Turkey producers swallow quota cut

Tuesday, April 14, 2009

© AgMedia Inc.

by BETTER FARMING STAFF

Sales of whole and processed turkey products at the farm store run by Mike and Wayne Oegema, in Elgin County, have increased both annually and in month-to-month comparisons.

But Oegema Turkey Farms Inc. is going to cut back production by 2,000 birds from the 55,000 they normally raise annually.

The reason? Turkey sales across Canada are down and the national agency,
Turkey Farmers of Canada, has mandated that production be cut by an average of six per cent across all weight categories.

Phil Boyd, executive director of Turkey Farmers of Canada says a growth in inventory signaled the decline in demand that began mid-2008. He attributes the slowdown to escalating farm input costs that boosted wholesale, and ultimately retail, prices at a time when the global economy took a turn for the worst. Provincial organizations set the live price processors must pay producers.

“We’re not particularly unique,” he says. “The meat market right now is in tough shape for a variety of reasons.” Declining consumer interest for higher value cuts or processed products, is one. Boyd confirms an outbreak of listeria that temporarily closed a Maple Leaf Foods processing facility in Toronto is another.

For Ontario’s 192 turkey producers, including the Oegemas, it means coping with reductions in the number of birds they can raise. Mike Oegema credits the buy local movement for the steady trade. They also sell wholesale to a local processor. They aren’t in a position to expand their retail operation in order to direct market all of their birds.

Knowing everyone has to cut production makes it easier to accept. “I’m glad the industry has taken some decisive steps to get this ship going in the right direction again,” Mike Oegema says.

Cuts in quota range from 4.75 per cent to 8.75 per cent depending on the bird weight category. The Oegemas are considering exchanging some quota held in larger bird production for more in smaller birds.

Janet Schlitt, general manager of Turkey Farmers of Ontario, says the listeria outbreak “may have impacted the sales of deli products but did not affect sales of whole birds, turkey parts and turkey products such as ground turkey.”

The reductions are “only temporary,” says Schlitt, and she predicts production levels will rise “once our storage stocks have been reduced.” She did not respond to questions about the live price of turkeys in Ontario.

Boyd predicts markets will recover “somewhat gradually” after next year.

In 2008, Canada’s 548 turkey producers generated 179 million kilograms of product with a farm-gate value of $388.5 million. BF
 

UPDATE: Information provided by Janet Schlitt, general manager of Turkey Farmers of Ontario, shows that live prices for most birds have increased more than 10 cents a kilogram since Jan. 7, 2008. The April, 2009 price of $1.815 for tom turkeys, the largest class, is 8.5 cents higher than in January 2008, but 1.5 cents lower than the price set Dec. 8, 2008. BF