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Wednesday, March 4, 2015

Chicken Pressure Cooker

They are attacking the Chicken Mafia from all sides.  The pressure is intense.  Battle lines are drawn.  Can we negotiate a lasting peace and avoid a fight to the death?

The Chicken Mafia is surrounded on all sides by more than 6 different groups working for the same or similar goal of affordable chicken & alternative chicken supplies, and locally produced chicken for the people of Ontario.


Is there any reason to suspect that these grass root forces from many different directions have finally caught the attention of the Chicken Mafia, who suddenly decided to turn up the volume on their hearing aid?

The Chicken Mafia, Ontario Branch, includes (but isn't limited to) all of the following:
  • Chicken Farmers of Ontario
  • Association of Ontario Chicken Processors (AOCP)
  • Ontario Broiler Hatching Egg and Chick Commission ("OBHECC")
  • Ontario Farm Products Marketing Commission (OFPMC)
  • Most of the 1,400 millionaire chicken factory farms
  • Paid lobbyists, consultants, spin doctors, propagandists, and henchmen of the above

Tuesday, March 3, 2015

OFPMC Has Been Asked, Will they Answer?

Ontario's Farm Products Marketing Board ("OFPMC") has been asked about the new farm gate chicken price method, and the openness transparency accountability of Ontario's Supply Management ("SM") System.  Will they answer in a meaningful way?

This continues our inquiry on CFO's new system of calculating the farm gate price of chicken.  See the previous Blog Postings:

Chicken Pricing: From Bad to Worse

Using Chicken to Rape the Ontario Consumer
OBHECC Hatched Some Answers
As always, time will tell.

I have asked OFPMC about their position on openness, transparency, accountability, and oversight. A copy of my email is available here. Hopefully, we will get their official answers.

OFPMC has a new Board Member, Joseph Dickenson, a beef farmer from Oil Springs in Southern Ontario (near Sarnia).  As a non-SM farmer, will Joe breath new life into the OFPMC?

But wait, there's more.  Of the 8 member Board, three others have their appointments expiring this year.  Will the new appointees tip the balance?

All of these Board Members are constrained by the Act and Regulations.  For the most part, it's the system that determines the outcome. Individuals tend to follow the rules laid down for them, whether the rules are right or wrong.

Only a few individuals will use their own thoughts and moral compass to do what's right.  In that case, the government retains the power to terminate the appointment, and pick somebody else.  Eventually the government's bidding is done.

Since the lobbyists, Big Food, and Big Ag. all speak loudly and profitably, the government listens to them, and the average citizen is often forced to take the crumbs from the millionaire's banquet.  So much for democracy.

Small Flockers are the majority of chicken farmers in Ontario, but we are at the mercy of a handful of millionaire chicken farmers who set the rules in their favor. 


OBHECC Hatched Some Answers

I sent them some questions, and Ontario Broiler Hatching Egg and Chick Commission ("OBHECC") quickly hatched some answers.

My sincere thanks to Mr. Bob Guy, General Manager of OBHECC for their prompt response to my queries.

Perhaps I have become too jaded by trying to get answers from Chicken Farmers of Ontario ("CFO") for the last 3 years, only to be ignored by them.

Unfortunately,  I  expected the same from their Supply Management cousins at OBHECC.  Perhaps the "Cold War" is thawing, and the Supply Management Boards have decided, or been forced or "encouraged" by their government supervisors at Ontario Farm Products Marketing Board, to be more responsive, open, transparent, and accountable.

Time will tell.

The lesson to be learned is that there should always be hope.  Oscar Wilde said:

"Every saint has a past, and every sinner has a future"

We need to assume this applies to all people and all organizations; even the Chicken Mafia.  The only question is the specific timing of their personal epiphany.

OBHECC's answers and my questions are available in full from a copy of the email correspondence here

In short, OBHECC collects information from secret sources, then OBHECC uses a secret formula to calculate a magical number that is then secretly sent to both CFO and AOCP every 8 weeks which defines the chick price, which in turn is used to determine the Ontario chicken price.

