June 5, 2020

Canada's chicken production cut by over 50,000 tonnes amid falling demand

As food service demand fell in the wake of COVID-19, Canadian chicken producers have cut production by more than 50,000 tonnes to balance the market, a US Department of Agriculture report said on Tuesday, June 2.

In early May, the Chicken Farmers of Canada said they were lowering their production by 12.6% for May and June and by 11% for July and August to "address the concerns of their value chain partners and give the system a bit more breathing room".

The GAIN (Global Agricultural Information Network) report from the USDA said the drop in chicken meat demand resulting from the closure of the food-service sector was only partially offset by increased demand in the retail sector, leading to increased volumes of chicken meat placed in cold storage and wholesale price declines.

Wholesale prices for whole birds fell by 20%, wings and chicken breasts by 30%, and leg quarters by 45% as of the end of April, the report said, citing industry sources.

Industry sources also indicated that wholesale prices improved in May, although they had yet to return to pre-pandemic levels. This is due partly to demand for chicken meat picking up at the start of the summer barbecue season, when chicken breasts are a popular choice for grilling, the report said.

This year's chicken meat production in Canada is estimated at 1.315 million tonnes, or 1% below the 2019 level.

During the pandemic, several poultry plants were impacted by COVID-19 cases diagnosed among workers. A Maple Leaf plant in Ontario and two smaller poultry plants in British Columbia temporarily shuttered operations.

"Despite the temporary closures, chicken slaughter remained unaffected, as live birds were redirected toward other processing facilities" the report said.