BC Eggs for
Processing
Program
Project Description
September 8, 2015
Background:
Historically, the industrial egg market has been used to remove surplus eggs from the market in order to
maintain stability, allowing growers to supply the table egg market in times of higher consumer demand
and remove excess eggs when demand is low. The industrial egg market has experienced considerable
growth and now makes up 25-35% of the total egg market.
The Table Egg Market has always been the first priority for eggs with the industrial products market
receiving the surplus and/or under-grades. As the industrial market has grown, the processors have
been required to source eggs from out of province as well as out of country. The Eggs for Processing
Program was developed to help supply the industrial products market with quality eggs without shorting
the table market.
Objective:
Through the Eggs for Processing Program, BC producers will receive supplemental quota in the amount
of 100,000 layers from Egg Farmers of Canada to supply the industrial market. This supply cannot enter
the table market and must be in addition to the IP program.
Based on a Rate of Lay of 25.44 dozens per hen, BCEMB is required to supply 169,900 boxes of 15 dozen
annually to Vanderpol’s Eggs which is an average of 3,262 boxes per week. BCEMB is subject to
quarterly audits by EFC and must be able to keep track of the EFP eggs by volume and weight. BCEMB
must also ensure that Vanderpol’s Eggs receives an average yield weight during the year which is at least
equivalent to the average yield weight of the IP shipments in BC.
Methods:
Quota Issuance
On April 7, 2015, the Board notified producers that there was a quota increase in the amount of 6.5%
with 3.8% that being supplemental EFP quota. Producers are required to respond to the Board with
whether or not they have space for the quota. If a producer replies that they have the space for the
entire quota, it is issued. As most producers will be unable to utilize the increase at the time it is issued,
they are given three options with regular quota:
1) Reduce the current quota credit usage; or
2) Apply for quota credits for short placement for up to six months; or
3) Apply for a levy abatement for up to six months.
As EFP is supplemental quota, producers' options will be different for this issuance. Firstly, growers are
required to place all 6.5% at once. This will reduce any potential problems where a grower might decide
to delay placing the EFP portion of the quota in favor of the regular quota. Secondly, we will be issuing
the quota (EFP and regular) at time of 19 week placement, or with a corresponding reduction in quota
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credit usage, so growers will be unable to collect quota credits on the 2.7% regular quota. This will
encourage producers to place as soon as possible.
The statement upon confirmation of space for this quota will be:
Thank you for confirming your eligibility for the quota. A 6.5% increase to your quota in the
amount of ____ will be issued to you upon placement of the hens in your lay barn. Please
provide details as to when you expect this to happen. If you are unable to utilize the
increase in your quota at this time due to barn space, please provide details as to what your
plan is and when you expect to place the additional hens.
The statement upon issuance of this quota will be:
Thank you for confirming your eligibility for the 6.5% quota increase. As EFP is not
applicable to levies, the 3.8% will not be reflected on your producer statement but the
amount communicated to you earlier this week has been issued and is being tracked
internally. Please be aware that your levy rate will increase by the 2.7% issued to you
effective Week 18, 2015 and will be reflected on your producer statement.
Barn Space
There will be some producers who are unable to take the increase due to being short of space. At this
time, staff is requesting that these producers provide a written plan to the Board with a time frame as to
how they plan on meeting the space requirements. If producers can expand their egg production units
and place the additional hens within a reasonable time frame (545 days or 18 months), the quota will be
held by the BCEMB and issued to those producers once they are space compliant.
At this time, Board policy is that producers must be able to place the entire amount prior to it being
issued. This reduces the likelihood that a producer will place the regular quota and hold off on placing
the EFP quota.
Ramping up Production
It will take approximately 18 months to ramp up production to 100,000 layers. Throughout this time, it
is important that the BCEMB keeps track of how many layers are in production in order to send the
appropriate amount of product to Vanderpol's. The BCEMB also needs to communicate the flocks that
are currently producing within the EFP program with Vanderpol's, Island Eggs, and Golden Valley as their
flock accounting will be different.
