Chicken Farmers of Canada told federal members of Parliament that producers have faced a “sharp decline” in sales as a result of a significant drop in food services, which represents roughly 40 percent of their market.
CFC chair Benoît Fontaine spoke during a virtual meeting of the agriculture committee on May 29.
He told MPs that farmers and processors were left with a surplus in production for a short period of time at the onset of the COVID-19 crisis, but the supply-managed industry was able to quickly change its production levels to avoid a “worst case scenario” that would have resulted in having to destroy birds to reduce flocks.
The industry dropped its allocations from May to July by 12.6 percent, and plans to reduce production by 11 percent throughout July and into early August.
“This choice was done under our own initiative in order to act responsibly and satisfy Canadian demand without too many surpluses,” he said in French, noting processing plants have reduced volumes to make way for physical distancing measures while combating absenteeism and some temporary plant closures.
Fontaine raised concerns over the value of flocks not being covered under current federal financial backstops. He contended that most government-funded programs only offer support to the industry when there is a major depopulation of flocks — but only to help cover the costs of euthanasia and not the overall value of the flock.
Jean-Michel Laurin, president and chief executive officer of the Canadian Poultry and Egg Processors Council, said continuing to operate has had “significant financial impact on our sector.”
He said more than $87 million was spent in March and April on mitigating the impact of COVID-19 within member facilities, while at the same time having to adapt to market disruptions.
“Because of the severe market correction, in poultry specifically, wholesale prices have dropped significantly since the beginning of the crisis,” he said. “What we want to stress is that this perfect storm creates vulnerabilities within our supply chain.”
While a fund of $77.5 million has been created by the federal government to help processors mitigate the impacts of the pandemic within their facilities, that money is not easily accessible because of certain eligibility requirements, according to testimony at the committee. Concerns continue to be raised that that available funds won’t be enough for Canadian agri-food processors.
“We can’t ask for reimbursement on disposable masks; it has to be reusable masks, and that will add to the costs,” said Canadian Poultry and Egg Processors Council chair Joël Cormier, noting his workers require disposable masks. “We’re trying to protect workers here. Masks are absolutely needed. Washable ones are not good enough in this sector.”
Laurin said many companies began installing protective devices in February, before federal assistance dollars were available to do so.
“We’d like to ensure that there could be reimbursement or compensation retroactive to things done before (the federal dollars were made available),” he said.
Like others in the processing industry, Cormier raised concern over not qualifying for certain wage supplements being made available by Ottawa.
He said processors are not eligible for salary supplements because production has held steady even though demand for eggs and poultry has dropped. Production couldn’t be decreased in time for processors to qualify for the supplement.
Representatives from Grain Growers of Canada testified at the same meeting, calling for changes to business risk management programs.
During his testimony, Rory McAlpine, senior vice-president of Maple Leaf Foods Inc., looked to the future in calling for a forensic look at food systems to be completed by an independent body after the pandemic.
“There needs to be at least one inclusive, evidence-based post mortem or lessons learned,” he said, adding federal and provincial officials should be instructed to participate fully in such a study.
He suggested that report needs to ask why Canada did not have a cross-agency business continuity plan for food in place prior to the pandemic.
Meetings of the committee will continue to take place regularly until Sept. 21.