If the Manhatten Project had used this level of secrecy, we would never have had to worry about nuclear proliferation.  They didn't, so now we have Jihadists threatening us with either dirty suitcase bombs or knives.

Perhaps that's why OBHECC is being so careful with their chick secrets.




Friday, February 27, 2015

Backyard Poultry

Followup question on yesterday's posting Fantastic Financial Future via Pastured Poultry Profits Project ("PPPP")

I have been questioned as to why 2,000 birds, and how big of a farm do they need.

To raise 2,000 bird per year, with fresh grass under the bird's feet every day as pastured poultry, will require a grass pasture (or lawn), of just 81 ft. x 81 ft. (ie. 0.15 acres).

Just about anybody, anywhere, can grow 2,000 birds per year, producing 2,731 kg of eviscerated chicken each year, which would provide an annual chicken supply for 74 people at the Canadian average of 37 kg of chicken per person per year.

Is this why CFO won't raise the quota limit for Small Flockers?

Thursday, February 26, 2015

Fantastic Financial Future via Pastured Poultry Profits Project ("PPPP")

There is a fantastic financial future for Small Flocker's through PPPP (Pastured Poultry Profits Project).

In yesterday's Blog posting (see Pastured Poultry Profits ), I outlined how Small Flocker's can adopt a perfect pastured poultry process.

OK, OK, enough on the alliteration.

Figure 1:   Small Flocker's PPPP with input
pricing similar to CFO's chicken factories
Today, we'll look at what will soon be possible through Small Flockers getting the same or similar pricing that the millionaire chicken factories enjoy.

Figure 1 shows the pro forma financial budget for Small Flocker's PPPP (Pastured Poultry Profit Project).  Right click on the image, choose "View Image", then click to magnify to full size.  Alternatively, you can view an Acrobat pdf version document here

This PPPP budget assumes:
  • Farmers raise all of their birds in one flock, minimizing catch and transport fees (Line 7).
  • Small Flockers in Ontario are allowed to raise 2,000 birds (as compared to the 300 birds/yr limit), see Line 18.
  • FCR (Feed Conversion Ratio) is 30% better than CFO's chicken factories, justified by a cleaner environment that allows birds a better utilization of the feed, and the grass and bugs they can eat as reducing the feed needed (Line 25).
What results is that Small Flockers earn a 30.31% higher profit margin than the millionaire chicken factory farmers (see Line 34).

Also, the retail customers of Small Flockers' PPPP chicken enjoy prices 11.79% below the current retail prices from the Chicken Mafia and their chicken factories and their retail partners (see Line 44).

This means local prosperity for the Small Flocker farmer and their community, and chicken that is more affordable for Ontario's consumers.

As described previously, this financial analysis covers only the direct variable costs, assuming the necessary capital infrastructure already exists, is fully paid for and fully depreciated, and PPPP is only an expansion of an existing chicken business. That may not be true in all cases.  For a more comprehensive financial analysis without these simplifying assumptions, see here and here.

I'm accepting the names of Small Flockers who are interested in finding out more about PPPP.  I have already joined SFPFC's PPPP, and hope you will join me.  There is strength when we work together to achieve this important project.







Wednesday, February 25, 2015

Pastured Poultry Profits

Pastured poultry produces a better chicken.  Small Flockers can use these methods to provide safe, nutritious, affordable, and locally grown meat and eggs for their family and community.

Joel Salatin of Polyface Farms and others have shown us the way to the future.  I have read Joel's book Pastured Poultry Profit$, listened to Joel speak at the recent seminar sponsored by Practical Farmers of Ontario, and spoke to him personally afterwards.  I believe in what he is doing.  I plan to implement Joel's system this Spring, and recommend  other Small Flockers to come join me.  Rather than keeping his success as a secret, Joel openly shares to all.


