What is Supply Management

Farming is challenging. What other business has to contend with fluctuating prices, increasing input costs, trade inequities, increasing government regulation, environmental and animal activists, and the weather – all at the same time?  And still produce an abundance of nutritious, high quality, safe products at reasonable prices for Canada and the world.

Canadian hatching egg and chicken farmers are able to do this because of a national production system called Supply Management. It was developed by farmers in the 1960’s to counter wild swings in production and prices. During the booms, overproduction caused price drops, leaving many farmers without enough income to cover costs. During the busts, under-supply left consumers wondering where the chicken was. Supply Management means Canada’s chicken farmers can consistently raise enough chicken to meet consumer demand. When demand increases, as it has for the last 20 years, farmers raise more chicken. In fact, production in Manitoba alone increased steadily under supply management.

Supply Management means fair prices for farmers. Almost all hatching egg and chicken farms are family owned and, like any other business, farmers need to cover their costs and hopefully get some return on their investment in buildings and equipment. Every eight weeks, chicken farmers negotiate with processing companies to set the price for a live chicken. This is where farmer control of prices ends. Wholesale prices are set by processing companies and retail prices are set by the grocery stores. Chicken farmers have no say in what processors and retailers charge. Even so, chicken remains one of the most reasonably priced meats at the store.

Supply Management means that hatching egg and chicken farmers do not have to depend on taxpayer funded agriculture support programs. Even the cost of operating provincial and national farmer associations like Manitoba Chicken Producers, Chicken Farmers of Canada, and Canadian Hatching Egg Producers, is borne by farmers through a levy on every hatching egg and every kilogram of chicken they raise. The Canadian chicken industry has grown without grants or subsidies. Other countries provide extensive monetary support to their farmers but Canadian hatching egg and chicken farmers are proud to say “we can succeed on our own!”

Supply Management has allowed the chicken industry to grow, contributing to rural sustainability and creating jobs in urban communities. There are approximately 20,500 people directly employed on hatching egg and chicken farms and in processing plants across Canada. Thousands more have jobs that depend on the chicken industry – jobs in hatcheries, feed mills, transportation, equipment manufacturing and supply, grocery stores and restaurants.

Supply Management means that Canada’s borders are still open to hatching eggs and chicken from other countries. Seventeen percent of the eggs hatched in Canada are imported, mainly from the USA. Canada is 16th on the list of leading chicken importing countries, and imports equal to 7.5% of the previous year’s chicken production come into Canada duty-free. Most of this chicken comes from the USA, the world’s largest poultry producer. Canada’s chicken farmers also export chicken around the world. In 2009, exports totalled almost 128 million kilograms of chicken, putting Canada 7th on the list of leading exporters. Canadian chicken goes to countries like the Philippines, China, South Africa, Russia and even the USA.

The next time you enjoy chicken, thank Supply Management – for the abundant supply of nutritious, high quality Canadian chicken, and for allowing Canada’s hatching egg and chicken farmers to produce it for you.