The Canadian turkey market is operated under a system referred to as “supply management” or “orderly marketing”.
Under this system, farmers work together to match what they grow with what consumers need and want. Consumers get good value for their money: a reliable supply of quality food at reasonable prices. Farmers receive their returns from the marketplace, without relying on subsidies or taxpayer dollars. The Canadian market is also open to a predictable level of imported food.
- The System works:
- By matching production to market requirements, the system is able to satisfy consumer demand.
- Farmers earn a fair return over time, allowing them to re-invest in their farms and upgrade their operations.
- Canadians enjoy safe, high quality turkey products at reasonable prices year round – from Canadian farms.
The system is founded on three critical and equally important pillars. If one pillar is weakened, supply management as a whole is weakened.
- Production Planning Pillar
- Turkey farmers plan their production to produce a steady supply of quality food that efficiently reflects changes in consumer demand. This prevents sudden price shifts as products move from farm to plate. Quotas for the amount of turkey grown are administered by regulation at a provincial and national level.
- Import Controls Pillar
- Farmers need to know how much turkey is being imported, so they can plan their production to meet Canada’s needs without creating a surplus. The Canadian Government, through various trade agreements, has committed to managing the volume of imports allowed into Canada. This is accomplished using a two-tier tariff regime called a Tariff Rate Quota (TRQ). Imports within the quota enter the country tariff-free, while a higher (over-quota) tariff rate is used to discourage and prevent imports above the pre-determined level.
- Producer Pricing Pillar
- In Canada, farmers in each province collectively negotiate minimum farm-gate prices for turkey with processors through their Provincial Marketing Board. Prices are based on production costs (feed and poult primarily, as the day-old bird cost and feed cost represent approximately two-thirds of the price paid to farmers for a live turkey) and market conditions, including consumer demand, turkey meat inventories (how much turkey meat is on hand in the marketplace) and prices for competing meats.
This orderly marketing system is funded by a levy that is paid by the turkey farmers on each kilogram of turkey they market.