Why is the CFO Board making allotment adjustments?
It is the Board’s principle that no individual farmer-member should benefit or be disproportionately disadvantaged because of COVID-19. All farmer-members should equally participate in the national response (adjustments) due to changes in market demand. After careful review and analysis, further allotment discrepancies from the A-164 allotment have been determined and will be remedied in A-168.
Why was an adjusted allotment issued to farmer-members on January 12, 2021?
The second wave of the COVID-19 pandemic has challenged Ontarians in many ways.
The CFO Board continues to be responsive to public policy and public health provisions from all levels of government.
SECOND WAVE’S IMPACT ON THE CHICKEN SECTOR IN ONTARIO
The second wave is significantly impacting the availability of labour in many sectors.
Ontario chicken processors have informed CFO that some Ontario processing plants are experiencing increasing labour absentee rates – which is adversely impacting plant capacity.
In addition, the expanding stay-at-home orders have impacted the demand for chicken consumed outside of the home. Chicken consumption in the foodservice sector has temporarily declined.
CFO has worked closely with the Ontario supply chain to assess the evolving challenges and to find mitigating solutions.
The Board will continue to monitor the situation closely to ensure that the supply management system responds to challenges and responsibly meets Ontario’s needs.
In an effort to balance supply with demand expectations, Ontario chicken farmers, in consultation with industry partners, have temporarily reduced production effective January 12, 2021.
Allotment have been re-issued to farmer-members for the A-168 quota period. All farmer-member allotments have been reduced as close to -8% as possible.
It is crucial that the entire chicken industry value chain comes together to support the temporarily challenged chicken market.
Are all farmer-member’s January 12, 2021 allotments reduced by exactly -8%?
No. Each farmer-member’s situation is slightly different based on several production planning factors (production cycle, density calculations etc.). Please be advised that all applicable allotments were reduced as close to -8% as possible. Individual farmer-member allotment reduction percentages may vary slightly. The overall reduction is approximately -8%.
What kind of allotment adjustments were made in A-168?
As applicable, in quota period A-168 (starting February 14, 2021), farmer-members will receive a manual adjustment to their allotment stemming from further A-164 allotment discrepancies.
Farmer-members should refer to their A-168 Schedule 1* for more details.
*Farmer-Members who are currently on a No Processor List will receive a Summary of Kilograms (SOK) for A-168 as opposed to a Schedule 1. The SOK will show what their manual adjustment will be in A-168 due to the A-164 correction.
What is the Ontario A-168 allocation?
National allocation for A-168 was set at -2.5% below the adjusted base at the Chicken Farmers of Canada (CFC) meeting on December 2, 2020.
The COVID-19 pandemic continues to be a dominant force causing much disruption to the Canadian chicken market. Much of Canada is engulfed in a much larger ‘second wave’ with escalating levels of cases and shutdowns which will impact market needs in the near to medium term.
There is much hope on the horizon with high efficacy vaccines nearing approvals. However, mass vaccinations cannot be expected to have taken place in time to affect A-168. Consequently, market needs for A-168 are expected to continue being lower than year-ago levels.
If a farmer-member placed chicks on, or in advance of, the January 12, 2021 allotment, are they required to adjust their planned production?
All farmer-members are required to plan A-168 production based on the January 12, 2021 allotment, and need to work closely with all applicable industry stakeholders in order to do so. This is very important and needs to be done in order to support the Ontario chicken market during the pandemic.
Farmer-members who place chicks on, or in advance of, the January 12, 2021 allotment need to work very closely with their processor to ensure the approximate -8% allotment reduction is achieved. Solutions are ultimately based on the individual contracted processor’s market(s). All birds that are fit for loading are required to go to market.
What are farmer-members who have planned placements after January 12, 2021 required to do?
Any farmer-member who places chicks after January 12, 2021 are required to work with their hatchery and processor to assess and adjust their chick order. All chick orders need to be aligned with the January 12, 2021 allotment.
Farmer-members are also required to work closely with their processors regarding targeted marketing dates.
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-167 and A-168, if it is due to a deliberate early marketing, can be regrown in the sixth to twelfth quota periods following A-167 and A-168, respectively.
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-167 and/or A-168 will be regrown over the next 6 to 12 allotted quota periods, respectively.
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.
What if I have a Crop Exception Period (CEP) in A-168?
Farmer-Members with a CEP in A-168 will receive the adjustment in A-169.
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. Home week penalties resulting from deliberate early marketing will be waived for A-167 and A-168.
Will there be any change to penalties for overmarketing of kilograms in A-168 if birds are kept in the barn past planned processing dates?
At this time, all existing regulations pertaining to overmarketing are still applicable.
The COVID-19 pandemic is an unprecedented situation, and the Board of Directors will re-assess the situation as needed.
Does the January 12, 2021 allotment apply to farmer-members contracted with Quebec processors?
Yes. The January 12, 2021 allotment is applicable to all CFO quota holders.
What happens if a farmer-member has a Crop Exception Period (CEP) during A-168?
It is the Board’s principle that no individual farmer-member should benefit or be disproportionately disadvantaged because of COVID-19. All farmer-members should equally participate in the national response (adjustments) due to changes in market demand. CFO will approach the issue of subsequent adjustments at a later time to address any unintended short-term allocation discrepancies between farmers.
What about Market Development Assessments for A-168?
Market Development Assessments for A-168 that were sent to applicable farmer-members on December 30, 2020 are no longer valid.
Market Development Assessments for A-168 will be re-issued. Unless otherwise requested by a farmer-member by January 22nd that their original Market Development cheques be returned, cheques will be destroyed.
How does this reduction affect the allotment adjustments previously made for A-168 stemming from A-164 allotment discrepancies?
The manual adjustments made to relevant farmer-member allotments in quota period A-168 following allotment discrepancies from the A-164 allotment are still applicable.
to review a list of comprehensive FAQs regarding the A-168 adjustments stemming from A-164 allotment discrepancies.
Are all processors participating in the allocation reduction equally?
Due to the unique market situation brought on by the pandemic, we are working to meet individual market needs. Therefore, not all processors are participating in the reduction equally. This variance is necessary to serve distinct markets.
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 ongoing 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 encouraging farmer-members to make every reasonable effort to make a donation for 2021 and support the food banks during this difficult time. Please CLICK HERE
to make your donation if you haven’t already done so.