I'm here to talk about the sheep value chain round table. I will begin with just a little bit of background.
The main goal of the sector is to create a profitable industry that encompasses all areas of the supply chain. Presently, the supply chain is fragmented and needs to be harnessed for future success.
Comprised of meat, dairy, wool, and genetic sectors, Canada's sheep and lamb industry is focused primarily on the production of high-quality lamb meat. However, the development of sheep dairy products such as yogourts and cheeses is a new area that promises future success.
In 2010 Canadian producers supplied 42% of the domestic meat market demand for Canada, and the farm cash receipts for sheep and lamb in Canada totalled $142 million. The combination of population growth and shifting consumer demands indicate there will be a growing demand for lamb and sheep dairy products. This is an opportunity industry needs to capitalize on to ensure its long-term viability and profitability.
The Canadian sheep sector has enormous potential both domestically and internationally, yet the industry recognizes there are many issues facing the industry that will hinder its growth. While the industry has been seeing consistent increases in demand for the product, there is a worldwide shortage of lamb.
There has been a 3.3% decline in the amount of lamb imported into Canada in the past 12 months. The decrease is not surprising given that flocks worldwide have been shrinking. The global reduction can be attributed to increases in the cost of production, weather-related drought, and within-country competition for more profitable uses of land.
This is a huge opportunity for the industry to capitalize on, not just filling our domestic demand but also the export potential. It also becomes an issue of food security and ensuring there are diverse agricultural products produced in Canada to feed an ever-increasing population.
Industry and government are working together to advance and implement actions intended to improve the industry's competitive position and expand Canadian production. Collaboration along the supply chain and with governments is integral in any success the sector may have.
Achieving this competitive position requires expansive representation from all levels of the value chain. The sheep value chain round table was formally established in 2011 to develop a shared understanding of the key market challenges and opportunities facing the industry, and to enhance cooperation and interaction amongst all stakeholders along the sheep value chain.
Here are some challenges, issues, and other factors facing the sheep industry. Better coordination of industry knowledge will assist in transforming this industry in a fashion that is beneficial for rural Canada, the producers and processors, and other stakeholders.
The industry is also facing a reduced number of processors. There is a need to focus on ensuring the entire value chain is profitable. The way the lamb industry is structured, most lamb are killed in provincially inspected plants, so that the meat cannot leave the province in which it was processed. In trying to access more markets, plants have been trying to become federally inspected and several have ended up going bankrupt. This is not helping the industry.
Government and industry have prepared an economic analysis on the impact of increased supply of lamb on domestic price. This piece was very well received by industry and provides important information going forward.
One area of concern is competitive access to animal health products, for example, veterinary drugs. The sector, with the help of government, is working to make the system better for industry while protecting animal health. Sheep traceability offers the potential to the sheep sector to impose not only the ability to manage disease but also enhance its competitive position. This system is being built in partnership with federal, provincial, and territorial governments.
The advancement of the sheep industry is dependent upon keeping existing producers in business and attracting new entrants to the supply chain. Supporting the existing and new entrants will be a priority for the sector going forward.
Industry, in collaboration with government, has developed an action plan that will result in expanding the size and the productivity of the Canadian flock and will improve the overall competitiveness of the industry.
In the next steps forward, industry will continue to work with governments to develop plans that will contribute to fostering a successful Canadian sheep industry.
Finally, in closing, there is a remarkable amount of industry knowledge available that can be tapped into to work towards making this sector another success story.