Poultry Marketplace

Profile of The Canadian Turkey Industry

Chapter 4: Turkey Production in Canada

• INDEX
  
  
• CHAPTER 1: Introduction
  
  
• CHAPTER 2: World Turkey Production and Trade
  
  
• CHAPTER 3: Canadian Turkey Production and Supply Structure
  
  
• CHAPTER 4: Turkey Production in Canada
  • 4.1 Production in Canada
    
  • 4.2 Turkey Quota Allocation
    
  • 4.3 Number of Farms in Canada and Farm Size
    
  • 4.4 Price Mechanism and Price Paid to Producers
    
  • 4.5 Farm Cash Receipts
    
  • 4.6 Farm Financial Situation
    
  • 4.7 Producer Support Estimates
    
    
• CHAPTER 5: Processing and Further Processing
  
  
• CHAPTER 6: Canadian Turkey Market
  
  
• ANNEX A: The Import Control List
  
  
• Tables and Figures
  
  
• Bibliography

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4.1  Production in Canada

In 2006, turkey production in Canada reached 162.5 million kilograms and was up 5% from the previous year. Over the last fifteen years, Canadian production under supply management increased by 24.9%.  This can be explained by a higher consumer demand for non red meat products during the last few decades.

In 2006, the majority of production (66.2%) was produced in Ontario and Québec.  The third-largest producing province was British Columbia. Together, these three leading provinces account for 78% of Canada’s total turkey production.  Since 1996, the provinces that have seen their production increase the most are British Columbia (+22.1%) and New Brunswick (+16.4%).

Table 7 – Annual Turkey Production
(thousands of kg, eviscerated weight)

	1991	1996	2001	2006	Change 1996 -2006 (%)
B.C.	13,968	15,099	16,020	19,404	28.51%
Alberta	11,453	12,130	12,857	13,054	7.62%
Saskatchewan	4,756	4,728	5,035	5,255	11.15%
Manitoba	9,678	9,891	9,701	10,621	7.38%
Ontario	55,995	67,314	66,158	74,627	10.86%
Québec	28,311	30,852	32,448	32,962	6.84%
New Brunswick	2,440	2,395	2,457	2,865	19.62%
Nova Scotia	3,562	3,844	3,780	3,787	-1.48%
CANADA	130,166	146,253	148,455	162,575	11.16%

Source:  CTMA and AAFC.

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4.2. Turkey Quota Allocation

 

Each signatory province in Canada obtains a share of the national allocation. The CTMA sets the national allocation which encompasses the primary breeder, multiplier breeder, export and commercial quotas. The national allocation, and its components, are set annually and revised during the quota production year. Each province commits to produce a quantity corresponding to its periodic quota allocation without exceeding it. In 2006, the 2007/2008 provincial turkey allocation was set as depicted in Table 8 below.

 Source: CTMA

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4.3  Number of Farms in Canada and Farm Size

 

The overall number of turkey producers has remained relatively stable over the past 20 years, however there was a slight increase in the number of producers in 2006 (557) compared to 2005 (543). In 1986 the number of turkey producers stood at 567 while 2006 figures report 557 producers or a decline of 1.8%.

The majority of turkey producers are located in Ontario, with 186, followed by Quebec, 135, and British Columbia and Manitoba both with 64.

Farms have also become larger: over the same 20 year period, average production per farm grew by 61%, from 181,690 kg (eviscerated weight) in 1986 to 291,876 kg (eviscerated weight) in 2006. With regards to the amount of live birds per farm, in 1986 the average farm maintained 43,278 birds while 2006 figures stand at 54,327 birds per farm or an increase of 26%.

Figure 2 - Number of Registered Turkey Producers in Canada

Source: CTMA

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4.4. Price Mechanism and Price Paid to Producers

Although CTMA formulates and updates a national cost of production formula, prices paid to producers are set at the provincial level. The cost of production formula is used only as a guide and often must be disregarded when negotiating prices. The price of turkey must be competitive with other meats and turkeys from other provinces.

For example, in Ontario, the Turkey Farmers of Ontario (TFO) have price-setting authority. It sets prices for broilers, hens and toms in the province on a weekly basis. In practice, input comes from processors, especially Ontario Poultry Processors' Association's Turkey Committee (OPPA). Pricing decisions can be appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal for a binding decision.
The basis for the pricing decisions is the weekly feed and poult costs determined by the CTMA. Other factors such as market conditions (stocks, wholesale prices, consumption data, margin etc.) and the price of competitive products are also considered. Prices are set weekly.

