Thank you very much.
Good morning. I'm Casey Vander Ploeg, and I serve as the manager of policy and research with the National Cattle Feeders' Association. I thank the committee for this opportunity to share our perspective on the new agricultural policy framework.
The NCFA was established in 2007. We serve as the national voice of Canada's cattle feeders. Our activities as an organization are focused on three pillars: growth and sustainability, competitiveness, and industry leadership.
Canada currently has about 10 million head of beef cattle, with 7 million of those on cow-calf operations and 3 million on cattle-feeding operations. In 2015, almost 3 million head of cattle in Canada were processed into beef, and over $4 billion's worth of that beef was exported. The cattle industry contributes about $33 billion annually to the Canadian economy. Dollar for dollar, or pound for pound, beef is perhaps Canada's most valuable agricultural commodity.
With that short background, I would like to focus on two points this morning.
First, I would like to underscore the enormous potential—no, the tremendous potential—that agriculture can have in the Canada of tomorrow. Canada is one of only a handful of nations that are net exporters of food, and our importance as a global breadbasket will only grow. The new agricultural policy framework presents a real opportunity to create a broad, ambitious, and creative vision for agriculture in Canada. I would urge you to see the framework as more than a series of funding programs for specific activities and to consider how the framework can serve as a bold statement and a guiding vision for the future of Canadian agriculture.
Canada has all the ingredients to become an agriculture superpower, and when it comes to beef, we have all of those ingredients in spades. We have a large land base; vast natural grasslands; superior herd genetics; a good supply of feed grains; industry infrastructure; know-how and modern production technologies; a suitable climate; and, an internationally recognized food safety system.
The new framework should set an ambitious goal for Canadian agriculture. Perhaps it would be growing agriculture from its current $100 billion and 7% of GDP to $200 billion and 15% of GDP, or perhaps it would be growing our exports from $60 billion to $100 billion. Ambitious goals, we believe, demonstrate commitment, and such commitment can in turn affirm, validate, energize, and invigorate industry.
Second, I would like to briefly comment on each of the priority areas outlined in the Calgary statement.
Number one is markets and trade. The beef industry certainly supports government efforts to open new export markets. The current industry model has us supplying our own domestic market and then serving as a low-cost supplier into the U.S. market. Going forward, our aim should be to ship high-quality cuts of beef to sophisticated offshore markets where we can command a premium price. This is what will grow Canada's beef industry. Agricultural policy framework funds need to be directed toward ensuring supportive regulations and other policies so trade deals not only can be negotiated but implemented.
Number two is value-added processing. The single biggest challenge facing agriculture today is a lack of labour, particularly in processing facilities. There are over 1,000 vacancies in meat plants across Canada today, and many of those plants are operating at only 70% efficiency. We cannot stay competitive—never mind grow our market share—without the requisite labour. A key area for investment, then, is expanding the labour pool for agriculture by supporting things like the Canadian Agricultural Human Resource Council's workforce action plan. That plan was created and is currently supported by 75 agriculture and commodity organizations across Canada and contains a roadmap to address our industry's critical labour shortages.
Number three is research and innovation. To pursue growth and sustainability, we need continued investment in research. NCFA supports the beef science cluster and believes that government should renew funding under the new framework. The timing could not be better, as the Beef Cattle Research Council is currently developing its next five-year research strategy. Growing the Canadian beef herd requires investment to increase efficiency, maximize production, enhance environmental stewardship, and conduct research into forage quality, feed additives, animal genetics, and animal health.
Number four is environmental sustainability. Environmental enhancement remains a key consideration for agriculture producers. There is perhaps no industry that has made more efficiency and productivity gains than agriculture. When new policies such as carbon taxes are being discussed, it is important that this be recognized. Since 1981 the beef industry has reduced its GHG emissions by 15% through advancements in technology and management. In 1950 it took 11 pounds of feed and 44 gallons of water to produce one pound of beef. Today it takes six pounds of feed and eight gallons of water. If we were to produce beef today as we did in 1950, we would need another 45 million acres of land to do it. Funding the sector to adapt to a changing regulatory landscape would be an investment that leverages the considerable drive for efficiency that already exists within the sector.
Number five is risk management. The beef industry has certainly seen its fair share of risk over the past two years, with wild swings in prices for feeder cattle and fed cattle. At no time in recent history have prices risen so fast and so far, only to drop so precipitously and painfully. The average annual loss across the cattle feeding sector is currently running between $500 and $600 per head. Risk management is huge, and that is why the Alberta Cattle Feeders' Association started a new agriculture business risk management program at Lethbridge College. It's also why they developed last year, with municipal and provincial governments, a feedlot emergency preparedness plan.
In such times we do need to ensure that all programs are working for producers, including AgriStability, AgriInvest, and AgriInsurance. A key program for cattle feeders is the western livestock price insurance program. This has been a challenge for us given that so many fed cattle today trade on contract, making price discovery a real issue. Our organization is actively engaged to strengthen price discovery and reporting, recognizing that for beef the risks have never been higher.
Finally, there is public trust. Most Canadians are now three, four, or even five generations removed from the farm. While they are interested in knowing how their food is produced, there's a lot of misunderstanding today about agriculture. The extent to which any business can properly function and generate economic benefits for society depends on its social licence to operate. Such broad social acceptability and local community approval must be earned and maintained through ethical and responsible behaviour, transparency, accountability, and meaningful dialogue. Continued funding of such initiatives as NCFA's Canadian feedlot animal care assessment tool and the funding of new and emerging opportunities like the new Canadian Centre for Food Integrity are essential for agriculture to demonstrate our ethical and social commitments and to strengthen the public's trust.
In conclusion, we believe that the challenge of the new agricultural policy framework is to take these six priorities and weld them together into a broad, ambitious, and creative vision for Canadian agriculture, a vision that goes beyond the sum total of its six parts and reaches beyond for something bigger.
Thank you.