JULY 2019 • COUNTRY LIFE IN BC


Pricing remains an ongoing issue for poultry sector


FIRB gives marketing board set deadline for permanent formula by DAVID SCHMIDT


ABBOTSFORD—It is often said that a good deal is one which satisfies neither side. If that is true, the BC Chicken Marketing Board’s interim pricing formula for periods A151-A156 (July, 2018-May, 2019) was a good one. The formula set the BC live chicken price at the Ontario price plus 75% of the difference in feed costs between BC and Ontario (based on a six-period rolling average) and $0.0365 for catching.


Both the Primary Poultry


Processors Association of BC and the BC Chicken Growers Association appealed the formula to the BC Farm Industry Review Board. The processors complained that it struck a “wrong balance” between processor competitiveness and grower returns, saying it leaned too much towards growers. They asked for a fixed differential of six cents over Ontario for a period of three years. Growers, in turn, claimed the formula did not lean far enough, demanding it include a 100% feed differential. In a decision released in


late May, FIRB rejected both arguments, not only ruling that the interim formula was acceptable but giving the board until the end of period A161 (February 2020) to come up with a more permanent formula. The board has already


taken the first steps in developing that formula, asking a pricing


subcommittee of the pricing and production advisory committee to work with a facilitator to come up with recommendations. “We’re disappointed we


didn’t get 100% but we’re pleased FIRB recognized the board’s thorough consultation,” BCCGA president Dale Krahn said following the growers meeting in Abbotsford, June 19.


One of two growers on the new pricing subcommittee, Krahn said the aim is to “come up with (a formula which allows growers and processors) to grow the industry together.” BCCMB director Ray Nickel


told growers that if the subcommittee cannot come


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up with an agreement, “the board will forge ahead on our own.” Complicating the issue is the BC Broiler Hatching Egg Commission’s threat to remove the linkage between chicken and hatching eggs. Since the linkage was adopted in 1994, the hatching egg price has been set so hatching egg producers and chicken growers get the same rate of return on their cost-of- production, (i.e., if the chicken price results in a 95% return on growers’ COP, the hatching egg price would be set so hatching egg producers get a 95% return on their COP). That has long been a source of irritation for hatching egg producers who are


demanding they get a 100% return on their COP. The linkage has meant that although the BCBHEC has always had the power to set its own price, it has not used it for the past 25 years. BCCMB general manager


Bill Vanderspek admits the linkage is “not ideal” but believes it’s worth preserving. “We have enough other


issues, we don’t need another added complication in pricing,” he told growers. Perhaps the major other issue is what’s happening in Ontario. Nickel notes all other


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Neither processors or growers are satisfied with BCCMB’s interim pricing formula. [FILE PHOTO]


Canadian provinces price off of Ontario but that price is itself in flux. “Ontario has been going


through a review of its pricing policy. It’s now in the hands of a mediator and will likely go to an appeal,” he said, adding the process is “taking longer than we expected.” Growers did receive good


news on other fronts. BCCMB director Derek


Janzen told them Chicken Farmers of Canada will be setting its allocation for periods A159 and A160 at the end of June and it is expected to be at least 118% to 120% of the primary quota. “It could be even higher because of the swine flu in China which could increase the demand for dark meat chicken,” Janzen said. Krahn told them the new


Poultry in Motion educational mini-barn, the industry’s third,


on Vancouver Island is already a huge success. Only launched in April, the trailer had already visited 35 elementary and secondary schools by mid-June. It is also scheduled to appear at five VI agricultural fairs this summer. He also reported that the


BCCGA is moving full speed ahead to hire its first association manager, saying it hopes to have someone in place “by fall.” To pay for the new person and because the manager is expected to take some of the load off grower directors, Krahn said the association expects to reduce the number of association directors. “We expect to eliminate one director position next


year and another the year after,” Krahn said, telling growers it will still require “a lot of discussion as to how the remaining directors are laid out.” Krahn also appealed to


growers to send the association copies of the BC111 chick mortality form. Growers are required to send the form to the board and their processor but neither of those parties will release them to the association. He said BCCGA director Brad Driediger will compile aggregate mortality data per hatchery to determine if there are any correlations between first week mortality and individual hatcheries over time.


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