Agriculture Committee on June 6th, 2012

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much. I'll come back to you in a minute.

Mr. Toews, you were talking about the beef value chain round table and some of the successes we've had because of it. You were talking about key markets. Another thing you talked about was veterinarians being posted abroad. Can you talk about some of the places you've identified to send them and which markets are key markets for us?

[Travis Toews]

Sure. Thanks for that question.

Really, the importance of having technical expertise abroad came to the forefront in 2003, when there was a massive effort to begin to reopen those markets. As for key markets that have received veterinarians, one has been Mexico and another one has been Japan.

In the Japanese market it has been very critical throughout the market access work to have that technical expertise on the ground. We're fortunate with the expertise we have there today, particularly at this juncture of Japan moving forward with, hopefully, opening for beef and cattle under 30 months.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you.

It looks as if we might to have to talk slower. Mr. Lobb's translation isn't working for you there, Mr. Toews.

I'd like to talk a little bit about the importance of rail to your industry and to everybody's industry. But I'll start with you, Mr. Toews. Can you talk a little bit about the importance of rail when it comes to your industry, and also, perhaps, feel free to allude to the rail review that's going on right now.

[Travis Toews]

I'll speak to the importance of an efficient infrastructure system. In the cattle industry, rail is not used significantly to move our product directly. However, rail is used to move feed stuffs across the country and into the country at times from the U.S. Obviously, because we're a global player, we have to be competitive on all fronts so we need a very efficient transportation system. An efficient rail system is part of that equation.

I can't really speak to the rail review, but I can certainly state that our industry is dependent on a very efficient transportation system and infrastructure.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Does anybody else have a comment on the importance of rail?

[Florian Possberg]

If I may, the challenge with meat is that it's a product that requires swift action and refrigeration or freezing. You know, “Sell it or smell it.” It's not only the logistics of getting containers to places, it's making sure that it actually moves in a very timely manner and the product is kept under the conditions necessary for it.

Our primary high-paying markets in southeast Asia demand fresh-chilled product. This means it has to be kept in very controlled temperatures, two-to-four degrees, two-to-seven degrees Celsius. That product, if it's properly handled, can have up to 70 days shelf life from time of processing to the product actually being in stores in far-away markets. But if those conditions aren't met, that product will deteriorate rather rapidly. Making sure that everything works smoothly is very important for our product.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much.

I'd like to make one last point to thank industry, thank yourselves. Mr. Toews, I've worked with you on some of these things. Government can open up some doors and take down some barriers, but really it is Canadian industry that has to step up and create the relationships and get the job done. You guys have been doing an excellent job over the last few years, so I think it's important that we thank you for your work as well.

[The Chair, Conservative, Larry Miller]

Thank you.

Ms. Brosseau, you have five minutes.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you very much.

I've only been on the committee about two months and there's so much to learn. Recently we visited Cargill in Guelph. We started off there and then we visited a feedlot and I really appreciated seeing how the animal moves through the transformation and actually comes to your table. I was wondering if you could talk a bit about the distribution sector, because I know in Canada there's maybe three or four big grocery stores—Loblaws and Metro—and I was wondering how this affects each of your industries. Is it positive? Is it negative?

Who wants to start?

[Travis Toews]

Thank you for that question. It's a question that I think many producers ask across the country and it's a worthwhile question. I think that not only do we need to consider our retail distributors but probably our processing industry as well.

As primary producers we depend on an efficient processing and distribution sector. We need them to be very competitive in order for us to be competitive globally.

I think the best way to answer this.... I recently had a discussion with a counterpart in Australia and Australia has very close geographic access to many high-value Asian markets. They did not have their markets disrupted due to a BSE event and yet their fed cattle always trade consistently lower than Canada and the U.S. I asked this individual, who's a leader in their industry, why is that the case, given the market access that they have and his answer was very quick. He said, “In Australia we simply do not have as efficient and as competitive a processing and distribution system as you have in North America.”

As producers we sometimes don't believe that we benefit from that world-class processing sector and that world-class distribution network, but the reality is that we do. Market power shifts and swings from time to time, but overall, we have a very competitive distribution sector here.

[Florian Possberg]

We actually have an interesting thing going on in Canada. Although we're the third largest exporter of pork globally, 30% of the pork consumed in Canada actually comes from outside of Canada, mostly the United States. Part of that is because the big retail chains want to deal with volume and big distribution centres. When they do specials, they want to know they have quantity of products.

But what's not said is that we don't identify our product as Canadian product. It's one of the things we're working toward in the pork industry. We seem to be better at marketing our pork in Tokyo than we are in Toronto or Montreal—

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

We need a branding strategy for Canadian pork.

[Florian Possberg]

Yes.

So now we're actually getting around as an industry. We've left the branding part to the processors to date, but as producers we really feel that it's our product that we're very proud of, and we can't sell it to you as a consumer if you don't even know it's Canadian.

We spend a lot of time in Canadian quality assurance programs in the pork industry. Hopefully, in the next while you'll know or you'll have a choice to buy pork that is branded Canadian quality assurance.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

When you go to a grocery store and you walk into the meat section, you'll see on the package “Canadian pork”, is that what you're talking about? Or are you talking about labelling or just a pan-Canadian marketing advertising campaign?

