Overview of the Alberta Poultry Industry

Structure of the Industry

Who are the players in the Alberta Poultry Industry?
There are four producer organizations that manage poultry production in the province:

• Alberta Chicken Producers
• Alberta Turkey Producers
• Alberta Hatching Egg Producers
• Alberta Egg Producers

How supply management works - There are three main pillars of supply management:
a) Ability to establish price
b) Ability to establish production controls (quota)
c) Effective import controls

If any of these three conditions were removed, the supply management system would be ineffective.

How much poultry and eggs do Canadians eat?
Table 1. Per capita consumption of poultry in Canada^[ii]

	1977	1987	1997	2002
Eggs (dozen)	18.3	16.1	15.1	15.4
Chicken (kg)	14.4	21.1	24.9	30.6
Turkey (kg)	3.9	4.1	4.3	4.3

Alberta’s chicken industry has been growing at approximately 6% (compounded) per year between 1992 and 2002. Total per capital chicken consumption in Canada has increased 37.2% in the same time period.  Total per capital meat consumption increased by 5.2% between 1992 and 2002.  In comparison, US per capita chicken and meat consumption has increased by 23.5% and 6% respectively.
 
Figure 1. Per Capita Consumption of Poultry in Canada and the United States¹

Total farm cash receipts for the Alberta poultry and egg industry have increased from $36M in 1971 to $187M in 2002^[iii].  Three quarters of farm cash receipts in 2002 were linked to poultry meat, with the remainder linked to table eggs and hatching eggs (chicks and poults).   Poultry represented approximately 3% of Alberta’s total farm cash receipts in 2002. 

Annual Poultry Production in Alberta
Table 2 summarizes the annual production of poultry in Alberta.  The broiler, laying and turkey industries are supplied by 4 major commercial and 4 smaller hatcheries.^[iv]

Table 2. Poultry Industry Statistics, Alberta 2003

	Registered Producers	Annual Capacity*	Average Farm Size	Comments
Alberta Egg Producers	169	1,588,111 layers 36,712,632 doz	9500 hens	Flocks of 300 birds or less may be exempted from quota regulations.
Alberta Chicken Producers	290	83,970,000 kg (eviscerated)i*	394,000 kg/yr (live)i	Marketing exemptions for individuals who market less than 2,000 birds annually, or communal farms which market less than 6,000 birds per year
Alberta Turkey Producers	59	12,857,000 kg (eviscerated)[v]	217,915 kg/yr (eviscerated)v	Marketing exemption for individuals who market less than 300 birds annually.
Alberta Hatching Egg Producers	42	589,411 breeders[vi]	14,034

*  Quota holders only (exempted production not included)
** Operating at 100% of quota produces 0.370 kg per quota unit per week.  Most regular growers are now growing 6.5 crops per year (8 week cycle).

Alberta Poultry Industry Issues

World Trade Organization (WTO) Talks
The current round of trade talks are focused in three main areas:
a) market access
b) domestic support
c) export subsidies^[vii]

The goal of the WTO is to provide fair and equitable access to markets between the member countries.  The most important consideration for Canada’s supply managed agricultural commodities is market access.  A certain percentage of the domestic supply of a particular product (like chicken) can be imported tariff-free.  Any amounts of product over that amount are subjected to a tariff (238% in the case of chicken^[viii]).  Other poultry products, like eggs, are subject to similar tariffs. 

Domestic support programs are defined as programs that support domestic prices or subsidize production in some other way.^[ix]  Countries (like the US or the European Union) that provide these types of programs encourage over-production, which in turn squeezes out imports to those countries. Those countries may also subsidize exports, which can lead to low priced dumping on world markets.

In the last round of talks in Cancun in September of 2003, the United States and European Union suggested that tariff reductions and caps on tariffs be a part of the final trade agreement.  The draft declaration under discussion in Cancun would also allow the US and the EU to continue subsidizing their producers through domestic support or export subsidies. 

What would that mean for Canadian poultry producers?  Tariff caps or reductions would weaken one of the pillars of supply management – effective import controls. The Canadian market could potentially be flooded with cheap, subsidized agricultural products, eroding Canada’s system of supply management.

