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Grilling the livestock industry

Grilling the livestock industry

Most of the Western world, including Canadians, where culinary traditions have embraced animal proteins for thousands of years, may see this announcement as purely alarmist. Perhaps, but demand for processed and red meats have been declining for a number of years now, for a variety of reasons.

Higher prices, health concerns, animal welfare, sustainability, reasons to go against meat consumption are just piling up. The case for animal protein in general is simply getting weaker.

But in light of the recent WHO’s report on meat consumption, industry is showing signs it can change. McDonalds Canada’s decision to procure antibiotic-free chicken, for example, is textbook. As consumers are growing wary about the use of antibiotics on animal farms, McDonald’s Canada is moving forward with antibiotic-free chicken. In March 2015 McDonald's U.S. grabbed headlines by announcing that over the next two years it will phase out serving chicken treated with some antibiotics.

However, McDonald’s Canada’s response was more guarded, stating that it wanted to evaluate purchasing chicken raised without antibiotics as Canada’s farming landscape is strictly regulated by the Canadian Food Inspection Agency. These comments made McDonald’s Canada look ineffective despite the fact that they are likely one of our chicken farmers largest customers. (It is estimated that more than 400 million McNuggets are consumed annually in Canada alone.) After some months of investigation, McDonald’s Canada has decided to go antibiotic-free.

Benefiting from its enormous pull-powered approach, McDonald’s U.S. can do practically anything they feel is right for their business, as long as it sees value in what they want to achieve. It only makes sense in an era marked by supply chain transparency. In Canada though, things are very different.

With supply management, recognized farming practices help marketing boards set farm gate prices so that farmers can make a decent living. By limiting imports with high tariffs and controlling production through quotas, creating an equilibrium between supply and demand is much easier than when operating under an open market. Codes of practice are always challenging in Canada since farmers are continually concerned about how markets would react to higher prices.

We shouldn’t forget that chicken, in essence, competes against other animal proteins like pork or beef. Price points are therefore carefully managed across the food chain.
Farming is often perceived as a very traditionalist economic sector, unlike others. Things are done in particular ways.

And why not? For the most part, things have worked very well for decades for chicken farmers. Antibiotics in chicken farming have been around since the end of the Second World War when protein production became a priority in North America. The use of antibiotics was encouraged to prevent and treat diseases. Ever since, antibiotics have kept animals healthy and prevented losses on farms. In other words, production output is enhanced by the use of antibiotics so that chicken prices remain stable for consumers.

For years, the economic rationale for using antibiotics was legitimately justifiable. But times are changing. With sound research, we know more about the implications of using antibiotics in farming and adjustments are necessary. So in a way, it’s “Back to the Future” in chicken farming.

Essentially, Canadian chicken farmers are demonstrating that supply management can work when pressured to change. But changing the code of practice for supply managed commodities in Canada like chicken is a journey, and a difficult one. The process is slow, but the industry’s effort to align with consumers’ expectations is possible.

The same thing can be said about egg farmers when they decided to partner with McDonald’s Canada a few weeks ago to supply cage-free chicken eggs by 2025. Addressing consumers concerns about animal welfare and their own health was simply the right thing to do. Because of McDonald’s clout and market power, it will be easier for other restaurants chains to echo McDonald’s move and work on new partnerships with farmers. Some have been asking for such a change for years, in vain.

For the most part, McDonald’s commitment to Canadian commodities has historically been ignored. While all the beef, eggs and chicken served by McDonald’s Canada are in fact Canadian produced, McDonald’s in the U.K., for example, procure most of its chicken, from Brazil.

McDonald’s Canada and Canadian chicken farmers should be lauded for building a partnership that works for all, especially for consumers. With more changes to come, let’s hope that more of these partnerships come to fruition.

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