaster would be serious.
The U.S. Department of Agriculture (USDA) forecasts feed grain stocks at 19.2 million metric tonnes or seven per cent of total domestic use in the U.S at the start of the 2013/14 crop year. In comparison, stocks for the 2010/11 crop year stocks were 48.1 million metric tonnes or 16 per cent of total domestic use. Meanwhile soybean stocks are forecast to be about half what they were in 2010/11.
Prices have surged. The USDA forecasts an average farm price for corn of $7.50 to $8.90 a bushel and an average farm price for soybeans of $15 to $17 a bushel this year.
Worldwide corn stocks are expected to begin next crop year 10 per cent lower than at the start of this crop year and represent a 14 per cent decline of total worldwide domestic use. Meanwhile wheat stocks are expected to fall to 25 per cent from about 30 per cent and the USDA’s forecast for the average farm price for wheat is up more than 20 per cent over last year.
For many Canadian grain producers this adds up to a big year – a good or decent crop and good to great prices. For Canadian livestock producers, especially hog and cattle producers, it adds to their suffering. Poultry producers will get relief from their cost of production formulae, but face the question of how consumers will act when faced with higher prices.
The bottom line in all this is that grain stocks will be down entering next crop year. Another smaller-than-expected worldwide harvest will make the situation worse and pull stocks down to unsustainable levels and necessitate significant changes in how much grain is used.
One can only hope that doesn’t come to pass and that an above-average crop develops. If it does, we shouldn’t waste the opportunity to set some aside in a world grain bank to offset the damage from the next crop crisis, which may come sooner and more frequently than we might like.
James Hansen, director of NASA’s Goddard Institute, and his team have carried out an extensive and long-range study of climate change and found “extremes are actually becoming much more frequent and more intense worldwide.”
When the team plotted “the world’s changing temperatures on a bell curve, the extremes of unusually cool and, even more, the extremes of unusually hot are being altered, so they are becoming both more common and more severe.”
In effect, he wrote, the weather dice have been loaded. The likelihood of severe weather – especially hot weather – has increased and the likelihood of what would be considered normal weather has decreased.
In other words, the probabilities have shifted and Hansen attributes this to the actions of man. Even if you disagree with that attribution it is hard to disagree with the mathematics. Severe events are becoming more common and even if you conclude it is all part of nature, we should prepare.
One of the ways to prepare would be for the world to set aside part of the next bountiful harvest so that it’s available during the next disaster. This would moderate prices, which the grain producers who won the weather lottery might not like. But it would also raise prices in those years when everyone has a good crop, which livestock producers won’t like.
However, it would allow us to follow one of the oldest and wisest sayings: “Hope for the best, but prepare for the worst.”
The old line says that it is better to beg forgiveness than ask permission. But when you’re dealing with trillions of dollars in capital, hundreds of billions in potential profits and tens of millions in personal bonuses, that seems particularly true. International bankers certainly understood it. Knowing they were too big to fail and that governments had their backs no matter what happened, they played fast and loose with other people’s money.
There were the mortgage schemes, the bundling of financial assets that individually have the attractiveness of week-old garbage but were peddled as golden, as well as bets on derivatives, interest rates, stocks, bonds and commodities. One writer for The Guardian compared it to an unlicensed casino where every game is rigged and there are no effective rules or laws. And the worst that could happen if they were caught would be millions in fines that would take just a tiny bite from the billions in profits.
All of this is well known. The great international recession that began in 2008 and still continues to this day was financial in its origins. In the U.S., Ireland, Iceland, Britain, Spain and elsewhere, it began with the banks and other financial institutions. When loans that never should have been made went bad and bets went against them, they turned to governments that touted deregulation and the sanctity of free enterprise for billions in bailouts.
What the public didn’t know until this summer was that the schemes didn’t end with playing fast and loose and not acknowledging or recognizing the risks of the bets.
The latest and likely not the last scheme to be revealed reached all the way down to a financial fundamental. Major international banks played with what is known as the LIBOR rate for their own benefit.
The LIBOR rate is the rate at which international banks make unsecured loans to one another. It is, in effect, the base rate. Other loans – mortgages, car loans and lines of credit – are based to one degree or another on LIBOR. It is estimated that LIBOR affects $500 trillion, give or take a few trillion, in transactions.
By gaming that system they could affect everything. If derivatives, unsound mortgages and other strange financial instruments were a financial system on steroids, it goes even further. It is as if a high jumper had the ability to adjust gravity for his benefit and to the detriment of competitors.
