Demand for Ontario chicken wings its way up

Thursday, June 12, 2014

by SUSAN MANN

Stellar market conditions for chicken means the chicken industry should now look to immediately implement an aggressive growth strategy, says a Chicken Farmers of Ontario official.

“The retail channel for fresh meats continues to be ruled by chicken with increasing volume, average price and market share,” writes Chicken Farmers of Ontario business and policy analyst James Corpuz in the 2014 summer newsletter posted on the organization’s web site.

Henry Zantingh, Chicken Farmers of Ontario board chair, couldn’t be reached for comment.

Corpuz says all factors and indicators in the chicken market are strong and point to a growing market. That fact coupled with shortages in the supply of beef and pork “present chicken with an incredible opportunity to grow at an even faster rate in the foreseeable future,” he says. He notes that the beef and pork industries are currently experiencing substantial reductions in supply, which has been keeping prices high for those proteins.

But consumers are increasingly demanding more protein and among meat proteins chicken has “been the clear winner, gaining in both volume and price,” Corpuz notes. He points out that chicken’s market share this year is at 37 per cent, which is significantly higher than its average market shares in the past five years of 32 per cent.

During the first four months of this year, the volume of chicken purchased at retail increased by 5.6 per cent compared to the same time period last year. This year’s growth in the volume purchased at retail is nearly three times above the average growth experienced during the previous five years (2009 to 2013), Corpuz says.

In addition, the average selling price at retail for chicken has also shown strength leading to a significantly higher growth in spending of 6.3 per cent on fresh chicken so far this year compared to the five-year average of 4.4 per cent, he explains.

The market stability and favourable market conditions will continue during the last half of this year and into 2015 “and represent an environment that can support significant growth in chicken production,” Corpuz says.


Ontario chicken production set to grow

A Chicken Farmers of Ontario report on the Chicken Farmers of Canada meeting May 27 and 28 that set national allocation for the A-126 (Sept. 7 to Nov. 1) quota period notes that the allocation was set at 2.5 per cent over the adjusted base, which is 2.3 per cent more than last year’s actual production.

For Ontario, the allocation is equivalent to an actual production growth of 4.1 per cent compared to the same period in 2013, the Chicken Farmers of Ontario report says.

Mike Dungate, executive director of Chicken Farmers of Canada, says for Ontario, the production for the same eight-week period in 2013 that corresponds to the A-126 quota period was 50,060,278 million kilograms of eviscerated chicken. The allocation Ontario got for the A-126 (Sept. 7 to Nov. 1) quota period is 52,104,810 million kilograms of eviscerated chicken. That’s about two million more kilograms that can be grown in Ontario for the September to November eight-week quota period, he notes.

Eviscerated chicken is chicken that has been weighed after the guts and head and feet have been removed.

At that same Chicken Farmers of Canada meeting that set the allocation for the A-126 quota period, the national organization approved a separate allocation for Ontario of about 287,000 kilograms live chicken or 212,120 kilograms of eviscerated chicken for Ontario’s farmers to produce two specialty breed of chickens – Frey’s Special Dual Purpose and Silkies – to meet the growing demand from Ontario’s ethnic consumers.

“Ontario was the only province that got a specialty allocation because they were the only one that asked,” Dungate notes.

Asked if the allocation for Ontario is enough to meet the demand for specialty breed chicken in the province, Dungate says Ontario could have asked for whatever amount it wanted to. Chicken Farmers of Canada “gave them (Ontario) exactly what they asked for,” he notes.

Chicken Farmers of Ontario communications and government relations director Michael Edmonds says by email their request for the 287,000 kilograms was “based on preliminary market research and the ability of the system to support the distribution channel in the short term.”

He notes Ontario is home to the largest and fastest growing new Canadian and ethnic markets in Canada.


New labeling for Canadian-grown chicken

Chicken Farmers of Canada is now in the process of working out licensing agreements with processors and retailers to use its newly designed and trade-marked label notifying people the chicken they’re buying was raised by a Canadian farmer. The label features a bird with a maple leaf in in and the words under the bird in both English and French ‘raised by a Canadian farmer.’ “Those (licensing agreements) aren’t concluded yet but will be shortly,” says Dungate, noting Chicken Farmers isn’t charging licensing fees for the label’s use but the agreements are designed to spell out how processors and retailers can use the label.

The organization is also building consumer awareness of the label, he says, adding Chicken Farmers is having Twitter party planned for June 25.

This is Chicken Farmers of Canada’s third attempt to implement a national type of branding of chicken. The organization’s consumer usage and attitude surveys done every three years show “there is a trend that people really want to buy Canadian chicken,” he says. In the most recent survey done in 2013, 88 per cent of Canadians said they would be likely to ‘buy chicken if it had a label showing it was from Canada,” he notes.

Chicken Farmers wanted to develop a label that was uniform across different brands. Its surveying also found “the majority of Canadians would trust a label more if it came directly from farmers as opposed to processors and retailers,” he explains.

Canada is the 15th largest importer of chicken in the world, he says, noting chicken grown in the United States, Brazil and Thailand is imported into Canada. Those three countries are the biggest exporters of chicken to Canada.  But virtually all of the fresh chicken available in Canada is produced in Canada and the label is initially for use on fresh chicken. BF