Good morning. I was pleased to accept your invitation to appear before you today.
Canada Pork International is the export market development agency of the Canadian pork industry. Established in 1991, it is a joint initiative of the Canadian Pork Council and of the Canadian Meat Council. Our organization deals primarily with market access issues, the promotion of Canadian pork abroad, providing market intelligence as well as working on other significant export-related issues.
On the first page of our brief you will see statistics about last year's exports, in tonnes and in dollar value. I would also like to mention that the industry set a new record, both in tonnes and in value.
Canada exported to 107 countries in 2008 and to more than 140 in the last four years.
More than 50% of the total Canadian pork production is exported. It is worth noting that Canadian pork exports to the US now represent less than 30% of the country's total exports. When CPI was first established this market represented more than 75% of our total exports. This is the proof that our strategy to diversify away from the US and to be less dependent on one market was successful. However, one must keep in mind that past success is no guarantee of future results.
With the uncertainty surrounding the implementation of the US Country of Origin Labelling legislation, there are fewer hogs being exported to the US and as a direct consequence, the number of hogs processed in Canadian plants has increased by 5% in the first seven weeks of this year—and in the French text the word "months" should be replaced with the word "weeks"—when compared to the same period last year.
The average carcass being heavier, this translates into an increase of 6.5% in total pork meat production for that period. This means that at this moment more pork needs to be exported considering that the consumption remains rather stable.
We expect 2009 to be a difficult year for exports as the economic conditions prevailing in some major markets, especially Russia, China and South Korea, have already resulted in much lower sales. It is too early to tell what our exports will total at the end of the year, but even if they remain the same as last year, we are almost certain that this will result in lower revenues for the industry as many markets will buy lower-value cuts and as our exporters might be forced to discount higher-value cuts. Tight credit will definitely continue to be a factor in the coming months.
The favourable exchange rate will certainly help, but it is not good enough if countries are determined to limit imports.
I will now deal with the issue of market access. Maintaining access to existing export markets and seeking access to new markets has been and remains the top priority of Canada Pork International. Over the years, we established a strong working relationship with the Canadian Food Inspection Agency, the Department of Foreign Affairs and International Trade and Agriculture and Agri-Food Canada. This partnership has been successful so far as demonstrated by the number of countries Canada has been able to export to. However, exporting to a country does not mean that one has full access to that market. In fact, there are several markets where we have a limited access and where we continue to seek full access with varying results.
Given the current economic and financial crisis, we are starting to see an increased tendency in some markets to use technical barriers as a means of limiting or prohibiting imports. In too many cases, import requirements are either not based on science or are unjustifiable too restrictive, not taking into account actual trade and distribution conditions.
The Canadian pork and beef sectors are working closely together on market access and we recently came up with a series of recommendations for enhancing Canada's technical market access capabilities for agri-food products, not only meat. We are both very pleased that in response to our request the Minister for Agriculture and Agri-Food, Mr. Gerry Ritz, has recently announced the establishment of an agri-food Market Access Secretariat that would set priorities and timetables as well as identifying and allocating the required resources.
We are looking forward to working with federal government officials to get the structure in place as soon as possible.
The Canadian Food Inspection Agency has a unique mandate of negotiating access to foreign markets as well as certifying that our meat exports are in compliance with those agreements. As we mentioned earlier, it is our pleasure to acknowledge that the CFIA has done an excellent job over the years in helping us gain and maintain access to a large number of countries. It is paramount to our industry that the CFIA retains a very credible reputation with its foreign counterparts. With the increasing number and complexity of recent issues, some major like BSE and the short ban on Canadian pork imposed by Russia, we are not pleased to witness the fact that the CFIA technical resources have been stretched to the point that they can no longer deal easily with two major crises at the same time.
We acknowledge without reservation that the priority of the CFIA must remain food safety, but at the same time, the Canadian government must also recognize that nobody else can negotiate veterinary agreements and certify meat exports and the one role can not and must not be played at the expense of the other. We would hate to come back here in a few years and complain that the CFIA has become a constraint to our exports because the government did not take the time to review and assess the need to hire and train the highly-skilled professional staff required to deal with an increasingly difficult trade environment.
At times, political involvement is required to resolve market access issues. We are strong supporters of missions abroad led by the Ministers of International Trade and Agriculture and Agri-Food when they provide a unique opportunity to resolve an issue or to make progress toward its resolution.
I will now turn the floor over to Jacques Pomerleau, Executive Director of Canada Pork International.