Two markets Differences in fresh versus processed distribution affect how market share is distributed
Alberta’s growing population means a growing demand for chicken, but the province’s producers have been turned down in past attempts the request to supply it here.
Alberta Chicken Producers (ACP) is part of the national supply management system administered by Chicken Farmers of Canada (CFC). ACP chair Erna Ference, a producer from Black Diamond, says Alberta producers continue to support the system.
“We think supply management works really well for us and we’re proud to be part of that system,” she said. However, since 2008, ACP has been in talks with CFC to increase its allocation. It was adjusted in 2000, but since then some of the other provinces, including B.C., Saskatchewan and Manitoba, have been given additional allocation. Alberta was denied an increase to its allocation by CFC in 2009.
“There was an expression at that time from some of the provinces that they didn’t want to change the agreement to allow for specific changes in terms of population,” said Ference.
ACP then spoke to the Alberta government to pursue an “exceptional circumstance” request for additional allocation, but the request was turned down in March 2012 at the CFC annual meeting.
CFC executive director Mike Dungate said that population is not the only criterion for determining quota allocation.
“Our job is not to produce chicken in Alberta, per se, but to make sure that we’re providing to consumers in Alberta the chicken that they want and demand,” he said.
Dungate said the allocation is in part determined by the need to supply two primary markets — fresh and processed. The processed market, which includes processors such as Lilydale, is served by regional or national contracts. Many national companies, such as McDonald’s, are supplied by one processor. “Instead of someone selling to Safeway in Alberta or in Saskatchewan, one processor serves Safeway right across Western Canada,” he said.
Fresh chicken must be produced closer to consumption, Dungate said. “In order to put fresh chicken on shelves in Western Canada, we can’t really service it out of Atlantic Canada or Central Canada. The transportation distance is too long, and so the shelf life is too short when it gets on the shelf in Western Canada.”
Dungate doesn’t see the quota as something that should be allocated by the province, but as something that is required to service appropriate markets.
“We need to make sure there’s enough supply in Western Canada to supply all the customers in the fresh market in Western Canada.”
Dungate said the CFC wants to be as efficient as possible about producing chicken, while maintaining production in all 10 provinces. They recently presented a proposal to the board that recommends that future allocations will be based 75 per cent on current production, and 25 per cent on population.
This proposal was discussed at the end of May. Dungate expects a decision about the new system for the entire country should be in place and operational by the end of 2012.