Richard Molenaar wouldn’t have even considered becoming an egg farmer without free quota.
“If we weren’t accepted for the New Entrant Program, we wouldn’t be doing it. I know that for a fact,” said Molenaar, who farms near Grande Prairie with wife Mandy and his parents.
“Unless you’re born into an egg farm, you’re probably not going to be able to get started because of the burden of the cost of quota.”
Launched by the Egg Farmers of Alberta last year, the program sets aside five per cent of new quota allocation specifically for new entrants. New producers get free quota for up to 1,500 birds and are allowed up to two years to begin production.
The program addresses one of the “biggest barriers” to entering the egg industry, said Christina Robinson, producer services manager for Egg Farmers of Alberta.
“Quota can be very difficult to find, and it can be very expensive,” said Robinson. “With the New Entrant Program providing the quota at essentially no cost to the producer, that really takes away that financial burden.”
The program generated an immediate and huge response.
“The applications were open for two months — from May to June — last year, and we got over 40 applications from people who are interested in accessing quota through the program,” she said. “In the end, we had enough quota for seven new entrants.”
To be eligible, producers must meet a number of criteria, including having facilities for the birds and experience working in agriculture. Otherwise, the learning curve would be too steep, said Robinson.
“It’s not just as easy as flipping a switch — they have to get a barn in place and learn a lot about industry standards,” she said. “To come into the agriculture industry really fresh would make it really challenging for them.”
Egg Farmers of Alberta has been hosting workshops and sharing resources with the seven new entrants from last year’s program to bring them up to speed, she said.
“There is a lot to learn. It’s surprising for a lot of people to learn how much is involved in raising a chicken.”
The Molenaars can attest to that.
Even though they grow grain and have raised pigs in the past, learning the ins and outs of the egg business has been a challenge.
“It’s required a lot more effort than we initially thought it would take,” said Molenaar. “There’s a lot more regulations than we were familiar with.”
When he applied, Molenaar didn’t realize the industry was shifting toward enhanced laying cages. And while he “would have applied anyway” had he known, the equipment he needs isn’t yet widely used in Canadian egg production.
“It’s very new. Some are changing to this free-run system, but very few have,” he said.
He’s ordered a Combi system from Germany that combines both enhanced cages and free-run space — one of only a few such systems in Canada so far.
“The biggest challenge we had was trying to find a system that we liked and that would work,” said Molenaar. “We’ve ordered the system, and we like it, but we don’t know if it will work yet. We’ll find out in a year from now.”
The Molenaars will be converting an old hog barn this summer between seeding and harvest, with production expected to begin in November.
“With barn renovations and equipment costs, we’re expecting to spend between $170,000 and $200,000,” he said. “If we had to buy the quota on top of that, it wouldn’t be viable. With just buying the equipment, it’s going to be tough enough to make a decent profit at it.”
The investment will pay off for the couple — eventually, said Robinson.
“If you’re in production for about 15 years, the cost of your facility will be covered by your egg production,” she said.
That’s part of the reason the Molenaars are already thinking about expanding.
“I think once it’s going, it will be OK, but if it had to pay for itself, I think it would be a very long and painful payback,” said Molenaar. “There’s a fairly narrow margin, and volume is where it’s at. That’s why we’ve got to expand.”
But expansion comes with its own problems.
“We’re hoping to lease quota and double that to 3,000. If it goes well, we can expand the system and probably go to 4,000,” he said.
“We’re hoping to grow into it, but one of the biggest challenges we’re actually finding is trying to get our hands on quota. A lot of it is not what you know, it’s who you know.”
Bringing in new producers is key to having a vibrant egg industry, said Robinson.
“I think it’s really important in agriculture, where we’re seeing that farms are getting bigger and there are less farmers, to keep encouraging new producers to enter the industry and bring new ideas and new energy.”
Applications for the 2015 New Entrant Program will be available on the Egg Farmers of Alberta website between May 1 and June 25.