Quota for chicken production in Ontario has been cut by 15 per cent in response to a rapid downturn in marketing spurred by the COVID-19 pandemic.
Producers have been instructed by their Chicken Farmers of Ontario (CFO) marketing board to work either with their processor or their hatchery – depending on whether or not they currently have birds in their barns – to adjust production or chick placement effective April 3.
Why it matters: The quota cut represents a significant decline in income potential for chicken farmers, and could be particularly challenging for those who have already invested in chicks and feed.
According to a message to producers on the CFO website, the chicken sector – as was the case for several other food products – experienced a sharp rise in demand at grocery stores in the days immediately following the announcement of a global COVID-19 pandemic. But what the website refers to as “panic buying” has since levelled off, and this was followed by a steep decline in food-service demand as a result of a government-mandated scaling back of restaurant and workplace activities.
“The COVID-19 pandemic has materially altered (chicken) purchasing behaviour in Ontario and Canada,” states the website message.
“Restaurants Canada estimates that nearly one in 10 restaurants have permanently closed and 53 per cent of restaurants are temporarily closed. Drive through and take-out options remain but volumes have declined dramatically. Estimates are that the demand for chicken through the food service channel has temporarily declined by two thirds.”
The quota cut is not applied exactly equally across the sector. “Each farmer-member’s situation is slightly different based on several production planning factors (production cycle, density calculations etc.),” the CFO website message explains, and “allotment reduction percentages may vary slightly.” “Solutions based on the individual contracted processor’s markets.” But the “overall reduction is approximately 15 per cent,” and “all applicable allotments have been reduced as close to 15 per cent as possible.”