Thank you.
Good morning, ladies and gentlemen, members of the Standing Committee on Agriculture and Agri-Food. We'd like to thank the Honourable Wayne Easter for inviting us here today. My name is Cameron MacDonald. I'm the past chair of the Prince Edward Island Cattle Producers. My colleague is Brian Morrison, a current director of the PEICP.
Our organization represents 450 beef producers in P.E.I. However, today we're also representing the Maritime Beef Council, which is made up of the three beef cattle organizations from Prince Edward Island, Nova Scotia, and New Brunswick.
In the past month we have been busy trying to impress upon our governments the importance of the beef industry to the economy of the Maritimes and the Canadian economy. Beef production is a critical part of agriculture, because it is vital to crop rotation, its manure byproduct is a natural fertilizer, and beef cattle consume excess feed grains, potato byproducts, and forages. Without beef production, all other agriculture is at risk. It makes valuable use of marginal land and converts forage to a valuable product. Beef production contributed $18.8 billion to the Canadian economy in 2008.
Beef cattle production in the Maritimes has severely declined in the past few years. Since 2007, beef cattle finishing has declined 8% each year. The same occurred in the cow-calf production. Comparably, the number of producers in 2007 in P.E.I. was 650. In 2009 this number is estimated to fall as low as 350, a decline of 53%. This decline is having a noticeable effect on the Atlantic Beef Products Inc. plant in P.E.I., the Maritimes' only federally inspected beef plant. Atlantic Beef Products are currently experiencing difficulties sourcing enough cattle to meet their requirements.
In the years since BSE in May 2003, our industry has suffered significant financial losses. The price pre-BSE was as high as $1.94 per pound, dressed weight. Over the past year this price has averaged $1.54. The price is set by Atlantic Beef Products and is based on the Ontario price minus 9ยข per pound. This places Maritimes producers at an immediate disadvantage to other Canadian producers.
Beef production in the Maritimes is very different from that in western Canada. For example, animals in the Maritimes are housed indoors in the winter months, adding extra costs for manure handling and feed storage requirements. Maritime provinces also pay some of the highest electricity costs in Canada. Another example is that by the time the Maritimes cattle go to market, they're traditionally older than those in western and central Canada. This also means we have higher production costs and less cashflow.
Because of these factors we cannot overstress the importance of recognizing regional differences.