Providing a country with a stable supply of food is tough job for farmers all around the world. During bad weather or economic downturns, governments often have to provide their farmers with support programs and subsidies. Canada’s chicken farmers, however, are proud to do things differently.
To organize the production of chicken in Canada and ensure that stores and plates are always filled with fresh chicken, our industry uses a risk management method called “supply management”. What this system allows is for farmers across the country to match their production to Canadian demand. In other words, we carefully figure out how much chicken Canada will need and our farmers make sure to produce that amount.
By using this system, consumers are assured a reliable supply of fresh, high-quality food at a reasonable price. By ensuring stability and that the farmer receives a fair return for their work, supply management also eliminates the need for subsidies or relying on taxpayer dollars: it allows for a healthy, sustainable industry where farmers can reinvest with confidence in their communities and business.
While supply management does provide farmers with a return that covers their costs of production, it’s important to understand that farmers don’t set retail or restaurant prices. Those are set by the retailers and restaurants themselves, for a number of reasons: regional influences, store locations, loss leaders, competition, and more. In other words, they charge what the market will bear. Farmers negotiate what’s called the “farm gate price” – the amount the farmer receives per live chicken as they leave the farm – of which the price of buying feed is the most important component.
With its three strong pillars (import controls, production planning and producer pricing), the supply management system for chicken continues to evolve to meet the changing demands of the Canadian marketplace.