What makes the whole thing particularly smelly is that it occurred in London and is in part the result of persistent lobbying by the banks to be freed from the shackles of regulation. They succeeded: self-regulation was designed to free the banks from red tape in the name of profits and free enterprise was the rule. And the world has seen the consequences.
Governments put the fox in charge of the henhouse and seem surprised at the result.
The Economist magazine – hardly a bastion of the left – weighed in with an editorial early this summer simply headlined “Banksters.”
“Yet despite the risks of banker-bashing, a clean-up is in order, for the banking industry’s credibility is shot,” they wrote.
The New York Times quoted George E. Barnett, professor of law and finance at the University of San Diego School of Law: “I wish I could say I’m shocked, because it is shocking. But regulators have not been particularly effective or aggressive in the past two decades of finance.”
And it is not as if regulators didn’t know the game was rigged.
In 2008, officials at the New York Federal Reserve wrote in an internal memo that banks appeared to be understating the interest rates they would pay. “Our contacts at LIBOR contributing banks have indicated a tendency to underreport actual borrowing costs,” they wrote. But, they were a little late to the game.
Traders with London-based Barclays Bank were trying to manipulate LIBOR and another benchmark rates to enhance their trading profits at least as early as 2005.
But even after regulators became aware of the schemes, they worried that dragging a major bank (or banks) into court would shake confidence in the international financial system and result in chaos. But by not acting they got much more.
The biggest banks were saved, but the U.S. mortgage crisis still drags on and a growing number of municipalities are declaring bankruptcy. In much of Europe, unemployment is chronic and nations are at the brink. Canada, thankfully, is in better shape but not immune.
Millionaire bankers – or banksters – are not popular. Confidence in international finance has been shattered. But the buck, while it may go into their pockets, doesn’t stop with the bankers.
Deborah Orr, writing in the Guardian, put responsibility at the feet of politicians.
“The crisis, however, has not been in finance…. Global Governmental Crisis would be a more apposite title for this ongoing chaos. And the political chaos is simply a consequence of political failure to fully acknowledge what went wrong with banking, and determinedly set about fixing it.”
She is right. Politicians must stop fearing the possible consequences of tough banking regulation and look at what weak regulation has wrought. The system is broken; it’s time to rebuild it.
It seems to be official – Doha is done. Federal Trade Minister Ed Fast said recently that a new WTO trade deal is unlikely for some years and that Canada must focus on new bilateral or regional trade deals.
One of the new deals involves the ongoing negotiations with the EU, and the talks seem to be progressing. Another involves Canada’s attempt to expand the Trans-Pacific Partnership (TPP).
The United States is actively engaged in joining the TPP, and Canada has decided to tag along. Mexico also plans to enter the negotiations, but Japan remains on the outside looking in.
Japan doesn’t seem particularly put out by this, as it is involved in a much more interesting third set of regional talks.
These involve China and South Korea, and after being rebuffed by the TPP, Japan has signed on as a third party.
We can expect to see a lot of headlines in Canadian newspapers and reports from a variety of think tanks about the TPP. But compared to the discussions between China, South Korea and Japan, the TPP – even with the U.S. involvement – is the minor leagues.
The U.S is the world’s largest economy, but we have a trade deal with it. Meanwhile, others in the TPP club include the 13th largest economy, Australia, along with number 39 Chile, number 55 New Zealand, and a several other small players. Canada is number 10.
The other talks involve number two China, number three Japan, and South Korea at number 15. In total combined GDP, the Asian three are more significant than the TPP. They are also much more interesting in terms of trade than the TPP because they need what we have.
China, Japan and South Korea are already large markets for Canada’s agricultural products, as well as for oil minerals, fertilizer, lumber and other natural resource exports that are expected to rise. And Canadian aerospace, rail, technology and financial services would benefit from freer trade, particularly with China.
South Korean and Japanese manufacturing companies have already invested in Canada creating tens of thousands of jobs. Therefore, it would be a welcome development if freer trade encouraged more of that, especially when the current economic struggles of Europe and the United States are taken into consideration.
A bonus for Canadian poultry producers is that none of the Asian three is likely to export dairy or poultry to Canada, so supply management would be a non-issue.
This would be a welcome relief after listening to lectures from officials from New Zealand, Australia and the United States.
It might even mute some of the Canadian critics who complained that Canada’s defence of supply management was jeopardizing Doha. That was not true, as Doha was doomed by much bigger disputes, mostly involving the United States.
