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”. This system allows farmers across the country to match their production to Canadian demand. In other words, we carefully figure out how much chicken Canada needs 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 that farmers receive a fair and stable returns for their work, supply management also eliminates the need for subsidies or for relying on taxpayer dollars. Instead, supply management supports a healthy, sustainable sector whose farmers are able to reinvest with confidence in their communities and businesses.
While supply management ensures that farmers are able to receive a fair return from the market that covers their costs of production, it’s important to understand that it does not set retail or restaurant prices. Those are set by the retailers and restaurants themselves based on a number of factors such as 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. The price of buying feed makes up the most important component of the farm gate price.
With its three strong pillars (import control, production planning, and producer pricing), the supply management system for chicken continues to evolve to meet the changing demands of the Canadian marketplace.