New egg entrant program on temporarily on hold

Wednesday, February 3, 2016

by SUSAN MANN

Egg Farmers of Ontario’s new entrant program is temporarily on hold this year while the organization conducts a scheduled review.

Bill Mitchell, Egg Farmers public affairs director, says when the board launched the program in 2011 “there was a commitment in the original agreement that the operations of the program would be reviewed after five years for performance, tuning and to see how it’s going.”

Egg Farmers isn’t accepting applications for the program this year while the review is ongoing. The program is designed to encourage new farmers into Ontario’s egg farming business. Since it began, there have been nine new entrants under the program.  

Each year the program loans up to 10,000 units of quota (one unit of quota is equivalent to one laying hen) to successful applicants. The program’s participants must also buy quota to get access to the loaned quota. For every unit participants buy, the program loans them two units.

After 10 years, participants must start returning the loaned quota to Egg Farmers at the rate of 10 per cent a year over 10 annual installments. The quota is then loaned out again to other participants.

The Egg Farmers board already approved one change to the program as the review was getting underway. In January, the board decided to remove the requirement for participants to buy the quota first before they got the program’s loaned quota.

The change was made in response to two producers who contacted the board with concerns about having trouble getting quota on the exchange to get started under the program, Mitchell explains. The two farmers were accepted under the new entrant program in 2014 and tried to get the necessary quota on several exchanges since being approved.

The farmers became concerned they were running out of time to get quota and be operational by the deadline set by the program. As part of the new entrant program, participants have 18 months from when they’re approved to be in operation.

Before the exchange began in 2014, farmers wanting to buy quota found sellers on their own and made arrangements to buy the quota they need.

Under Egg Farmers’ quota transfer system, bidders who come the closest to the exchange price, and not the highest bidders, get the quota first and that reduces “the certainty of when you can buy quota,” Mitchell says.

The farmers notified the board “that the lack of the ability to control the timing (of when they could buy quota) was going to cause problems with their business plans,” Mitchell says.

Egg Farmers also released a number of reports in January in advance of its zone meetings, including egg numbers for 2015 compared to 2014, the 2015 business plan and areas of achievement, the 2016 business plan and the statement of operations.

Some of the numbers from the reports include:

• There were 446 egg and pullet quota holders in 2015, compared to 434 in 2014. The Ontario egg quota holders were 333 in 2015 and 323 in 2014.
• The number of Ontario leviable eggs graded (including eggs for further processing) in 2015 was 2.9 billion compared to 2.8 billion in 2014.
• The volume of Ontario egg production earmarked for the table market in 2015 was 80.7 per cent, while 19.3 per cent went to the processed and further processed market. In 2014, the Ontario table egg production volume was 79.5 per cent and 20.5 per cent of the volume was earmarked for the processed and further processed market.
• The Ontario egg levy deducted from producers was 29.25 cents a dozen in 2015 and 38.75 cents in 2014, a reduction of 9.50 cents last year compared to the previous year.
• Ontario’s hen allotment stayed the same in 2015 compared to 2014 at 8.5 million. BF