Supply management may have been a big deal in Ottawa’s think tanks and Toronto’s editorial offices, but it barely ranked as a sideshow in Geneva.
Minister Fast, speaking at a business luncheon put on by the Canadian Chamber of Commerce, said that in addition to trying to join talks at the TPP, the government wants to open markets in China, Japan, India and Brazil. He has signed up a panel of experts to advise him on the next phase of the government’s global commerce strategy.
The panel members are: Murad Al-Katib, president and chief executive officer of Alliance Grain Traders Inc.; Paul Reynolds, Canaccord Financial Inc; Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance; Perrin Beatty, Canadian Chamber of Commerce; John Manley, Canadian Council of Chief Executives; Catherine Swift, Canadian Federation of Independent Business; Jayson Myers, Canadian Manufacturers & Exporters; Brian Ferguson, Cenovus Energy Inc; Serge Godin, CGI Group Inc.; and Indira Samarasekera, president of the University of Alberta.
All the panelists are likely to encourage the government to get into the TPP, but it would be more interesting if they suggested the government look at joining talks with Japan, China and South Korea. If it went forward, it would be a huge trade deal of great significance and much bigger than the TPP. It would also be fascinating to see the reaction in the United States and from other TPP participants to a trade agreement with China and South Korea.
The government and the new panel of experts should look beyond a club that only reluctantly allowed Canada to try to join and consider attempting to join a bigger and better community that is in the process of being formed. Getting into the bigger club won’t be easy, but it is certainly worth the effort.
And if the effort paid off, it’s likely Australia, New Zealand and the United States would busy themselves trying to figure out how to join and accommodate us. That would be much better than bending over backwards to accommodate them at the TPP.
Bill Mailloux sits in the sunroom of his farmhouse and quietly lays out the philosophy that has the family farm entering its sixth and seventh generation. “Better, not bigger,” he says.
The farm outside of Amherstburg, Ontario, south of Windsor, is a true family operation that boasts a manageable mix of grain and turkeys with a seed business added on. Bill is a partner in the operation with his cousin Leonard, who together bought out their fathers in the late 1990s. This is also a family tradition – as Bill’s father Eugene and his uncle were partners, and it is continuing with Bill’s son Josh and cousin Chad, who are fully engaged in the day-to-day operations and planning.
Bill has also followed another family tradition and taken a leadership role as vice-chair of the Turkey Farmers of Canada. His father was instrumental in the founding of supply management for turkeys and was chair of the agency in 1976.
Working with his father and listening to the stories and history provided Bill with an insight and depth of understanding of supply management that is hard to match. For example, his father told him of an episode prior to supply management when a processing company offered his father $0.19 cents a pound for his turkeys. That didn’t seem reasonable, so the father contacted other companies and asked about prices, and was told $0.19 cents a pound. One day a man in a suit drove out to the farm, pulled into the farmyard in his Cadillac and offered to buy the turkeys. The price was the same.
Eugene decided to have the birds custom killed and stored, then sold them the next spring for $0.59 cents a pound.
Eugene also passed along a big book that contained the record of the cross-country hearings that preceded supply management. It drove home the recognition that the farmers who originated supply management faced real and seemingly insurmountable challenges. They overcame the issues by working together, compromising when necessary and recognizing that strict adherence to personal or provincial self-interest could end the initiative and doom them all.
Bill said that today’s challenges are real and significant. For example, the continuing consolidation at the processor and retail levels presents a challenge. But “processors are our partners and we have to recognize their challenges,” he said. There are also challenges at the retail level, not the least of which is the continued attention paid to production practices on the farm.
Consumers need to know that we’re looking after welfare and that we’re audited to ensure we meet standards, he said. But that isn’t a story that’s told very often. He added, “poor operators don’t belong in our business,” because that not only affects those operators but also can hurt everyone else.
But these challenges, significant as they are, pale in comparison to those faced a generation ago. Bill said he learned that sometimes everyone has to compromise and give a little to gain or maintain a lot. “It’s a privilege to have what we have.”
Looking to the future, he sees a huge challenge looming that will challenge not just farmers, but also he world as a whole: feeding the world.
Farmers, scientists, politicians and agriculture companies are going to have to meet that challenge. What this means is that continued research into new and better crops, better farm management, continued livestock improvement and more co-operation throughout the food chain will be needed. It will also require co-operation on an international scale, because confrontation over food is not beneficial to anyone.
Bill also sees a real opportunity for turkey as a healthy food. “It is an opportunity we really need to tap into. We can increase the market by focusing on turkey as healthy,” he said.
