The old system for chicken was based on the farmer's price of buying chicks and chicken feed, plus a "reasonable" amount for the farmer's labor, overhead expenses, and capital costs. Sounds reasonable, easy to understand, and possibly justifiable.
Unfortunately, the #ChickenMafia and their friends floated mirages and artificial prices for each of these pricing formula factors, putting in the fix to maximize the #ChickenMafia's profits. This system of smoke and mirrors allowed the #ChickenMafia farmers to become the highest paid farmers in Canada, 21.1% higher than the median farmer's income (see Blog posting Tail Wagging The Dog ).
How did the #ChickenMafia distort a simple pricing formula to their weapon of choice for gouging the Canadian public? Many family farms have been bought, merged and amalgamated into the fold of Big Ag. multi-national billionaire corporations. Many other chicken farmers have become Big Ag's puppets. Big Ag. and their feed mills own or influence the chick hatcheries, the chicken feed producers, the chicken farmers who grow the chicken to full size, the abattoirs who slaughter and process the chickens, and distribute them to the grocery stores.
That web of control and influence is called vertical integration. That vertical integration creates a very powerful force, one that is hidden from public view, and beyond government control, supervision, or oversight.
Barrie McKenna at The Globe & Mail described the struggle over the ammeding this sneaky, stealth control of the chicken pricing formula by the #ChickenMafia.
On a related basis, Chicken Farmers of Canada are ammending their formula for which province gets to grow Canadian chicken. Here is the guts of the new deal:
4.1 Subject to the other provisions in this MOU, if the national allocation for a period is set above base, the growth (over base portion) of the domestic allocation will be distributed using a differential growth formula that consists of the following eight components and component weighting:A. Provincial share of the national base allocation – 45%
B. Population growth – 7.5%
C. Income - based Gross Domestic Product (GDP) growth – 7.5%
D. Consumer Price Index (CPI) – 7.5%
E. Farm Input Price Index (FIPI) – 10%
F. Quota Utilization – 7.5%
G. Further Processing – 10%
H. Supply Share – 5%