‘Made-in-Canada system’ keeps egg supply stable. But is it also keeping prices high?

Canada’s egg business seems to be quietly sidestepping widespread shortages and wildly spiking costs affecting different international locations, and a few say provide administration is to thank.

The system, which controls the availability, import and farm worth of eggs, poultry and dairy, is usually criticized as benefitting Canadian farmers on the expense of shoppers. Critics blame provide administration at any time when costs of eggs and milk in Canada surpass these south of the border.

But as illness, local weather change and geopolitical unrest threaten world meals provides, supporters say the upside of provide administration is more and more obvious.

“We have a made-in-Canada system that has never been more critical to food security in Canada,” stated University of Waterloo historical past professor Bruce Muirhead, a former analysis chair for Egg Farmers of Canada.

“It’s keeping family farms alive and eggs on store shelves at a time when we’re seeing shortages around the world.”

Canada is not proof against the situations affecting egg costs and provide in different international locations.

Avian influenza, or fowl flu, labour shortages, provide chain points and hovering feed, gasoline and packaging prices have all affected egg manufacturing and processing prices in Canada over the previous 12 months.

Statistics Canada stated egg costs climbed 16.5 per cent 12 months over 12 months in December, making a dozen eggs that value about $3.25 final 12 months now $3.75.

While it is a vital enhance, it is a fraction of the spiralling prices recorded in different international locations.

In the United States, for instance, the U.S. Department of Agriculture stated egg costs had been up 59.9 per cent in December in contrast with a 12 months earlier.

In states like Arizona, California, Nevada and Florida, the price of a carton of eggs exceeded US$6 a dozen or about $8 Canadian in current weeks. Stores in some areas have even rationed eggs to keep away from empty cabinets amid provide chain points and attainable shortages.

The state of affairs within the U.S. has prompted accusations of alleged worth collusion among the many nation’s high egg producers, whereas some news reviews have steered consumers are travelling to frame cities in Mexico or Canada to purchase extra reasonably priced eggs.

In the United Kingdom, main supermarkets Tesco, Asda and Lidl have additionally set limits on what number of eggs clients should buy, whereas some egg farmers say they’ll not break even. Egg costs in December had been up 28.9 per cent 12 months over 12 months, the U.Okay.’s Office for National Statistics reported.

New Zealand can also be experiencing a nationwide egg scarcity, leaving some retailer cabinets naked and even prompting some shoppers to hurry out to purchase their very own yard chickens. Statistics New Zealand stated in an electronic mail the nation’s egg costs elevated 28.8 per cent in December 2022 in contrast with December 2021.

But critics say costs in Canada have not soared as drastically as in different international locations for the easy cause that costs had been already excessive to start with.

“When prices are already among the highest in the world, it’s no surprise that our prices didn’t spike quite as much,” stated Krystle Wittevrongel, a senior coverage analyst with the Montreal Economic Institute.

“It’s easy to maintain more price stability when we have huge, excessively high prices to begin with.”

Provincial egg advertising boards have indicated that costs in Canada are beginning to come down.

Egg Farmers of Ontario, for instance, dropped the worth farmers obtain for a dozen eggs by 14 cents as of Jan. 29. It’s unclear whether or not processors and retailers will go alongside these financial savings to shoppers, although egg costs in some shops seem to have lowered by just a few cents in current days.

While egg advertising boards set farm costs, processors set the wholesale worth of eggs and grocers set the retail worth shoppers pay.

“We don’t set the retail price at all,” Egg Farmers of Canada CEO Tim Lambert stated. “We get paid based on our costs of production. We’re seeing grain prices ease up right now, and so our barn gate price is decreasing.”

Meanwhile, egg provide in Canada has remained regular at the same time as shortages proceed to plague different international locations.

“We have definitely faced challenges,” Lambert stated. “But our system has been really robust at keeping eggs on the shelves. If there are shortages, they’re local and temporary.”

One of the strengths of Canada’s egg business is the higher variety of smaller farms throughout the nation, he stated.

The common egg farm in Canada has about 25,000 laying hens. In distinction, the typical farm within the U.S. has about two million birds, Lambert stated.

“It’s a highly concentrated big business in the U.S.,” Lambert stated.

Cal-Maine Foods, the most important producer and distributor of shell eggs within the U.S., is traded on the Nasdaq with a complete flock of about 42 million layers. Its share worth has soared 45 per cent over the previous 12 months.

Experts say the problem with a extremely consolidated business is that illness outbreak can have a bigger impact on provide. For instance, if the nation’s laying hens are concentrated right into a handful of bigger barns — somewhat than a bigger variety of smaller barns — the impression of getting to euthanize a flock throughout a fowl flu outbreak can also be larger.

“In Canada, production is pretty well distributed across the across the country,” stated Universite Laval professor Maurice Doyon, an Egg Industry Economic Research Chair. “Just mathematically the risk is lower, because we don’t have that huge concentration.”

In the United States, about 44.5 million laying hens had been affected by avian influenza, representing about 14 per cent of manufacturing, Agriculture and Agri-Food Canada spokesperson Samantha Seary stated.

In Canada, about 1.6 million laying hens had been affected by fowl flu, or about six per cent of Canadian manufacturing, she stated.

Canada’s egg business can also be higher positioned to resist different points from provide chain issues to local weather change, Doyon stated.

“Supply management ensures a healthy enough margin that farmers in Canada can take care of the health of the hens and the environment because they have the means to do it,” he stated.

Still, whereas provide administration might create a sustainable egg business, critics say it comes at too excessive a value.

They say the benefits do not outweigh the downsides of upper costs for shoppers over the long term.

“Canada’s stuck on this protectionist, archaic system that benefits a small group of entrenched interests,” Wittevrongel stated. “It seems like we’re in a better position now when in reality our prices are so much higher at any other time of year.”

But a number of gadgets are costlier in Canada than within the United States — and the overwhelming majority will not be provide managed, Doyon stated.

“Let’s look at bread or a can of soup or even a new car. These are more expensive in Canada than in the United States, but they’re not under supply management,” he stated.

Even amongst provide managed items inside Canada, gadgets like eggs, milk and butter are usually less expensive in larger cities like Toronto than in different areas such because the Maritimes, Doyon stated.

For instance, a dozen Sobeys Compliments white giant eggs value $3.75 in Toronto, based on the chain’s Voila on-line grocery web site. The very same container of eggs in Halifax prices $4.85.

The worth distinction between Toronto and Halifax underscores the regional variations that exist even inside the identical nation underneath the identical system.

“I’m not saying that supply management has no impact. But you just cannot attribute the entire difference in price between say Canada and the United States to supply management.”

This report by The Canadian Press was first revealed Feb. 3, 2023