Agriculture and the food system have changed rapidly over the past 10 to 15 years, and it is unlikely that the economic and socio-ecominc drivers behind this pace of change will decline.
Poultry industry research is a vital factor for the Canadian turkey sector in terms of productivity, economics, competitiveness, food quality assurance and general societal concerns about poultry farming and food production (ie. environment, bird care, food safety).
In terms of productivity, it takes 30% less feed today to produce the same amount of turkey meat compared to 30 years ago. This is the direct result of improvements along the supply chain, from enhanced feeding programs and formulations, to management practices on-farm.
Through research, Turkey Farmers of Canada seeks to keep pace with ongoing competitive changes in the Canadian marketplace, maintain the expectations of the Canadian consumer through innovation and excellence in turkey production, and provide a high-quality and healthy product to consumers.
Efficiency Gains in Turkey Production
Innovation in turkey production has led to a number of important efficiency gains and helped to moderate price increases for Canadian turkey.
Technological advances in breeding, feed formulation and management practices have reduced the amount of time that a turkey spends in the barn, which has lowered other production costs such as labour, energy and the capitalized costs of buildings and equipment.
Productivity improvements have also reduced the environmental impact of livestock production.
Improved feed conversions have reduced the amount of land and inputs that are required for crop production and the amount of manure that must be handled. In turn, greenhouse gas emissions, and pressure to convert wilderness to farmland have also been reduced.
TFC Research Strategy
In 2010, the TFC Research Committee conducted an environmental scan to assess the strengths, weaknesses, opportunities and threats presented to turkey research in Canada. Referencing this information, a formal TFC Research Strategy was drafted and approved by the TFC Board of Directors in May 2011.
TFC’s Research Strategy lays out a viable research program specific to the needs of the Canadian turkey industry, from the hatchery to final product, which keeps pace with ongoing changes on-farm and in the marketplace to ensure continued innovation and competitiveness.
The development of the TFC Research Strategy is complimentary to, and partially the result of, work and support from the Canadian Poultry Research Council (CPRC). This national organization, established in 2001 by the five national poultry groups, is devoted to addressing national poultry industry priorities, including:
- Reducing human health risks from entering the poultry value chain.
- Continuing to promote the prudent use of antimicrobials and increasing the use of antimicrobial alternatives.
- Enhancing existing and develop new production systems and strategies to further improve the well being of Canada’s poultry flocks.
- Developing functional and value-added products which enhance the health and well-being of Canadians and meet niche market demands.
Committee members had the opportunity to hear from CPRC Chair, Jacob Middelkamp, and Executive Director, Bruce Roberts, on November 3rd, in the context of the Committee’s study on Growing Forward 2 (Science and Innovation).
Poultry Science Cluster
In the fall of 2010, the Federal Government committed to invest up to $1.8 million dollars in poultry industry research through the Canadian Poultry Research Council’s (CPRC) Poultry Science Cluster initiative.
The funds allocated by the Government have helped to increase Canada’s capacity for poultry research and assisted turkey farmers in addressing priorities and challenges by promoting innovation and fostering national coordination among scientists.
The Cluster involves 20 scientists from four universities, AAFC and Canadian Food Inspection Agency locations, the Vaccine and Infectious Disease Organization (VIDO) in Saskatoon and The National Centre for Foreign Animal Disease (NCFAD) in Winnipeg.
Industry needs the support of government programs to achieve the significant societal benefits that poultry research and innovation bring to Canadians. We recommend that Growing Forward 2 commit sufficient funds to poultry research and innovation to maintain and enhance the capacity of the present system. Programs must recognize the structure of the value chain so that all parts, from primary research to application, are sufficiently funded.
To be a world leader Canada must have world class research facilities and clearly identified objectives. Industry cannot do it alone - government must be involved financially and in capacity building at an institutional level (e.g. science cluster).
One of the five key elements of Turkey Farmers of Canada’s ongoing Business Plan is to probe opportunities and the development of our sector’s value-chain within the context of the TFC mandate and our role in the industry. By addressing challenges and creating stronger production and marketing relationships, we hope to generate and nurture opportunities at both farm and firm level.
TFC Turkey Market Development Committee
TFC has identified the need for a Turkey Market Development Committee and is in the process of developing the Terms of Reference for this Committee, which is expected to begin full operation in early 2012. Committee members will include producers, processors, representatives from the Canadian Restaurant & Foodservices Association and the Retail Council of Canada, as well as a Canadian Registered Dietitian and even a Canadian foodie and/or chef.
The Committee will work toward creating opportunities for our farms and firms by encouraging the consumption of turkey, researching the needs and wants of consumers and foodservice outlets, influencing the retail sector to increase turkey representation in-store, and making recommendations to the TFC Board.
