I'll only speak as fast as I can think, Mr. Chairman.
Thank you, Mr. Chairman, for holding this hearing on the enhanced feed ban and inviting us to advise this committee on the policies we believe Canada's nearly 100,000 cattle producers require.
My name is Brad Wildeman. I'm an elected member of the Canadian Cattlemen's Association. I serve as their vice-president and chair of their foreign trade committee. I am also the president of Pound-Maker Agventures, a 30,000-head capacity feedlot and a 12-million-litre ethanol facility in Lanigan, Saskatchewan.
Along with me is Dennis Laycraft, whom many of you know. He is the executive director of CCA.
I think it's important to begin with the statement that Canada's cattle producers compete in a North American market and that we're part of a long, integrated supply chain. Each piece of that chain relies on the strength and the ability of the next.
While we are supportive of the enhanced feed ban due to come into force on July 12, we also have some concerns. Our colleagues have outlined their concerns in meeting the rigorous demands of the enhanced ban by July. This is further complicated by the failure to date of the federal and provincial governments to work out the agreements necessary to provide the financial incentives intended to assist in making these necessary investments and these operational changes.
All were advised in September 2006 of the urgent nature of completing these agreements quickly or at least ensuring the retroactive eligibility of projects started following July 2006. We know all too well that any measures that slow down their operations will have a negative impact on all cattle producers in Canada. We are already facing very difficult circumstance from losses incurred because of BSE, the appreciating Canadian dollar, labour shortages, escalating labour costs, and the huge increase in feed grain prices driven by government policies towards energy and environment, both in the United States and in Canada. We are told now that we can expect an additional $20 per head for livestock disposal.
Since the finding of the first case of BSE in May 2003, the cattle business has been a challenge. Since that time we have seen just how resilient this Canadian beef industry is. We've increased our slaughter capacity. We've increased our utilization of commercial beef. We've increased our share of domestic consumption and are regaining key export markets. In fact, we were the first country to resume exports after finding a native case of BSE--in one year--and hope to see our North American market return to its integrated pre-BSE state later this year if we're successful with regard to passing and implementation.
In spite of all these gains, the challenges faced by the beef industry in the past almost four years have eroded our competitive advantage over other beef-exporting nations, and we are not without continuing challenges. The industry is still rebuilding, and many of our producers remain in a fragile circumstance. It's critically important that we do not shock this system unnecessarily while we're still recovering. This enhanced feed ban has the potential to do just that if all the parties are not fully engaged in implementing it and complying with it by July 12 of this year.
Today Canada is the largest exporter of grain-fed cattle and beef products in the world. We can compete providing we have a level playing field. While we support enhancing the feed ban, everyone must recognize that it means higher costs for Canadian processors and cattle producers than for our U.S. competitors.
While we hope that over time alternate uses will reduce this cost disadvantage, the stark reality is that they're likely two to three years away. It's vitally important we do not put our industry in crisis yet again. This enhanced feed ban, without further transitional support measures, has the potential to do just that.
Every week Canada slaughters approximately 75,000 head of cattle, with a potential capacity of over 100,000 head. These are sold to beef packing plants in Canada and in the U.S. by feeding companies just like my own. Some are bigger operations, and some are much smaller.
When fed cattle are ready to market, there's a short period of time when they must be processed. Any delay in the time it takes to market fed cattle can cause a backlog in the system, similar to what happened in the early days of the BSE crisis, which resulted in decreased prices for Canadian cattle producers.
Our immediate concern is that if Canadian packing plants are not fully ready to comply with this feed ban by July, they have to either greatly restrict the number and type of cattle they process each day or reduce the number of days they operate. Either way, it will lead to another sharp decline in cattle prices, more cattle and jobs will leave this country, and cattle will be processed in the United States.
Our industry has worked hard to increase our processing capacity, our identification and age verification capabilities, and our global marketing efforts. Cattle producers are also required to play a significant role in implementing changes within their operations to comply with the new feed enhancement regulations. They're preparing to fulfill their specific obligations in ensuring complete implementation of these changes throughout the beef value chain. We must not, however, let our regulatory and government policies push the packing industry out of Canada, or all this effort will be in vain.
We are supportive of at least a two-year transitional program, along the lines advocated by the Canadian Meat Council, while we push forward with the investments and new technologies that will eventually reduce this burden. In the longer term, the competitive impact of this policy needs to be carefully monitored, and further programs may be necessary to offset competitive disparities that may well persist.
We ask for your support in the creation of transition measures to ensure the timely and non-disruptive implementation of the enhancements to our feed policy. This issue reaches outside of federal jurisdiction right down to municipal waste disposal that's already been described. We have seen in the past how this kind of situation can drag out the decision-making process endlessly. This time, Canada's beef cattle industry cannot afford this type of delay. We critically need the federal government to take the lead on this issue, pressing the provinces where needed, and ensuring that Canada is ready.
In closing, when it comes down to it, we are really representing the whole industry with the same message.
Thank you for this opportunity to speak to you. We'll be pleased to answer questions.