What Grant has just described needs an explanation, and there are two possibles here. One is that the concentration of ownership in packing and in retail is taking a larger portion. The other explanation is that as packers and retailers become larger and more concentrated, they become less efficient and have to take a larger share. I'll let you pick which one of those you want, but either one of those impoverishes farmers.
This whole issue of captive supply has not been discussed in Canada. It has not been an issue until we made it an issue. It has been an issue in the United States for decades, and from time to time it has almost become an issue in the Farm Bill. The Obama administration in the United States now is indicating quite strongly it's going to deal with this issue of captive supply once and for all. Our figures in Canada that we use—50% to 67%—came from two economists who studied the situation in Alberta. They found that, on the average, there was 50% to 60% of total slaughter in recent years, and some months that would go even higher.
If you turn to page 13, you'll see two pictures that are taken from Google Earth. This is the Tyson's plant near Brooks, Alberta. The top picture is the plant and the bottom picture is the feedlot that's directly across the highway from the plant. That feedlot is a mile and a half wide. It has a one-time capacity of 70,000 head of cattle. In the real fine pictures you can see trucks moving the cattle from that feedlot into that plant. That is captive supply. That is only one of the many feedlots of that capacity that serve that need.
When we look at what happened in the integration that took place, we see we were driven into increased livestock production by the loss of the Crow rate in western Canada. We were told that if we had the lowest feed grain prices in North America, our industry would thrive. There's one problem with that: farmers who grow grain cannot produce grain below the cost of production; they switch to higher-value crops. Then, because we lost our packing capacity in Manitoba, we had no place to put finished cattle. We then started producing double the number in calves to try to maintain our income, which then of course made us export-dependent.
If you turn to the graph that shows our continental integration on our exports, you'll see that from 1989 up to 2008, we multiplied our export capacity by a factor of eight. There isn't any other sector in the Canadian economy that has a record of that type of success in the export market.
I'd like you to turn to the next page, the food exports and farm income graph. I call this the weapon of mass destruction, because it shows what we as producers earn for our effort in multiplying agricultural food exports out of this country by a factor of eight. In 20 years, we produced three-quarters of a trillion dollars worth of agriculture products, and our income shown on the bottom line of that graph over 20 years was zero. Yet we were told on Thursday before this committee that the success of agriculture in Canada depends on us producing more and exporting more. There's a factor, you know. If you keep doing the same thing and expect a different result, perhaps you should look at doing things differently.
We also have a number of recommendations. Grant will do the first eight and I'll do the next.