The decision to cut an upcoming national broiler allocation by 12.6 percent will hit hatching egg producers hard.
Drew Black, executive director of the Canadian Hatching Egg Producers (CHEP), said about 16 million eggs won’t be needed as a result of the decision by Chicken Farmers of Canada.
The CFC board recently decreased production in the allocation period that begins May 10. That will cut production from 285 million kilograms live weight to 249 million kg, and it means fewer chicks will be placed in barns.
The board was meeting again this week to talk about the July allocation, which could affect another eight-week period.
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CFC director of brand and communications Lisa Bishop-Spencer said broiler producers have been affected by lack of demand at food service and restaurants since COVID-19 restrictions came into force, although retail demand remains strong.
“The impacts are being felt at all levels,” she said.
The 12.6-percent decrease will play out across the country as each provincial association manages its own producers.
“As far as we know, we don’t anticipate any issues of supply,” Bishop-Spencer said.
There are about 2,800 chicken producers operating under supply management, with Ontario and Quebec leading production.
Black said CHEP’s 240-plus producers set their allocations once a year and do a final determination in July. They were looking at a stable market for 2020.
“In essence 12 percent of our market just evaporated for at least this eight-week period,” he said.
Flocks are already in production and producers have put the money into raising the birds that provide fertilized eggs for hatcheries.
In the short-term, flocks that aren’t performing as well as others might be stopped early and the eggs not sent. There is also the opportunity to delay placement of a few new flocks, Black said.
“That might buy us a week or couple of weeks,” he said. “Over the course of an eight-week period these steps won’t take up that full amount.”
Birds will have to be culled and provinces will have to decide if flocks are placed or not. Depending on where producers are in the yearly cycle, and the age of their current flocks, some will be affected more than others.
“Certainly some producers are going to lose money off this,” he said, adding it represents millions of dollars in farm cash receipts.
“There has to be some mechanism put in place to ensure that a producer is able to recoup that.”
He also said the problem with cutting supplies too early is that could affect future production if restaurants re-open and demand goes up again.
The hatching egg industry is also subject to import requirements under trade rules that “easily fill 20 percent” of the market and restrict the industry’s flexibility in a time like this, he added.
The poultry processing sector has been affected by the closure of Maple Leaf’s facility at Brampton, Ont., due to COVID-19, but birds were re-routed to other plants, said Bishop-Spencer.
karen.briere@producer.com