Producer Payments
Producers will be paid table price for all production; however they will be invoiced monthly for the
Equalization Fee on their EFP allotment. This will apply to all producers, even if they are not actively
shipping product to Vanderpol's. In cases where the whole flock is shipped to Vanderpol’s, we would
use the weight and volume category values for the last actual grade out.
The BCEMB will be charging all producers who plan on utilizing EFP quota the EFP Equalization fee as of
October 1, 2015 in order to encourage increased production as quickly as possible. This would also build
up the reserve fund to help buffer the cost of the program.
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EFP Price
Vanderpol's will pay BCEMB the calculated price average of the Urner-Barry and feed based prices for
the relevant size and grade of eggs as posted by EFC for the EFP program, plus an agreed upon premium
for any specialty product. The difference between these two prices will be made up for by charging the
producers an EFP Equalization Fee.
EFP Equalization Fee
The EFP Equalization Fee is made up of the Price Differential, Administration Fee and Levies. This will be
invoiced to participating producers on a weekly basis and be automatically deducted from the payment.
The administration fee will be $0.02 per dozen to cover the freight and other program costs. The Levy
will be equal to the amount of the combined BCEMB + EFC Levy. The Price Differential will be equal to
the table market price for caged white minus the levy and EFP posted price. The Board will assume that
each EFP hen reported as placed by each producer is in production and is producing at the standard rate
of lay (25.44 dozens per year). The total Equalization Fee to be invoiced will be calculated on a weekly
basis based on EFP hens*25.44/52*Equalization Fee.
Example – Week 16
Example – Week 25
Supplying the Processor
Board staff will work closely with the Processor and Grading Stations to ensure that all parties are aware
of when a producer begins utilizing their EFP quota and what those quantities are. Staff will also work
with all parties to ensure that the product levels are as consistent as possible. The program allows for
some flexibility where all parties can plan for periods of high table egg consumption and balance that
out with the Processor’s needs (increase shipments to processor for a short period of time followed by a
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decrease as product is diverted to table market). From time to time, flocks may be required to ship
product to the processor during peak periods in order to balance the weights and volumes.
The Registered Grading Stations will pick up the EFP Product with their regular farm pick-ups and deliver
the EFP portion to the processor on a weekly basis, ensuring that the average weight yield for product
shipped to the processor is at least equivalent to the average yield weight of the industrial product
shipments for BC. This needs to balance out quarterly.
Smaller grading stations will ship their required amounts on an annual, semi-annual or quarterly basis,
or with their IP shipments. These Registered Grading Stations would have to ensure that they ship the
appropriate number of boxes annually.
The Board recognizes the increased labor involved in picking up the product and will pay the registered
grading stations $0.015 Zone 1, $0.0225 Zone 2 and $0.03 Zone 3 per dozen on the weeks that the
product is delivered to the processor.
The Board will pay the freight costs for those Registered Grading Stations outside of the Fraser Valley to
ship the EFP product to the Processor.
The processor has requested that 1/3 of the product shipped through this program be cage free.
Administration:
For the BCEMB
BCEMB will track EFP program information by keeping an excel workbook, updated on a weekly basis, of
all EFP bird placements, counts, production, payments and fees.
On a monthly basis, BCEMB will compare EFP production as reported by all graders to the EFP product
received at the processor and determine if the average weights and volumes of graded product and EFP
product is the same. If the averages are different, BCEMB will work with the graders to ensure that this
is rectified.
For Producers
An invoice will be emailed to the producer on a weekly basis for the Equalization Fee. The fee will be
deducted from their following week’s statement and will be calculated based on the number of EFP
Hens assigned to that producer.
For the Processor
The processor will be required to report all EFP product received at the grading station in the same
format that the IP product is reported.
For Graders
Graders will be required to ship product to the processors on a regular basis. This will be weekly for
larger grading stations. They will continue to report in their current manner.
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