I will also share, for all members of SFPFC.
Figure 1:   PPPP (Pastured Poultry Profit Project) Base Case
based on severe restrictions currently imposed upon Small Flockers

Figure 1 above shows an Excel spreadsheet on the PPPP (Pastured Poultry Profit Project).  Right click on the image, choose "View Image", then click to magnify to full size.  Alternatively, you can download a pdf version here.

The yellow coloured cells are the ones that contain assumptions or user input that may need to be changed for different Small Flockers or situations.

As can be seen in these numbers, Small Flockers have significant price disadvantages compared to the chicken factories operated under CFO's Supply Management monopoly.

For example, I bought chicken feed yesterday at $18.00 per 25 kg. bag, or $720.00 per tonne.  CFO says the market price for chicken factories to buy feed is just $379.075 per tonne, a 47% discount compared to Small Flockers.  Same goes for chick prices, abattoir processing, and many other important costs, both fixed and variable.  Add to that the bureaucracy and restrictions imposed only on Small Flockers by CFO (eg. Small Flockers are not permitted to do marketing or advertising, etc.), and you have a nightmare.

Fortunately, we have a Dream Catcher that will ensnare those evil spirits and nightmares, providing Small Flockers peaceful sleep and purposeful lives.  That solution is PPPP (Pastured Poultry Profits Project).

This pro forma cost calculation showing that Small Flockers can still compete because we are local, our neighbours like us, and we produce better tasting, more nutritious birds at a fair price.

Our analysis shows that Small Flockers can sell their birds at $8.04/kg ( $17.69 per pound).  For a 2 kg live chicken (1.37 kg. eviscerated), it would cost $11.01 retail, sold from the Small Flocker's farm gate.

The Dec. 2014 retail price of chicken in Ontario for whole, fresh chicken according to StatsCan is $7.43/kg. so Small Flockers are at a 48% premium price, even with all of the current disadvantages or oppressive restrictions by CFO.

For me and my family, we'd vote for the better, locally produced chicken at just a 48% premium.

Perhaps that's what CFO and the Chicken Mafia are worried about.

Note that the above financial analysis covers only the direct variable costs, assuming the necessary capital infrastructure already exists, is fully paid for and fully depreciated, and PPPP is only an expansion of an existing chicken business. That may not be true in all cases.  For a more comprehensive financial analysis without these simplifying assumptions, see here and here.

Tomorrow, we'll look at the potentially better PPPP Small Flocker price for chicken if we get some of the current restrictions and competitive disadvantages removed.

For now, I'm collecting names of Small Flockers who tentatively want to raise their hand as being interested in working co-operatively to make PPPP a reality.  No firm commitment is required at this time, just that you're interested in learning more.  Put a comments below, publicly declaring your interest, or send me a private message to cdn.small.flockers@gmail.com

Monday, February 23, 2015

Using Chicken to Rape the Ontario Consumer

Has CFO crossed the line into unacceptable behaviour again?  OFPMC is supposed to supervise the actions of CFO and others.  Has OFPMC encouraged CFO's bad behaviour, or turned a blind eye towards it?

In a previous post (see Chicken Pricing: From Bad to Worse), I pointed out the consequences of the latest "improvement" in regulations issued by Ontario Farm Products Marketing Commission ("OFPMC").

Today, I sent CFO and OFPMC an email asking for the missing information, and for them to explain their actions.

It escapes me how anybody could call the new system for setting the live farm gate chicken prices in Ontario to be an "improvement" over the previous system.  Today, we have more complexity, less transparency, and more opportunity for arbitrary action.

Agri007 picked up my original Blog posting, and added some interesting detail on the added complexity and bureaucratic bafflegab.

