Meeting organic market demand drives establishment of new entrant program for chicken processors

Wednesday, October 14, 2015

by JIM ALGIE

The first year of a “new entrant” program for chicken processors in Ontario is to target organically-grown poultry and could add up to 100,000 kilograms within two years, judging by program details announced recently by Chicken Farmers of Ontario (CFO).

The Oct. 8 announcement follows a series of initiatives over the past 12 months by the provincial marketing board to address “changing market needs” and possible, new, international markets for Ontario chicken. Since September of 2014, CFO has announced seven new and revised policies, including those for artisanal chicken, local niche markets and specialty breeds.

As well, the organization, which is responsible for managing Ontario chicken supplies under federal supply-management rules for the production of chicken in Canada, has revised rules of entry for new chicken growers and for small flock operators.

The “New Entrant Chicken Processors Program” is to provide up to 100,000 kg annually to successful applicants for a “calculated base,” poultry supply dedicated specifically to specialized markets, CFO spokesman Michael Edmonds said in an interview, Thursday. Additional supply under the program is to be announced annually for a specific “strategic market segment,” the CFO statement says. The deadline for this year’s applications is Dec. 31.

“The ability to make more production capacity available to a new entrant processor should help lead and drive new growth opportunities in the province,” CFO chair Henry Zantingh says in the statement. The organization’s Chief Executive Officer Rob Dougans said the program boosts flexibility and ensures “processing development is more closely aligned to emerging market needs whether domestic or international.”

The Oct. 8 announcement followed closely the conclusion in Atlanta of lengthy trade talks regarding the 12-nation Trans-Pacific Partnership. If adopted, the TPP will allow increased imports of chicken to Canada to as much as 10 per cent of Canadian consumption, some reports indicate.

Although CFO’s new programs don’t address TPP issues directly, they will help Ontario chicken growers and processors compete internationally, Edmonds said in Thursday’s interview.

“Obviously we’ve not seen any of the technical documents to date so probably couldn’t speak to any matters that have arisen in the last week or so,” Edmonds said when asked about TPP. “If in the case of a business enterprise’s research they have identified markets that might be accessible for them or could be filled by Ontario-grown chicken . . . the board would look at ways to enable that,” Edmonds said.

“The market is extremely dynamic,” the board spokesman said. “There are new ideas and new market opportunities that are arising all the time and I think the board has taken its responsibility to meet markets seriously,” Edmonds said.

“Obviously, the market for chicken in Ontario is growing and has been for the past few years,” he said. A review of its programs led board members to revise existing programs and target a variety of niche and specialty markets, including the organic supply, Edmonds said.

“A number of processors have organic programs but it became clear through the consultation that not all the organic markets were being met; so that was part of the recent development of the new entrant programs,” he said. An Association of Chicken Processors of Ontario spokesman could not be reached for comment.

Eligible processors must be Canadian citizens and permanent residents of Ontario with access to suitable processing facilities, a background paper on the CFO website says. To qualify, applicants much agree to do business using digital communications and to provide a comprehensive business plan to include product details, volumes, margins and prices. As well, applicants will be subject to verification of relevant, meat protein, processing expertise as well as financial arrangements.

Successful applicants have 24 months to complete their processing arrangements including applicable Canadian Food Inspection Agency or provincial licenses, the background document says. BF