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Did supply management help Canada sidestep the ongoing bird flu crisis? Experts are divided

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Canada’s egg industry appears to be quietly avoiding widespread shortages and price spikes affecting other countries, and some say it’s grateful for supply controls.

This system of controlling egg, poultry and dairy supplies, imports and farm prices is often criticized for benefiting Canadian farmers at the expense of consumers. Critics blame supply controls whenever Canadian egg and milk prices exceed those south of the border.

But as disease, climate change and geopolitical instability threaten the world’s food supply, proponents say the benefits of managing supplies are becoming increasingly apparent.

“We have a Canadian-made system, and this is the food security of Canada,” said Bruce Muirhead, a professor of history at the University of Waterloo and former research chair of the Egg Farmers of Canada. has never been more important to

“At a time when eggs are scarce all over the world, we can keep family farms alive and stock store shelves with eggs.”

Bird flu impacted supply

Canada is not immune to conditions affecting egg prices and supplies in other countries.

Bird flu, or bird flu, labor shortages, supply chain problems, and soaring feed, fuel and packaging costs have all impacted egg production and processing costs in Canada over the past year.

According to Statistics Canada, December egg prices are up 16.5% year-on-year, with 12 eggs now costing $3.75 compared to about $3.25 last year.

While this is a significant increase, it is small compared to the skyrocketing costs recorded in other countries.

For example, in the United States, the US Department of Agriculture announced that egg prices in December increased 59.9% year-on-year.

In states such as Arizona, California, Nevada and Florida, the price of a carton of eggs has exceeded $6 a dozen in recent weeks, and about $8 in Canada. Stores in some regions are rationing eggs to avoid empty shelves amid potential supply chain issues and shortages.

The situation in the United States has sparked accusations of alleged price collusion among the country’s top egg producers.

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The world’s bird populations have been devastated by a deadly strain of avian flu, wiping out poultry flocks and killing wild birds. Some researchers have warned that the virus could eventually become more infectious to humans and cause future pandemics.

In the UK, major supermarkets Tesco, Asda and Lidl have also put limits on the number of eggs customers can buy, with some egg farmers saying they are no longer profitable. Egg prices in December rose 28.9% year-on-year, Britain’s Office for National Statistics reported.

New Zealand is also experiencing a nationwide egg shortage, with some store shelves left bare and some consumers rushing to buy backyard chickens. In an email, it said the country’s egg prices in December 2022 were up 28.8% compared to December 2021.

Canadian eggs are ‘too expensive to begin with’

But critics say prices in Canada have not risen as dramatically as in other countries. The simple reason is that it was originally expensive.

“When prices are already among the highest in the world, it’s no surprise that prices in our country haven’t risen as much,” said Christor Wittevrongel, a senior policy analyst at the Montreal Institute of Economic Research. rice field.

“It’s easy to maintain price stability if you have huge, overly high prices to begin with.”

The provincial egg sales commission shows that Canadian egg prices are starting to fall.

A farmer collecting eggs on an Australian farm.
A farmer collecting eggs on an Australian farm. Unlike Canada, where the supply of eggs is limited and restricted, other countries, partly due to bird flu outbreaks, are experiencing severe shortages of eggs. (Brendon Thorne/Bloomberg)

For example, an Ontario egg farmer has reduced the price a farmer receives for 12 eggs by 14 cents as of January 29th. It’s unclear if processors and retailers will pass the savings on to consumers, but some stores appear to be lowering egg prices. A few cents in the last few days.

The Egg Marketing Board sets farm prices, processors set wholesale prices for eggs, and grocers set retail prices paid by consumers.

“We don’t set retail prices at all,” said Tim Lambert, CEO of Egg Farmers of Canada. “We get paid based on the cost of production. prices are falling.”

Meanwhile, Canada’s egg supply remains stable, even as shortages continue to plague other countries.

“We have definitely faced challenges,” said Lambert. “But our system is very robust in storing eggs on the shelves. If there is a shortage, it is local and temporary.”

One of the strengths of Canada’s egg industry is the large number of small farms across the country. An average Canadian poultry farm has about 25,000 laying hens. By contrast, the average US farm has about 2 million birds, says Lambert.

“This is a very concentrated big company in the United States,” Lambert said.

Cal-Maine Foods, the largest producer and marketer of shell eggs in the United States, trades approximately 42 million layers of flocks on the NASDAQ. The company’s stock has risen 45% over the past year.

Experts say the challenge for a highly integrated industry is that disease outbreaks can have a large impact on supply. For example, if a country’s laying hens are concentrated in a handful of large pens rather than in many small pens, the impact of having to euthanize a flock during an avian flu outbreak is also greater.

“In Canada, production is fairly decentralized across the country,” said Professor Maurice Doyon of Laval University, chairman of the Egg Industry Economic Research Commission. “We’re not as focused, so it’s mathematically less risky.”

Half the number of Canadian hens affected

In the United States, about 44.5 million layer hens have been affected by avian influenza, representing about 14% of production, said Samantha Seeley, spokesperson for Agriculture and Agri-Food Canada. increase.

In Canada, approximately 1.6 million layer hens are affected by avian influenza, representing approximately 6% of Canada’s production.

Doyon said Canada’s egg industry is well-positioned to withstand other challenges, from supply chain issues to climate change.

“Supply management ensures that Canadian farmers have the means to do so, so they have enough margins to care for the health of their chickens and the environment,” he said.

Downsides of supply management

Still, while supply management may create a sustainable egg industry, critics say the costs are too high.

They say the benefits for consumers won’t outweigh the drawbacks of higher prices in the long run.

“Canada is clinging to this protectionist, archaic system that benefits a few entrenched stakeholders,” Wittevrongel said. “The actual price is much higher than at any other time, but it looks like it is in a better position now.”

Watch | Soaring food prices:

Food prices soar as inflation falls

Food prices in Canada continue to rise, but lower gas prices contributed to lower inflation in the country in December.

However, many commodities are more expensive in Canada than in the United States, and the vast majority are not under supply control.

“Look at bread and soup cans and even new cars, which are more expensive in Canada than in the U.S. but not under supply control,” he said.

Among supply-controlled commodities within Canada, Doyoung said, items such as eggs, milk and butter are generally much cheaper in big cities like Toronto than in other areas such as Maritimes.

For example, a dozen Sobeys Compliments white big eggs are $3.75 in Toronto, according to the chain’s Voila online grocery website. The exact same egg container in Halifax is $4.85.

The price difference between Toronto and Halifax highlights the regional differences that exist within the same country under the same system.

“I’m not saying supply management has no impact, but the entire price difference between, say, Canada and the US cannot be attributed to supply management.”

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