At the National Farmers Union, we got to the point where we were starting to ask the question, what's happened in beef? What's going on? One of the things that occurred when I started quite near the chair's riding, at the back of my farm, was that I was walking up one day from having fixed some fence back there after a bad thunderstorm and it was knocked down, and we're on kind of a little ridge, and I was looking down over our cattle. It occurred to me that if my grandfather had had a herd the size that we have, he'd feel that he was doing pretty good for himself. What I had to do was hurry up because I had to get cleaned up and get to my off-farm job so that we could pay the bills on our farm. It struck me that something had gone wrong, and that started a general discussion in the NFU about the situation in beef. What's happened, and why are we at the point we're at?
One of the things we did, and I'll refer you to the first graph in our handout, is we wanted to look at what has happened with pricing over time. The graph that you're looking at is a graph that has never been done before in Canada. It looks at pricing adjusting for inflation, or purchasing power. To explain purchasing power, I'll go back to my great-uncle Bill Engel, who was in fact a constituent of the chair, living in Elmwood. He lived to be almost 100 years old. He used to say that when he was a young man he had to work a hard day's work to afford a pair of shoes. That would be about enough to buy a pair of shoes. It's pretty much the same now: a good hard day's work is what it takes to buy a pair of shoes. Even though the amounts of money have changed, the purchasing power has remained the same. But that's not true in cattle.
When we did this graph, we found that there were three distinct periods. We started in the midst of the Great Depression and moved it right up to the present day. You can see there, and I'll refer you to it some more, three distinct periods during that time. All of this is, again, adjusted for inflation so that a price of an animal in 1936 is equal to a price of an animal in 1986 and 2006, so we could compare apples to apples. We thought it was important to do this analysis because we really haven't been talking about these kinds of issues in this way in Canada, about really what has happened to the pocketbooks of farmers.
I'll be honest, we ran this graph a bunch of times because we didn't think it was right. We didn't trust our own data. It just seemed too easy that it would break out this way. We were expecting that you would have the BSE situation and then we would see the decline from there. We approached this with no agenda. We just wanted to find out. We had no preconceived ideas. So we have three periods, and we're going to talk about that.
We have the period of the Great Depression, and you can see there where prices are basically running from quite a low to around just a little bit above around $150 or $140 a hundredweight. Then you have a period of relative stability in there from 1942 to 1989. Prices rise and fall; you have some peaks and some valleys; you have foot-and-mouth in there, which causes a big drop. But basically they run in this channel, and you can see where we've highlighted it across the top.
Then in 1989 something changes, and you start to see that the normal range now becomes less than what the lowest part of the normal range was, so even the highest of our new normal is below what was the lowest of the old normal. Then we started looking around at what happened in 1989 and where we went from there.