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Feathers Flying

Processing chickens in the Maritimes is causing conflict between provinces


February 24, 2010
By Dan Woolley

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The feathers are flying in the Maritime poultry processing industry with its latest upheavals.

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ACA’s New Minas facility will now only handle slaughter, evisceration and chilling before shipping out of province to New Brunswick-based Nadeau for further processing. Photo by Carroll McCormick


 

The feathers are flying in the Maritime poultry processing industry with its latest upheavals.

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The New Brunswick government recently announced its intention to require all live birds in the province to be processed within New Brunswick, which, since there is only one provincial poultry processor, would compel New Brunswick poultry producers to ship to Nadeau Poultry Farms, owned by Maple Lodge Farms in St. Francois de Madawaska, N.B.

In Nova Scotia, ACA Co-operative Ltd. early in December announced a second round of production cutbacks and layoffs this year at its New Minas processing plant in the Annapolis Valley. Henceforth, the ACA New Minas facility will only kill, eviscerate and chill poultry carcasses before shipping them for final processing and packaging at Nadeau’s plant in Northwestern New Brunswick.

Last September Nadeau had to lay off 175 of its 352 workers when Groupe Westco, its largest supplier of chicken, began shipping its birds temporarily to Olymel in Quebec for processing until it builds its own $30-million processing plant in partnership with Olymel in Clair, near St. Francois de Madawaska.

Nadeau had tried to find an alternative chicken source in  Central Canada when it lost 80 per cent of its input from Groupe Westco. The chicken marketing boards of Quebec and Ontario, however, thwarted Nadeau’s plans by imposing a cap on increased chicken exports from their provinces.

The New Brunswick government then responded with Bill 81 which restricts the movement of live birds within the province to in-province processing.

    
 

What is Bill 81?


Bill 81 is an act to amend the Natural Products Act of New Brunswick, which would allow the Minister to designate the plants where chicken may be processed in the province.

The New Brunswick legislature passed the poultry processing law in June 2009, but the cabinet never put it into effect.  In December 2009 Agriculture Minister Ronald Ouellette said that he intended to enact Bill 81, a move he deemed necessary as Quebec-based Groupe Westco moved to buy N.B. chickens and have them processed outside of the province.

The agriculture minister said in June 2009 when the legislation was first introduced that he was concerned Westco's actions could drive the existing Nadeau plant out of business, and that the legislation would allow for a cooling-off period between the companies.
Last year both the Competition Bureau of Canada and the New Brunswick Court of Appeal refused to block the export of N.B. chickens to Westco's Quebec plant.

  
    

Canadian Poultry and Egg Processors Council (CPEPC) President Council Robin Horel felt “conflicted “ about the dispute between Nadeau and Group Westco as all parties in the issue, Nadeau and Maple Lodge. Groupe Westco and Olymel, are CPEPC members.

Horel also admitted: “I am very concerned about the increase in live product that is moving between the provinces.”

He has three objections to the long-distance interprovincial trucking of live birds: “It doesn’t add value to the supply chain…there is a potential animal health concern,” and, “the carbon footprint.”

Horel declared; “Anything that alleviates the interprovincial movement of birds and leaves all the parties content would be desirable,” then conceding, “I don’t know if that is possible.”

Tim Ansems, chairman of the Chicken Farmers of Nova Scotia, represent growers who currently ship chickens to both Nadeau and ACA.

As to the new layoff of a further 110 ACA employees, Ansems commented: “It is unfortunate the processor has to cut jobs to sustain itself. In the meantime, we are working as all producers on a processing plant we will have joint ownership with Maple Lodge Farms.”

Purchase and conversion of ACA’s Eastern Protein Foods’ plant in Kentville, shut down early this year with the loss of 300 jobs there and the New Minas facility, has been mentioned as an option. Ansems stressed it is just one of several options, although the preferred one, now under review by an engineering study commissioned by the Chicken and Turkey Growers of Nova Scotia Industry Strategic Planning Committee. That study, once it is completed early in 2010, will be presented to a growers meeting and a decision made at that time on proceeding with the Maple Lodge joint venture.

Ansems is not concerned with Ontario-based Maple Lodge’s strengthening position in Maritime regional poultry processing as all poultry producers in Nova Scotia, the 82 chicken farmers and the 20 turkey growers could be involved in the plant projects holding 50 per cent of the joint venture’s shares.
“We are looking at a Nova Scotia solution and the solution at this time is to have a joint venture.

“I, as the chairman, and my board have a responsibility to look at Nova Scotia first. It is a tough business; but we have light at the end of the tunnel.”

Nova Scotia Minister of Agriculture Minister, John MacDonell, felt he should not, as minister, restrict the out of province transport of Nova Scotia poultry.
“Our producers need that ability to send them out of province.”

Although he wants Nova Scotia produced birds ultimately processed in the province; “we wouldn’t be thinking of restricting the flow of birds when there isn’t adequate processing.”

As for Nadeau’s owner, Maple Lodge also being involved in the proposed Nova Scotia joint venture, MacDonell stated: “I don’t know if I have any reason to have any negative thoughts on that.”

Without access to processing (ACA having stated its intent to eventually exit processing), it would be Nova Scotia poultry producers who could suffer the most, the minister said.

He saw only two options for the producers: enter the joint venture with Maple Lodge or go it alone and build their own processing plant.

MacDonell believed that access to market is essential to sustain their industry and a joint venture with Maple Lodge offers them that, adding, “I am willing to take the producers lead on that.”

He also understood New Brunswick’s reason for passing Bill 81 and said, “I don’t see it impacting our industry now, or in the future.”


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