I would also like to thank you for extending the invitation to the Fédération des producteurs d'oeufs du Québec. This is the first time I have had an opportunity to participate in this committee, and I am happy about that.
This afternoon, I will talk to you about how our sector has had to adapt since the beginning of COVID-19. Those adaptations have been possible essentially thanks to our supply management system. Fortunately, despite the pandemic's numerous impacts, our system has helped us a great deal, at the end of the day, to mitigate the repercussions and circumvent the challenges we have had to address over the past few weeks.
I will briefly introduce our federation. In Quebec, we produce 1.9 billion eggs annually, and 160 producers that account for approximately 6 million laying hens. Our industry is split into two markets: the market referred to as “table eggs”, which is related to grocery stores and restaurants; and the processing market, which accounts for about 25% of our markets.
The stakeholders are, of course, the farmers who produce those eggs, the graders who wash them and package them for sale, and our processors, represented this afternoon by Mr. Laurin and Mr. Cormier, who handle product processing.
In the first two or three weeks of the crisis—and you have probably heard about this—we had to quickly make a transformational shift concerning our markets. The closing of restaurants has resulted in our graders having to redirect a major portion of the production toward grocery stores. You will understand that packaging is not really the same in that case. We have also had to adapt our marketing. You have heard about empty shelves in grocery stores. We were something of a victim of what is called the “toilet paper syndrome”, where people would grab products in large quantities in fear of running out. When the shelves were emptied, vendors quintupled their orders. They were ordering five times more eggs than the previous week, which posed a major challenge for our graders. We worked together, we communicated and we overcame that stage.
The second event that followed soon after is the aftermath for meat processors. Plants and slaughterhouses also had to adapt. We were told that our spent fowl, our spent chicken at the end of their life, could no longer go through traditional slaughterhouses, as the staff could no longer meet the demand. We had to provide our producers with guidance on slaughtering or euthanasia on the farm. Supply management enabled us to to spread the cost out across industry and avoid causing disproportional impacts on some of our producers.
The good news is that we are now experiencing something of a return to normalcy. We can reassert the value of those carcasses through existing slaughterhouses and turn them into chicken broth. So the situation seems to be relatively resolved.
Finally, let's talk about the third adaptation. In the beginning, the restaurant market experienced a huge drop, while the table egg market was growing. The processing sector was relatively stable. However, after a month, we saw nearly 70% of the processing market collapse. There was no longer any place for eggs. We could no longer send them to processing because they were not needed on the table egg market. To avoid waste, we had to make donations to the tune of 84,000 dozen eggs. We had to spread out those costs to be able to donate the eggs.
We are now at the stage where we have to decrease production by prematurely slaughtering flocks that should have been slaughtered two weeks later in order to prevent us from throwing away our products or producing needlessly. That leads to costs, but the entire sector can share those costs to avoid any bankruptcies or disappearances of small farms in our regions to the benefit of other larger players.
Supply management, combined with programs that were already somewhat planned or are already set up, enables us to stabilize the sector and take care of supply. Our next challenges mainly have to do with U.S. imports. In Canada, we are prematurely slaughtering about 2 million laying hens. In Quebec, we are preparing to send 400,000 laying hens to valorization and processing earlier. We would not want to see U.S. products arriving on our market at the same time, as that would exacerbate the issue right now.
Fortunately, we have solid communications with our importers, graders and so on. However, we also need government assistance to make import rules more flexible. Some flexibility has been added by the Canadian Food Inspection Agency in terms of identification on packaging, which is appropriate. That has been well received. It's a good thing. We would have liked the agency to take things a bit further to give us more flexibility in terms of grades. We wanted Global Affairs Canada to cooperate with producers, importers, graders and processors when it comes to import management.
Currently, we are being told that trade rules require imports. We would like there to be better cooperation and better round tables to minimize the impact. We are not against trade. We don't want to create a war between the United States and Canada. We just want industry, producers and the government to implement the best possible procedures to minimize the impact.