Ontario's egg farmers have a new way of buying and selling quota

Saturday, February 1, 2014

by JIM ALGIE

The amount of quota offered for sale on the Egg Farmers of Ontario’s first-ever electronic, quota transfer sale in March matches volume under the group’s previous, less formal, transfer method, general manager Harry Pelissero said in an interview, Friday.

Egg Farmers had received approved offers to sell 21,407 units of layer quota and 78,058 units of pullet quota by the exchange’s Jan. 23 deadline, an announcement, Thursday, said. Buyers have until Feb. 27 to submit bids for transactions, which close March. 12.

“This is the first milestone as EFO launches a new and improved quota market mechanism for its farmers,” chair Scott Graham said in the statement. The system allows Ontario egg farmers to participate equally in a regularly scheduled market, the statement says.

Previously, farmers bought and sold quota among one another directly. The old system was a bit like land transactions although Pelissero says he dislikes the comparison because real estate markets have multiple listing services that didn’t exist in the egg quota marketplace.

Developed by Université Laval agricultural economist Maurice Doyon and a University of Victoria colleague, Daniel Rondeau, Ontario’s new, egg quota transfer system followed more than three years of research and consultations with growers. It answers concerns among some of the egg board’s 440 members that they lacked adequate information about quota availability.

“If you knew somebody selling quota; that’s how it happened,” Pelissero said in an interview about previous transactions. The electronic system allows quarterly transfers in a “more open and transparent” process that will also publish, completed transfer prices, Pelissero said.

For egg producers, a unit of quota represents a license to market the annual output of one bird, roughly 25 dozen eggs for laying hens. The volume of quota on offer for the March sale “is roughly equal to the old system,” Pelissero said.

The Egg Farmers manager would not comment on recent price trends or expectations about bidding.

The quota exchange schedule for 2014 lists four sales – March 17, June 11, Sept. 10 and Dec. 10 – with earlier deadlines for offers and bids. Following each quota transfer, Egg Farmers will publish details. That includes the established “equilibrium price” which is set by a formula designed by an independent third party agent to reconcile available offers and bids.

“EFO consulted extensively with egg and pullet farmers to design the details,” Graham said. The new system has been designed to provide “a regularly-scheduled market where all buyers and sellers are guaranteed access and can participate on fair and equal terms,” Graham said. BF