Thank you, Mr. Chairman, and committee members.
I wish to apologize at the start, I am not the eloquent speaker that Patrick is. I always feel embarrassed whenever I have to talk right after him.
My name is Brian Nilsson and I am co-CEO, with my brother Lee, of XL Foods. We are a private family-owned beef and livestock company. We have processing facilities in Calgary; Brooks, Alberta; Moose Jaw, Saskatchewan; Omaha, Nebraska; and Napa, Idaho. We operate on both sides of the border.
It's a pleasure to speak about COOL and competitiveness in the Canadian and North American meat sector. I'm going to touch on a few key points and then I look forward to answering your questions as they come forward.
In our company we believe we have the ability to run world-class facilities and that we can compete with anyone. Our purchase of Lakeside kind of reiterated our thoughts that there should be no shame in being a Canadian company and that we can run things as well as anyone.
In our mature cow processing plants, one of the issues we are currently facing from a competitiveness standpoint is the enhanced feed ban in the SRM rules. That puts an unintended cost on our facilities and has placed a burden on us. We've had to temporarily close our Moose Jaw plant until the fall because of it.
We feel that the effects of COOL have not been as pronounced in Canada as was initially feared. However, it's not that there aren't any effects. On the pork side of the business, we very much see some.
We believe that right now in western Canada we are seeing increased competition in that marketplace because of our purchase of the Lakeside Farm Industries. The U.S. packers are more aggressively trying to buy cattle in western Canada. The truth of the matter is that as Canadians, we are basically trying to deny them any ability to buy. We have to always weigh that thought process. Any discount that the U.S. packers want to put on our producers will be weighed on their ability to buy those same cattle because they can put a discount on.
I look to the fact that since our purchase of Lakeside, we've seen a decrease in cattle exports to the United States. I would not attribute that decrease to any effect of COOL but to our being able to get our operating costs lower and being more aggressive in the marketplace. Much to Patrick's members' chagrin, I would like to say that our goal is that we wouldn't have to ship any cattle to the United States, so we could process them all here.
That's a brief summary of what we are and what we believe.
I look forward to your questions.