Despite a claim by the Ontario Farm Products Marketing
Commission that the new protocol for pricing live chicken, Glenn Black of
Providence Bay says it’s not as transparent as before.
The Chicken Farmers of Ontario marketing board used to post
some of the information used to determine prices, but now simply announces the
price with no explanations or documentation.
The commission, on its website, says “the full COPF (cost of production formula) is described
in the regulation in a transparent fashion and includes provisions for the
regular updating of the individual elements to ensure the formula remains
current and reflects a reasonable return to efficient producers.”
This is what the
regulations say:
“Despite subsections (2) to (5.2), the negotiating
agency shall negotiate the minimum live prices for chickens for quota period
A129 (six weeks beginning Feb. 22) by applying the formula set out in
subsection (2), subject to the following rules:
1. The chick price shall be determined by using the
amount of $0.3275 as the chick price for quota period A121 and negotiating
adjustments to that amount to reflect the changes from quota period A121 to
quota period A129.
2. The feed price shall be determined by using the
amount of $0.7094 as the feed price for quota period A121 and negotiating
adjustments to that amount to reflect the changes from quota period A121 to
quota period A129.
3. The producer margin shall be determined by using
the sum of the values set out in Column 3 of Table 1 of this section as the
producer margin for quota period A121 and negotiating adjustments to those
values, other than the values set out in items 9, 10 and 11 of Column 3 of the
Table that are fixed values, to reflect the changes from quota period A121 to
quota period A129.
4. The negotiating agency shall determine the volume
adjustment for quota period A129, in the following manner:
i. Determine the volume adjustment for quota period
A129 in accordance with paragraphs 1, 2 and 3 of section 1 of Schedule 1.
ii. Determine the volume adjustment for quota period
A122 in accordance with paragraphs 1, 2 and 3 of section 1 of Schedule 1, using
the values set out in Column 3 of Table 1 of this section for the purposes of
the multiplication required under paragraph 3 of section 1 of Schedule 1.
iii. Determine the sum of the amounts determined under
subparagraphs i and ii.
5. The negotiating agency shall determine the feed
efficiency adjustment for quota period A129 in the following manner:
i. Determine the average of the feed prices, expressed
in dollars per tonne, that were used to determine the minimum live prices for
chickens during the previous 12-month period and multiply that average feed
price by 0.000014.
ii. Determine the average of the feed prices,
expressed in dollars per tonne, that were used to determine the minimum live
prices for chickens during the 12-month period that preceded the 12-month
period referred to in subparagraph i and multiply that average feed price by 0.000014.
iii. Determine the sum of the amounts determined under
subparagraphs i and ii.”
And, in case you were wondering, here’s section (2)
for transparency on regular pricing:
“2) Beginning with quota period A129 in
2015, the negotiating agency shall negotiate the minimum live prices for
chickens by applying the following formula and negotiating adjustments to the
various components of the formula in accordance with subsections (3), (4), (5),
(5.2) and (5.3):
MLP = (CP + FP + PM) − AA
Where,
MLP means the minimum live price for chickens;
CP means the live chick price for sexed mixed chicks
established by the Ontario Broiler Hatching Egg and Chick Commission for each
quota period, expressed in dollars per kilogram of live chicken, and adjusted
as necessary by the negotiating agency each quota period;
FP means the weighted average feed price derived from
at least three independent Ontario feed mills with the largest volume of sales
of chicken broiler feed that is reported by the Ontario Agri Business
Association for each quota period, expressed in dollars per kilogram of live
chicken, and adjusted as necessary by the negotiating agency each quota period;
PM means the producer margin, being the sum of the
costs and expenses described in Column 2 of Table 1 of this section, as those
costs and expenses are valued by the negotiating agency annually under
subsection (4); and
AA means the three annual adjustments described in
Schedule 1.
(3) The negotiating agency shall negotiate
the chick price and feed price each quota period.
(4) Each year, the negotiating agency shall
negotiate the value of each of the costs and expenses described in Column 2 of
Table 1 of this section, other than the costs and expenses referred to in items
9, 10 and 11 of the Table that have a fixed value set out in Column 3 of the
Table, and the renegotiated values shall take effect at the beginning of the
first full quota period of the year.
(5) Despite subsection (4), the values of
any costs and expenses that are to be negotiated annually under that subsection
may be negotiated more frequently than annually if exceptional and unforeseen
circumstances exist.
(5.1) If the values of any costs and
expenses are negotiated more frequently than annually in accordance with
subsection (5), the renegotiated values shall take effect at the beginning of
the quota period that follows the conclusion of the negotiations and shall
remain in effect until the beginning of the first full quota period of the
following calendar year.
(5.2) The three annual adjustments
described in Schedule 1 shall be agreed to by the negotiating agency each year
and shall take effect at the beginning of the first full quota period of the
year.”
Got that?
I thought not.
But it’s transparent!
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