As to the arbitrariness, note in Section 18.(2) of ON Regulation 402 (as amended by O. Reg 6/15),  which says:
"CP means the live chick price for sexed mixed chicks established by the Ontario Broiler Hatching Egg and Chick Commission for each quota period, expressed in dollars per kilogram of live chicken, and adjusted as necessary by the negotiating agency each quota period" [emphasis added by me]

Under Section 17 of this Regulation, CFO and their "friend" AOCP (Association Ontario Chicken Processors, the multi-millionaire Big Food owners of the major chicken slaughtering plants and distribution systems) both sit on the "negotiating agency". 

The same arbitrary latitude is given to the Chicken Mafia (ie. CFO, AOCP, and all their henchmen) for the "FP" (Feed Price) factor that is the prime factor that controls live farm gate pricing of chicken.

Exactly how and why should the Chicken Mafia "adjust" the CP and FP?

What limits exist for adjusting?  Is +/- 1% or +/- 300% adjustment OK, or somewhere in between?


Does the Chicken Mafia have to tell anybody when they have been privately fiddling with the numbers?

Does the public (or other interested parties such as Small Flockers or Affordable Food Advocates) get an alert when the Chicken Mafia has been playing fast and loose with the farm gate prices?

Are there improper reasons for the Chicken Mafia to adjust these price fixing factors?

It is obvious to me that it's the public, the end consumer and purchaser of the chicken, who ultimately pays the bills for anything that the "negotiating agency" decides.

Am I the only one on this planet who understands the sad yet shocking truth?  CFO and AOCP are not adversaries, they are in cahoots with each other.  There can be no "fair bargain" when both CFO and AOCP work together to screw the Ontario consumer.  Both CFO and AOCP realize that if they mutually co-operate with each other, their profits will be maximized; all paid for by the Ontario consumer.  When CFO and AOCP co-operate with each other, the price of chicken in Ontario rises faster and the choice available to consumers diminishes.

The analogy that applies to ON Regulation 402 and its "negotiating agency" is as follows:
The Mafia Don has instructed two of his henchmen to negotiate the agreed split of the loot that they will rob from every house and business in town.  After very tough negotiations, the robbers decided amongst themselves to split the loot 60-40, a fair split the robbers decide, as it recognizes the greater skill and years of experience by the lead robber.  Shaking hands on their deal, the two robbers then set out to burglarize every building in town and split the proceeds 60-40 as they have privately agreed.  The Mafia Don is happy because his cut of the loot is maximized.  The robbers are both happy because they each have help with all the heavy lifting they must do as they rob everybody in town, and one can be the lookout for the other, ensuring the authorities never interfere.  Unfortunately, the innocent townspeople are preyed upon to the maximum, because the thieves have organized themselves and rob in an efficient manner with no in-fighting.

Why doesn't OFPMC understand that they have guaranteed maximum damage and oppression to the Ontario consumers of chicken by their crazy regulation?

Will somebody stop OFPMC, CFO, and AOCP from their dysfunctional system and the systemic abuse of the Ontario public?

At the top of this Blog page, SFPFC says, "...Small Flockers are on the side of justice & truth, and against privilege & power."

SFPFC can't do it alone.  Will somebody help stop this organized raping of the Ontario public? 

Sunday, February 22, 2015

Social Justice through Chicken and Eggs?

The United Church of Canada, like many other organized religions, have been involved in social justice issues for many decades, if not throughout their entire existence.  Could there be a shared focus between these church groups and SFPFC's issues and expertise?

The United Church is multifaceted on its areas of focus for outreach, mission & service, and social justice.  Some of those initiatives have been in Canada, as well as around the world.  Some of the issues, both past and current, for the United Church have been:
  • Nutritious Food,
  • Affordability of food,
  • Food Bank dependency
  • Small farm & family farm focus,
  • Concentration of ownership & control of our food system
  •  Local food
The details on these UCC initiatives can be reviewed here:
  Is there sufficient alignment between UCC and SFPFC to make it worthwhile for both organizations to work co-operatively for the greater good of Canadians?