PROVIDING FLEXIBILITY TO MEET IMMEDIATE MARKET NEEDS
Farmer-members may be asked to demonstrate flexibility in A-162 by:
- Marketing birds earlier than originally contracted – this will enable processors to supply the market with a more manageable supply of chicken
- Farmer-members must work closely with their processor to enable this flexibility
Click on the questions below for more information.
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Why is the planned production for A-162 changing?
Our industry has observed that, many consumers have adjusted where and what they eat which is resulting in a temporary decline in demand for fresh chicken. In an effort to balance supply with current demand expectations, Ontario chicken farmers, in consultation with our industry partners, will need to temporarily reduce production effective Friday, April 3, 2020.
As a result of the COVID-19 pandemic, how has the chicken market temporarily changed?
The COVID 19 pandemic has materially altered purchasing behaviour in Ontario and Canada. The State of Emergency declared by the Ontario government ended in-person dining in restaurants and resulted in the closure of many food service establishments. The same is true for much of Canada. Restaurants Canada estimates that nearly 1 in 10 restaurants have permanently closed and 53% 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 retail channel continues to operate and the initial response by consumers was panic buying of chicken which led to a surge in demand. The retail pattern is now shifting and the center of store with non-perishable foods is seeing greater demand than foods such as meat. Currently, the demand for chicken at retail appears to be lower than pre-pandemic levels. While the situation is considered temporary, currently there are concerns of excess supply of chicken.
Will farmer-members have the opportunity to regrow the full amount of any underproduction resulting from a deliberate early marketing?
Under the CFO production rules, farmer-members that experience an under marketing are generally able to regrow up to 10% of the under marketing one year later, with the regrowth of the under marketed portion being spread over two quota periods. However, to accommodate the challenges of the COVID-19 pandemic, the entire amount of the under marketing that occurs in A-162, if it is due to a deliberate early marketing, can be regrown in the sixth to twelfth quota periods following A-162.
Will farmer-members have the opportunity to regrow the full amount of any underproduction resulting from any reason other than a deliberate early marketing? For example: disease.
No. Normal and existing regulatory provisions apply for any underproduction that is not a deliberate early marketing (i.e - farmer-member and processor agree to pull birds early due to COVID-19).
How will regrowth of the undermarketed kilograms be applied?
Kilograms undermarketed in A-162 will be regrown over the next 6 to 12 allotted quota periods.
Do farmer-members have to notify CFO if their processor requests a deliberate early marketing?
No. CFO requires processors to track and pre-report all proposed shipments of birds that have an adjusted processing date due to a deliberate early marketing.
If a farmer-member’s contracted weight category changes due to a deliberate early marketing, will they still be paid the weight category farm-gate minimum live price by the processor?
There has been no change to the General Regulation that states that the processor shall pay the farmer-member the greater of the live weight category price or the Form 101 weight category price.
If a processor moves a farmer-member out of their grace week as a result of deliberate early marketing, will the farmer-member receive a home week penalty?
No. Any home week penalties will be waived for A-162.
Will there be any change to penalties for overmarketing of kilograms in A-162 if birds are kept in the barn past planned processing dates?
All existing regulations pertaining to overmarketing are still applicable.
Do these interim measures apply to farmer-members contracted with Quebec processors?
Yes, these interim measures apply to all CFO quota holders.
How is CFO supporting food banks during COVID-19?
The CFO Cares: Farmers to Food Banks program is continuing to provide fresh, locally-grown chicken to food banks across the province.
During this unprecedented COVID-19 pandemic, CFO has temporarily made the program more flexible for food banks – expanding the program to include frozen, prepackaged, and further processed chicken products – in order to provide Premium Ontario Chicken to families and individuals in need.
CFO will continue to work in partnership with Feed Ontario to ensure Ontario’s food banks are supported.
The CFO Board is requesting that any farmer-members who have not yet made a donation for 2020 make every reasonable effort to support the food banks during this difficult time. Please CLICK HERE to make your donation if you haven’t already done so.