In 2006, the average price to producers for hens was $1.44 per kg (Figure 3).  Provincial prices tend to follow the same trend over time.  During the same year, prices averaged $1.37 per kg in Montréal while it was $1.44 cents per kg in Toronto and $1.43 cents per kg in Vancouver.

For toms (Figure 4), the price paid to producers follows the trend of hen prices, but prices per kilogram are generally higher compared to hen prices.  In 2006 the average Canadian priced paid for toms came in at $1.48 per kg with prices in Montréal averaging $1.48 per kg compared to $1.46 per kg in Toronto and $1.44 per kg in Vancouver.

Figure 3 - Average Annual Producer Prices for Hens (over 5.4kg & under 9kg)

 Source: AAFC poultry section

 Figure 4 - Average Annual Producer Prices for Toms (9kg & over)

Source: AAFC poultry section

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4.5  Farm Cash Receipts

 

Farm cash receipts measure the gross revenue of farm businesses in current dollars.  They include sales of crops and livestock products (except sales between farms in the same province) and program payments.  Receipts are recorded when the money is paid to farmers before any expenses are paid. 

According to Statistics Canada, supply-managed commodities accounted for 40.6% of total livestock revenue in 2006.  Receipts for eggs and turkey grew (2.4% and 2.5% respectively), while revenues from chicken and hens declined 4% compared to 2005 figures.  In 2006, Canadian turkey producers generated farm cash receipts of $278 million, an increase of 2.5% compared to the previous year.

Farm cash receipts were $127.2 million in Ontario followed by Québec ($56.4 million), British Columbia ($31.9 million), and Alberta ($23.8 million).

Figure 5 - Turkey Farm Cash Receipts, 1986 to 2006

Source: Statistics Canada – Catalogue no. 21-011

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4.6. Farm Financial Situation

In 2005, the number of farm operators in the poultry and eggs sector totalled 6,920.  Despite the downward drop in number of farm operators between 2003 and 2004, the number of farm operators rebounded in 2005 with a 2% increase.

The average net off-farm income increased 16.1% between 2001 and 2005 while average net operating income increased 51.2% over the same period.  Overall, the total net income increased from $87,975 in 2001 to $120,165 in 2005 or an increase of approximately 36.5% over the period.  In 2005, the average off-farm income reached $42,548 which represents about 35.4% of the average total income.

Table 9 - Average off-farm income, net operating income and total income of poultry and egg producers in Canada

		2000	2001	2002	2003	2004	2005
Number of Farm Operators	Number	6,450	6,580	7,100	7,090	6,790	6,920
Number of Farms	Number	4,275	4,205	4,465	4,470	4,245	4,400
Average off-farm income1	$	33,253	36,649	36,935	39,297	40,343	42,548
Average net operating income2	$	49,602	51,327	51,102	50,616	64,261	77,618
Average Total Income	$	82,855	87,975	88,037	89,913	104,604	120,165

Source: Statistics Canada, «Statistics on Income of Farm Operators», Catalogue no. 21-206-XIE, Table 2-10.

In 2005, when compared to other livestock sectors (i.e. beef, dairy, and pork), the poultry and egg industry was the healthiest with regards to total income for the average operator. The average net operating income coming from farm operations is also the highest in the poultry and egg industry. The second highest average total income reported is found in the pork industry, with an average total income of $85,029.

 

Figure 6 - Average Farm Income in the main livestock sectors (2005)

Source: Statistics Canada, «Statistics on Income of Farm Operators», Catalogue no. 21-206-XIE, Table 2-7, 2-8, 2-9 and 2-10.

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4.7 Producer Support Estimates

The Organisation for Economic Co-operation and Development (OECD) Producer Support Estimate (PSE) is an indicator of the annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers. It is measured at the farm gate level, arising from policy measures which support agriculture, regardless of their nature, objectives, or impacts on farm production or income.  In other words the PSE is the support to producers with regards to the total value of production. 

According to the OECD, between 1986-88 and 2002-04 the producer support to the poultry sector in Canada went from 18% to 5%.  In 2002-04, the OECD countries that provided the most support to their poultry producers were in order:  Switzerland (85%), Norway (73%) and the Czech Republic (50%).  The United States, which is a major player on World markets for poultry products, had a PSE of 4%.

Figure 7 - Producer Support Estimate (PSE) for Selected Countries, 1986-88 versus 2002-04

Source:  OECD, PSE/CSE database 2005.

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