The WTO talks in Cancun in 2003 concluded without consensus.  Canada’s egg, poultry and dairy producers have banded together to present a united front on the benefits of supply management. They want to promote the idea that supply managed commodities provide market access in a reduced risk environment.^[x]

Antimicrobials in Poultry Production
 Antibiotics are currently fed on a routine basis to most broiler chickens and turkeys. The benefits include prevention of diseases (especially necrotic enteritis) and improved growth rates. Although the problem has equally significant roots in inappropriate prescription of antibiotics for human use, there has been legitimate public concern about the potential development of microbial resistance from preventative use of antibiotics in livestock. According to the Health Canada website:
“Antimicrobials are prescribed and used therapeutically for the treatment of diseases in both humans and animals. Antimicrobials are also added to the feed of food-producing animals to promote growth, to increase feed efficiency and to prevent infections, making for safer and more affordable food products.”^[xi]

At this time, Health Canada has no plans to ban the use of antimicrobials as growth promotants.  However, the European Union has banned the use of avoparcin, bacitracin, spiramycin, tylocin and virginiamycin as growth promtants.^[xii]  This precedent has led some to believe that a ban on antimicrobial may occur in Canada.

Health Canada is continuing to monitor the situation. The Health Canada website states that:
“The Veterinary Drugs Directorate is responsible for the approval of veterinary antimicrobials in Canada and is supporting surveillance activities to evaluate possible public health impacts of the use of antimicrobial growth promotants (AGPs). Evidence from the surveillance data is currently being collected and analysed and will be crucial in the development of new policies and approaches.” ^xi

Recognizing the potential impact of an antimicrobial ban in Canada, the Alberta Chicken Producers sponsored a one day symposium on alternatives to antimicrobial use in poultry in March 2004.  The symposium addressed some important topics with regards to the use of antibiotics, the possibility of using alternatives to antibiotics on farms, and their impeding effects on chicken and other poultry products.

Avian Influenza
What is Avian Influenza? - The Canadian Food Inspection Agency (CFIA) has the following description of avian influenza:

“Avian influenza (AI) is a contagious viral infection caused by the influenza virus Type "A", which can affect several species of food producing birds (chickens, turkeys, quails, guinea fowl, etc.), as well as pet birds and wild birds. AI viruses can be classified into two categories: low pathogenic (LPAI) and highly pathogenic (HPAI) forms based on the severity of the illness caused in birds, with AI causing the greatest number of deaths in birds. Most AI viruses are low pathogenic and typically cause little or no clinical signs in infected birds. However, some low pathogenic viruses are capable of mutating into highly pathogenic viruses. There are many influenza subtypes, two of which include H5 and H7. Historically, only the H5 and H7 subtypes are known to have become highly pathogenic in avian species.”^[xiii]

AI is a reportable disease, any suspected cases must be reported to the CFIA.  The CFIA is responsible for testing, quarantining affected areas and depopulating infected or suspected flocks. At the time of this writing, the outbreak of AI in the Fraser Valley of British Columbia had resulted in the decision to depopulate 19 million birds on April 5, 2004.  Drastic measures were necessary since earlier efforts to stop the spread of this highly contagious virus were unsuccessful. 

How does Avian Influenza in BC impact Alberta’s poultry producers? - Alberta’s poultry producers had implemented stringent bio-security practices prior to the AI outbreak in BC.  Mandatory participation in the On Farm Food Safety Assurance Program became effective for Alberta’s chicken producers on April 1, 2004.  The Alberta Egg Producers, Alberta Turkey Producers and the Alberta Hatching Egg Producers have also implemented bio-security programs.  The fast spread of the AI virus in BC prompted Alberta’s poultry producers to step up their bio-security programs.  Visitors are not allowed on most farms.  Industry service people (e.g. feed representatives, veterinarians) visit farms only if absolutely necessary. 

How would an Avian Influenza outbreak affect Alberta’s Producers? - In the event that Alberta had an AI outbreak, affected areas would be placed under quarantine.  The CFIA would place restrictions on the affected farms and surrounding area.  Similar to the BC situation, infected flocks and flocks within the hot zone would most likely be depopulated. Producers would receive compensation for flocks that must be depopulated.  The compensation structure only accounts for the current market value of the bird. Compensation by the CFIA does not account for future revenues from that bird. 

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