We conducted a retrospective study to determine the prevalence of cellulitis condemnations in the Ontario chicken industry and the relative proportion of variation attributable to factors that vary between processors, producers, and lots and over time. The time span studied was April 1998 to April 2001. We obtained condemnation data randomly from the Chicken Farmers of Ontario and analyzed the data with a generalized mixed model. The (weighted) average prevalence of cellulitis in Ontario between April 1998 and 2001 was 0.94% (0.87%, 1.03%). The prevalence of cellulitis ranged from 0% to 14.9%, with one outlier at 30% and 95% of the data between 0 and 2.58%. The final mixed model we used to describe the variation in the prevalence of cellulitis between lots included random effect terms, the plant where the birds were processed, the producer, the quota period when the birds were processed, and the interaction term quota period by processing plant, as well as fixed effects terms, the type of inspection system and the average weight of the birds. The final model containing these variables explained approximately 78% of the total variation in the data. Our findings indicate all three random effects variables accounted for a significant amount of variation in the cellulitis data; however, the greatest source of variation was ascribed to the plants where the birds were processed. Some of the variation in cellulitis associated with processing plants was explained by the type of inspection system used by the plant, but even after controlling for this factor, there remained a relatively large amount of variation between processing plants (approximately 30%). These findings suggest there may be discrepancies in the diagnoses of the condition. Some of the variation in the prevalence of cellulitis (∼13%) was also attributed to the producer; however, more of the variation in the data was attributed to differences in lot-specific factors (∼22%). Therefore, future control efforts for cellulitis should focus on standardizing the classification of cellulitis at processing plants and identifying lot specific factors that may increase the risk of the condition.