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Yukonomist: Eggs and the Yukon consumer

To you, that egg on your plate may be just a simple and nutritious pleasure. To the egg industry, however, it represents big bucks.

To you, that egg on your plate may be just a simple and nutritious pleasure. To the egg industry, however, it represents big bucks.

Some in the Yukon industry are proposing that the Yukon set up its own egg producer regulations, known as “supply management,” like in the provinces and the Northwest Territories.

You can expect a vociferous debate about this.

Industry advocates point to Canada’s system as successfully delivering safe, high-quality and Canadian eggs at stable prices. The point out that the system has resulted in a large number of egg farms scattered across every region of Canada, creating local jobs.

Advocates for low-income Canadians, however, point out that the complex system of import restrictions, minimum prices and production quotas results in higher prices for the 99.9 per cent of Canadians who are not egg producers. Professors Cardwell and Lawley from the University of Manitoba published a study in 2015 finding that the system, across dairy, chicken and eggs, cost poor Canadian households about 2.29 per cent of their income. For poor households with children, the cost was $466 to $592 per year.

Eggs are about 10 per cent of this total. Chicken, milk and cheese represent most of the cost to consumers, with the rest rounded out by turkey, yogurt, butter and ice cream.

Most Canadian politicians tackle this trade-off through careful mental compartmentation. One day, they vote for supply management. The next day, they attend public meetings and express concern about food prices.

The debate also has a regional angle. Here in the Yukon, we historically have produced few eggs. We are not allowed to import cheap American eggs, but instead have to import them at a higher price from a nearby province. Which is nice for, in our case, the producers of the 1.9 million eggs we imported in 2021 from Alberta.

Fortunately, in other categories such as clothing or cars, we are not required to buy only Canadian-made products.

More recently, advocates of the system have pointed out that it helped Canadian egg production stay resilient during the recent avian flu outbreak. This had a devastating impact on the giant American chicken farms, where the disease could spread quickly. Earlier this year, American egg prices skyrocketed to Canadian levels and beyond. Senator Elizabeth Warren called on the five biggest US producers to explain themselves after revenue and profits surged.

The size difference in egg farms on either side of the border is striking. A recent report by the Canadian Press said the average farm in the US had two million chickens, versus just 25,000 at the average Canadian farm. Here in the Yukon, Mandalay Farm, the producer of the tasty Little Red Hen Yukon eggs I had for breakfast this morning, has 4,400 birds according to local media reports.

Even if you don’t like the impact of supply management on the cost of living, these figures highlight the challenge of changing the system now. Giant American farms of this scale would be tough competitors for small Canadian farms if we were allowed to buy as many of their eggs as we wanted.

So much for the theory. How do actual Yukon egg prices stack up? Based on prices as I write this column, here are some comparisons. No Name, Large White Grade A eggs cost 34 cents each at Whitehorse’s Wykes Independent Grocer. The same eggs cost 33 cents at Pearson Independent Grocer in St. Albert, just outside Edmonton. In Calgary, at one of the big chains, the price was also 33 cents. Considering Wykes has to truck eggs up the Alaska Highway, this is pretty good.

Meanwhile, at the Fairbanks Fred Meyer, you can buy large white eggs for 20 Canadian cents. Back in May, during the US egg shortage mentioned above, Fairbanks egg prices spiked to Canadian levels and were selling for 34 Canadian cents.

Krystle Wittevrongel, a senior policy analyst with the Montreal Economic Institute, summed it up this way in an interview with the Canadian Press: “When [Canadian] prices are already among the highest in the world, it’s no surprise that our prices didn’t spike quite as much. It’s easy to maintain more price stability when we have huge, excessively high prices to begin with.”

The St Louis Federal Reserve reports that in April egg prices in major US cities were 37 cents. However, for most of the last five years they were under 23 cents.

This kind of price difference explains why Yukoners visiting Juneau or Fairbanks often chortle about how much Costco cheese they “forgot” to tell Customs about on their way home.

The promising news for Yukon egg producers is that some Yukon consumers are willing to pay extra for local eggs. Little Red Hen eggs cost 62.5 cents at the store yesterday, and they were cheaper than the organic free-range eggs from one of the big Outside brands.

So should we be in favour of the Yukon having its own N.W.T.-style egg control board? One thing to remember is that such boards cost money that gets passed through to food-buying families. The N.W.T. egg regulations impose an administrative cost of 3.4 cents per dozen plus an additional levy of 16.9 cents per dozen. Their Egg Producers Board has six members earning $325 per day of meetings ($400 for the chair). It is impossible to calculate the total spent by farmers, officials, lawyers and others on paperwork for the system. The N.W.T. system even managed to use up some of the Supreme Court’s precious time in a famous case back in 1999 that, in the words of our nation’s most lofty legal minds, covered “Corporate egg producers in Northwest Territories sued by state organ regulating production and marketing of eggs for damages arising from illegal interprovincial marketing of eggs.”

Before the Yukon government adds a costly and complicated system of egg market management to its plate, I suggest they hold off until they’ve solved the shelter crisis, housing crisis, the nurse crisis, the climate crisis and the opioid crisis.

In the meantime, if they want to help local producers, there’s always the time-honoured Yukon economic-development strategy of just giving the industry money. This, at least, avoids any risk of inadvertently raising the cost of food any further for Yukon families.

Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.