[Florian Possberg]

About 95% of the pork we produce actually goes through a very stringent food safety process program. We've branded it Canadian quality assurance that the Canadian Pork Council manages.

When we talk to other people selling branded product, they tell us we have a good story to tell and we're not telling it. We have to work as a value chain with our processors and retailers, and give our Canadian consumers a choice to actually know and buy Canadian pork.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Andrew, I have a quick question about sheep. This might sound silly, but are sheep slaughtered at a slaughterhouse that would slaughter cows or is it a specific provincially regulated slaughterhouse just for sheep? Because I know things would have to change in order to accommodate the transformation to sheep.

[Andrew Gordanier]

Because of the lack of volume that we have in the sheep industry in Canada, we have no dedicated plants specifically for lamb slaughter. We do have a plant in western Canada that has a specific kill line for lamb, but they go into a central portion of the slaughter plant after that where the products are broken down.

So they are multi-species plants, that do lamb and veal; or lamb and beef; or lamb, beef, and bison; or lamb, pork, beef, and bison. Because much of the slaughter is provincial, they rely on multi-species situations.

[The Chair, Conservative, Larry Miller]

Thanks, Ms. Brosseau. You're out of time.

Mr. Lobb, for five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks, Mr. Chair.

I'd like to welcome Mr. Easter to the committee this afternoon. I always welcome his positive attitude on agriculture whenever he's at the committee. I'd just like to note that Mr. Eyking has the same mentality, and for the pair of them, their recollection begins in 2006, and they've forgotten the years of 1993 to 2006—but whatever.

The first question I have is for Mr. Possberg. It does have to deal with labelling. The Ontario cattlemen have done a great job with the Ontario corn-fed program, and they've been able to really sell it to Loblaws and get them to put it on the shelf. It did take a long time, but they're getting it done now.

A moment ago you touched on labelling. Where is that and what kind of a timeframe are we looking at? When I go to Zehrs in Goderich and buy ribs, you really wouldn't know where they are from. So where are you going and in what kind of timeframe will we see this take place?

[Florian Possberg]

Through discussions with our partners in the value chain, we've come to the conclusion that we have a problem. The problem is that more American pork comes in and our consumers are actually eating less pork year over year, so it's a double whammy.

We've committed, as the Canada Pork Council, to actually take part of our check-off and dedicate it to domestic marketing. The good part is that the other people in the value chain, the processors, through the Canadian Meat Council, have committed to going hand in hand with us. At the end of the day, if we can successfully develop the label that retailers are enthused about, and we think we can. We're probably a year or two out, but we really now have the momentum to get things done. So I think you're going to start to see some of our labels show up in the next 12 months probably.

We've had programs in the past. We've never been able to sustain them, and as you know, in the branding world you can't do it half-heartedly. You have to be committed to it. So within a couple of years, hopefully, a lot of the pork that you see that is Canadian produced will be identified as Canadian, and we'll have a label that clearly defines it as such.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I'm sure it will turn things around once consumers see that in their grocery stores.

It's the same question for Mr. Gordanier. It's the same thing. When I go to Zehrs in Goderich I see lots of lamb from New Zealand but I don't see any from Canada, so what's the strategy for lamb in Canada, lamb in Ontario, wherever? What is the strategy for packaging and labelling to identify a “Made in Canada” or a “Made in a specific region” brand?

[Andrew Gordanier]

The problem is much deeper than labelling for us. It's more of a supply problem because of lack of supply. We have very little federal slaughter on the lamb side of the business in Canada. It's almost non-existent, really.

In order to be in those large grocery store chains, you'll rely on a federal slaughter for their central warehousing. You probably won't find us in Loblaws for a while until we have been more successful with our expansion of the industry and expansion of production, because that is really the biggest reason you're not seeing us in those big box stores.

Where we are being very successful is in your corner butcher store, where we can use a program like Homegrown Ontario, for example. Alberta Lamb has a program similar to that as well, as do smaller, independent grocery stores, which is probably the best place to look for a Canadian domestic product.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay, that's good.

I have one other question for Mr. Possberg. We've talked a little bit about this in committee with the fast food retailers and some of the grocery store chains really pushing toward a code of practice for the sow industry. I'm wondering if you or any of your colleagues have begun to do any research on that. Today there is a finite number of sows in Canada. With the changes with gestation crates, sow crates, whatever they want to call them, how many more sows are going to have to be in the Canadian pork industry to deliver the numbers we're delivering today?

[Florian Possberg]

There are about 1.3 million sows today producing 27 million hogs per year. Of that, probably 1.1 million would be housed through their production cycle, the maternity part, in gestation stalls. The part being questioned today is whether we can continue that practice into the future.

I actually chair the pig code committee that is looking at how we treat this in terms of animal welfare going forward. It's quite a complicated question, actually. There's no really simple answer, but we're trying to create the balance between what the public wants, what the producers can deliver, and what we can do while keeping our producers viable and in business.

We are developing a uniquely Canadian code. It will likely be quite different from the European or American ones. At the end of the day, we think we will have something we can be proud of. The code process is under way today. We think we'll have something finalized by the middle of next year.

If there ends up being a large transformation for our breeding herd from one style of housing to another, our producers are asking whether there is something the federal government or other levels of government can do to support the transformation.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I have one quick question, because I know that my time's running out. What is the standard you use right now in the industry for the number of piglets per sow per year? Where is that number today?