Turkey Nutrient Value Study
In 2008, a comprehensive turkey nutrient value analysis was jointly undertaken by TFC and Health Canada. At that time, the nutrition information for turkey meat on Health Canada’s Canadian Nutrient File (CNF) was primarily out-of-date and sourced from the United States.
Following the completion of the laboratory analysis in the fall of 2009, the new turkey nutrient data was posted to the CNF in October 2010. This updated information is representative of the current offerings in the Canadian marketplace, and is frequently referenced by nutritionists, dietitians, Provincial Commodity Boards, Health Canada and industry stakeholders.
Focus group sessions were held in order to gain better understanding of turkey usage, and barriers to use, and also to gain insight into how turkey can best be positioned to communicate a nutrition message to consumers.
Marketing and promotion, including access to market information, is not inexpensive. Government expenditures in this area are not considered trade distorting and therefore constitute an area where a transparent and easily accessible program could be enhanced (e.g. matching funds).
6. Promotion Activities
The most valuable market for Canadian turkey farmers is the domestic market. Over the last 18 years, the industry has seen the retail market share for further processed products increase from 15% to 22% in volume. More importantly though, in terms of value, sales of further processed products have increased from 33% of sales dollars in 1993 to 56% in 2010.
Canadians have repeatedly said that they want Canadian-produced food and that they support Canadian farmers. In many surveys over the years, they say we should produce enough Canadian food to satisfy our needs, that food produced in Canada is a lot or somewhat better than food produced elsewhere, and that they trust Canadian farmers.
Having been involved in the consultative process with staff from Agriculture and Agri-Food Canada, the Turkey Farmers of Canada have long been aware of the Canada Branding initiative which aims to clearly define Canada as a brand, and highlight the benefits and attributes inherent with products of the Canadian agriculture industry.
As of this month, our Agency has received approval to use the Canada Brand identification in web and email communications to generically promote Canadian turkey and the Canadian turkey industry. The Canada branding identification is now in place in our email signatures and on TFC’s bilingual website, which targets Canadian consumers.
The application process for this was well-ordered and efficient.
Part III Agency
Promotion programs or generic marketing initiatives provide the industry at large with the means to inform consumers about the benefits of turkey meat consumption (e.g. health benefits, nutrition information, taste, quality and other intrinsic characteristics). These programs are paid for by farmers through levies or “check-offs” on their production.
Part 3 of the Farm Products Agencies Act (FPAA) allows for the establishment of promotion and research agencies, under which national research and promotion programs can be developed and funded.
In 2002, Canada established the first such agency – the Canadian Beef Cattle Research Market Development and Promotion Agency. This could be of benefit to the turkey industry as well, as like cattle, it would allow for the extension of the levy paid by Canadian farmers to include imported products. Such a levy on imports would represent a new revenue stream and ensure imports contribute their fair share to such generic activities. TFC is currently pursuing this matter with the Farm Products Council of Canada.
TFC, which is a Part 2 Agency under the Farm Products Agencies Act, will be pursuing the authority to apply a check-off to imports, but without having to create a separate governance and administrative structure. A favourable interpretation from the Department of Agriculture and the Farm Products Council of Canada (FPCC) that a Part 3 agency can be incorporated into a Part 2 agency is required in this regard.
7. Market Segmentation
Market segmentation is an economic concept that in simplest terms means developing a commercial advantage through product differentiation. If done correctly, market segmentation and product differentiation allows the industry to divide end users into groups so that supply and demand and the price relationship of both are in equilibrium.
TFC allocates several classes of quota that are end-use based. The Agency’s Primary and Multiplier breeder quotas are established to cover the marketing of mature turkey meat domestically, but the intent is to ensure that these two segments of the industry, which have a significant export dimension for breeding stock (e.g. eggs and poults), which are not import controlled, can expand or contract in correlation with the international market.
On the domestic side, the Agency allocates quota for whole turkeys which are primarily marketed and consumed during the festive seasons (e.g. Thanksgiving, Christmas and Easter), and are fairly stable markets. The further processing segment, which encompasses raw cut-up parts, deli meats, roasts, niche products, etc., is allocated based on individual processor requests. This market driven approach to allocation is required to service what is seen as the highest value market segment of the industry and that holds the most promise for growth in the coming years.
As Committee members are well aware, the next decade will bring challenges, but also opportunities for the Canadian agriculture and agri-food industry.
As consumers’ tastes change and the demand for more specialty products grows, market segmentation and product differentiation provide opportunities to maximize sales if we can outrace our competitors to deliver these products to the market place. This means having timely information on consumer trends. This brings us full circle to the concepts of value-chain, market research, promotion, food safety, animal care and scientific research addressed elsewhere in this presentation and the role of government in those areas.