This plays out on his own farm with his “better, not bigger,” philosophy.
The farm produces 6,000 poults four times a year and hasn’t increased its quota holdings for years, but by adopting and adapting new production techniques and technologies, it has dramatically improved its productivity. They continue to use barns first built in the 1950s, but the technology inside is up to date, said Bill. “We have no plans to expand, but continue to upgrade,” he said.
Careful management and some good fortune has also made for birds with few, if any, disease challenges, meaning medication hasn’t been needed in years.
The grain side of the farm is 850 acres of wheat, corn and soybean production that hasn’t changed in years and he said that there is no temptation to get bigger. As to the recent run-up in land values and quota values, Bill said that he and everyone else are aware of it, but that it has no effect on their own farm. Land and quota values are important only if you are buying or selling. For a multigenerational farm operating under a better, not bigger, philosophy, capital values are interesting but not that important.
Because it is a family farm in the truest sense of the phrase, Bill said they might be “a little more cautious.” For example, although Bill is just 51 years old and Leonard 52, there is a succession plan in place. “This is the smartest thing I ever did. Everyone should have one,” he said, as it provides a lot of peace of mind.
Bill says that he still thoroughly enjoys farming, even though it has changed quite a bit over the decades with the introduction of new equipment and technology. “It used to be much more physical.”
Farming can also present a variety of challenges from many different directions including dealing with whatever Mother Nature decides to throw at you. “You learn to deal with the weather,” he said. There are also the mechanical breakdowns and the unexpected loss of electricity.
“You learn to fix those things. It’s rewarding when you can fix something.”
In her last speech as chair of the Egg Farmers of Ontario (EFO), Carolynne Griffith said, “I am proud to be an egg farmer of Ontario.”
After a decade at the helm of the organization and 17 years on the board of directors Griffith commented, “It’s been a great, fulfilling and rewarding journey.”
Deciding to leave the board was not easy. But it was time. It is, she said: “A day of sweet sorrow for me.”
She thanked Ontario’s egg farmers, the EFO staff and the EFO board of directors for their help and support. “Thank you for the many opportunities you have afforded me.”
She also made special mention of her late husband Arthur, who encouraged her first to run for the board and then supported her through her years as a director and chair.
Griffith, an egg farmer from Alviston, Ont., first joined the board in 1995 and has held the position of chair since 2002.
During her tenure she said there were many challenges, not the least of which are the ongoing talks at the WTO. Griffith took on the protection of supply management as both a professional and personal challenge. A friend said, jokingly, that in recent years Griffith had been to meetings of the WTO in Geneva so often that she likely knows the streets of Geneva as well as she knows the streets of her hometown of Petrolia, Ont.
Griffith said that the struggle to preserve supply management is not over. While both the prime minister and the federal agriculture minister have been unwavering in their support, supply management continues to be under attack at the WTO and in the press.
While the threat from the WTO appears to have receded in recent months she cautioned that the trade talks are only “in hibernation, but not dead” and could reawaken after the U.S. elections and after Europe deals with its economic crisis.
In the past year, supply management was under near constant attack from some journalists who have made it “their life’s work to tear down what we have built over the last 40 years.”
Those critics are not going to go away so egg farmers and others in the supply-managed sector must remain vigilant and remain ready to counter the assertions. One way to deal with the critics is to connect directly with consumers. For consumers to trust you they must know you and that is at the heart of EFO’s award-winning “Who Made Your Eggs Today?” campaign.
Introducing the public to egg farmers builds a connection. It brings human faces to the forefront and makes eggs more than just a commodity. “This has been one of the most memorable achievements during my tenure,” she said.
“We have a great story to tell and only we, because of our experience, can tell it,” she said.
Egg farmers now connect with consumers at a personal level and they are doing it in ways that even 15 years ago couldn’t have been imagined, she noted. When she first joined the board no one had a cellphone and few if any of the directors even had a fax machine. Today cellphones, smartphones and more are essential tools, and not just for communicating with each other. The EFO carries out its campaigns across a host of different platforms including social networks, Twitter, e-mail, its website as well as the more traditional television, newspaper and magazine ads.
Griffith said an egg farmer’s goal is to produce the best eggs for consumers, and consumers should be told that in a way that connects them to the producer and that assures them egg farmers and consumers have shared values. The “Who Made Your Eggs Today?” campaign is doing just that.
Griffith said her late husband showed her early on that being a farmer is something to be proud of – you’re never “just a farmer.” It is not just an honourable career; it is an essential one. Producing healthy food and being appropriately rewarded is something to be proud of and, if necessary, it is something worth fighting for even if that means taking on journalists and the WTO.
The EFO thanked Griffith for her years of service by presenting her with a painting of one of the favourite spots she shared with Arthur and erecting a “Thank you, Carolynne” billboard in Petrolia.
The headlines were all too similar. Farmers were, on average, getting older and had never been older.
This came out of Statistics Canada, which reported in the 2011 Census of Agriculture that the average age of a Canadian farmer is 54 years.
The Globe and Mail led off its report saying, “Canadian farmers have never been older, raising questions over who will produce the country’s food in the coming decades.”
Many reports noted that the rise of grey power has been a cause of concern for a decade, with the average age rising from 49.9 in 2001. Almost half of all farmers are now 55 or older. In 2001 that number was fewer than 41 per cent, and less than 10 per cent of farmers – 8.2 per cent to be exact – were under the age of 35.
Along with aging, the number of farmers is also shrinking as farms get larger. There are now just 294,000 farmers out there, 10 per cent fewer than five years ago, and almost three-quarters of them are male. In fact, the average size of Canadian farms increased 6.9 per cent between 2006 and 2011, from 728 acres to 778 acres. In Saskatchewan, the average farm size jumped 15.1 per cent to 1,668 acres, the largest increase in the country.
The increase in size is reflected not only in the number of acres but also in cash receipts. For example, there are 3,298 farms with cash receipts of more than $2 million. This is up from 2,700 farms in 2006 or an increase of 22 per cent. In 2011, 6,304 farms had cash receipts of more than $1 million, but less than $2 million. In 2006 there were 4,614 farms in that class. Meanwhile the number of farms in the middle fell dramatically. The percentage of farms with receipts of $100,000 to $250,000 fell 21.6 per cent and the percentage of farms with receipts of $250,000 to $500,000 was down 10.6 per cent.
According to the 2011 Census of Agriculture, the 9,602 farms with $1 million or more in gross farm receipts accounted for almost half of the gross receipts for the entire sector. In other words, fewer than five per cent of farms generated almost 50 per cent of the receipts. In 2005, 3.2 per cent of the farms had receipts over $1 million and accounted for 42.8 per cent of receipts (at 2010 constant prices).
Looking at poultry and egg farms, gross receipts increased by 9.8 per cent during the five years from 2005 to 2010 to $4.0 billion, while the number of poultry and egg farms fell by 2.1 per cent.
Also, it is official that 2005 to 2010 was a terrible time to be a hog farmer. Gross farm receipts for hog and pig farms fell 33.2 per cent (at 2010 constant prices). Statistics Canada says hog farms represented 1.7 per cent of all Canadian farms and reported 8.1 per cent of all gross farm receipts in 2010, down from 2.6 and 12.5 per cent in 2005.
Statistics Canada’s agriculture balance sheet shows that for poultry and egg farms, the average total assets of $4.9 million are up 37 per cent from 2005. The bulk of the assets – $4.6 million – are long-term assets. Meanwhile, total liabilities (long- and short-term) are just over $1 million. The result is, on average, a net worth of $3.88 million.
For the sake of comparison, dairy farms have an average net worth of $2.66 million, while beef and grain farms show an average worth of $1.16 million and $1.65 million respectively.
For Canadians in 2005, the median assets of families were $229,930 and the median debt was $44,500. Their median net worth was $148,350, according to Human Resources and Skills Development Canada. In 2005, the principal residence and other real estate represented 42 per cent of the total assets of all Canadian families.
Not surprisingly, median family net worth peaked at $407,417 where the family head was between the ages of 55 and 64. After age 65, net worth declines as people tap assets to pay for retirement.
What does all this add up to? Well, the average farmer is getting older (but aren’t we all?) and there are fewer of them. With the exception of beef and hog farmers, farmers are doing fine and poultry farmers are doing extremely well when compared to the average farmer and Canadian.
But there are challenges.
The age thing will take care of itself. The shift to fewer and bigger farms looks to be continuing. For poultry, the constantly rising average value of fixed assets – $4.6 million – is daunting. A decade ago I thought poultry was experiencing an asset bubble, but I was wrong, as the 37 per cent increase in the last five years shows. Today with the average poultry and egg farm worth almost $5 million and much of that in quota value, I don’t know what to think. Perhaps supply and demand – limited supply of quota and strong demand – will continue to pull quota prices and values upwards. Or maybe quota values will plateau. But to figure out what will happen you need a better crystal ball than I have.