Mr. Speaker, I am glad we are here today again talking about the crisis facing our livestock industry. We are talking about the cattle and hogs, although the member for Malpeque was talking about poultry. I think he got a little confused because “pork” does refer to itself as “the other white meat”. He has used the term “pigs fly”. Maybe that is why he decided to look at the feather industry.
We are talking about the great difficulties our facing ranchers, cattle feeders, hog producers and everybody in that whole chain. Not only is it hurting these producers, and we have seen people in my riding and across the country close their doors and walk away from their businesses, which are often multi-generational family farms, but it is hurting the local communities and the feed mills. There is no doubt that the entire support system and infrastructure, which is tied to the livestock sector, are going through the same pains and throws. It could actually change the face of agriculture across the country.
My riding has well over 2,500 ranches and a number of hog barns. The provincial government in Manitoba has put a moratorium on more barns being built in our area. This is unfortunate because there are still a lot of advantages, in the right environmental circumstances, to expand the hog industry. However, there is no doubt that its announcement and decision was made at a time when our hog industry was going through some very difficult times.
We have to remember that what has happened has accumulated over a number of years. On the cattle side, it all started off in 2003 with the BSE crisis. My family and operation felt that hurt severely. We seemed to be getting out of that in the last couple of years, when all of a sudden prices started to plummet on our cattle and hogs and grain prices started to increase, which was great news for our grain and oilseed producers across the country.
However, people are trying to make all sorts of excuses on why grain prices are going up. We hear all these concerns raised around the world about the price of food. We have to realize that the whole global marketplace on world grain has changed. We have growing economies in India and China. They definitely are more affluent now and want to buy higher quality foodstuffs. They are buying it up at record levels. On top of that, we have had some very difficult growing conditions across most of the major growing countries.
We know that this year the U.S. wheat crop had a lot of winter wheat killed. They are rating a lot of those fields down there at only 50% good, which is a terrible situation, and that is helping push wheat prices up again. Feed wheat, a major ingredient in hog feeding, is being pushed higher as well.
For three years in a row, there were major droughts in Australia and very difficult harvesting conditions last year in Europe. Even western Canada came in with less than 78% of a normal crop. Therefore, there was not enough grain out there, and these prices are pushed higher.
I do not see grain prices getting softer. World carry-over stocks are at all-time lows. Since they have been calculating how much coarse grains are in the world on inventory, that number has consistently fallen over the last 10 years, and the grain trade, for the most part, ignored it. Now all of a sudden they realize there is increased demand for food products out there and that has pushed the value of these grains through the roof.
People have made the biofuel argument that we have taken food for fuel. As was just pointed out by my colleague, there is a lot of ethanol production in the U.S. The Americans are increasing their output of corn production and exporting more of it. This has been good news for countries that are buying food. They can get more corn from the United States and other countries that have made some major gains in their research and development of new varieties and have enhanced their productivity.
When we look at other products such as rice, and this is the big concern in Asia where prices have more than doubled, people say that it is biofuel. We know rice is not used in biofuel production. We know the land base and the paddock system they have with the rice paddies cannot grow anything else but rice. It is not competition for land; it is that the world population is growing, people are more affluent and they are buying more and more grain.
We also know that in Canada, the big kick in the teeth for us has been the dollar exchange rate. I guess we all have to wait to see how this will play out. As long as the U.S. economy is slumping, as long as commodity-rich countries like Canada are exporting oil, grain and even our beef and pork, we are going to see a lot of people buying Canadian dollars rather than U.S. dollars, and that is really what is driving this exchange rate.
Ideally I would love to see the dollar come back down under 90¢. We are going to have to wait and see if that is ever going to happen.
As chair of the agriculture committee, we have a great group of people from all parties who are sincere and want to ensure we do the right things for agriculture. We put together a great report. We received a response on the impact of the crisis on the livestock sector, and now a really good response from the minister.
One of the things we are looking at and studying right now is high input costs. That is really addressing some of the concerns raised by producers across the country. We are doing the research and hearing from witnesses about why fertilizer prices and fuel prices are going so high. We also want to find out if there has been any price gouging or unnecessary profit-taking in certain areas of the country. We are doing a comparison on what is happening in western Canada versus eastern Canada and the corresponding areas along the Canada-U.S. border, in the U.S. Midwest and in the eastern U.S. as well. We want to find out what is happening so we can make proper policy recommendations to the government.
I hear from producers all the time in my riding. I am meeting with farm organizations and producers from right across the country. One of the things I hear from producers, the ones who are committed to being in the industry and who are hurting, is that they are in it for the long haul and they want to know what the future will be. They all realize we will have to change our status quo.
We may not be able to conduct business the way we have for the last 25 or 30 years, building up our reputation as quality beef and pork producers. which is recognized worldwide.
I have been fortunate in that I have been able to go out and make some announcements on behalf of the government, trying to help the industry along, looking at new opportunities. The beef value chain is one. There is a great round table discussion about how they do a better job marketing, not only in Canada but around the world.
We gave some money to the beef value chain to look at developing an omega-3 beef. It has been very successful in the egg industry and in the fish industry, especially with salmon. Now it is time to look at whether we can take those same good fatty acids, those omega-3s and high linoleic acid, identify them and get them increased in the content of beef. People then would not only buy beef for its great taste and ability to enhance their nourishment at the kitchen table, but because a really good claim could be made on the health side of it. Not only is beef and pork high in iron and B12, but there is also an opportunity here to add omega-3.
We are also looking at different rations. At the Brandon Research Centre, we have put together a project with industry and the provincial government to look at different ways of feeding cattle, trying to cheapen up the rations that we are dependent upon, which right now are really grain-based, and moving away to more forages. Maybe there are other crop residues. There is all the distillers' grains coming out of the ethanol industry as well as all the canola meal and soya meal coming out of the biodiesel industry.
How do we take these new feedstuffs, which are being produced on a larger scale, and cheapen our rations so the rancher who has a cow calf operation and sells his calves on the marketplace can get a good price for his calves that come out of the auction market, as well as improve profitability for the feedlots that finish the calves and bring them to the consumer?
I have been fortunate over the last few years to ensure that I have always been in U.S. courts when R-CALF has tried to shut down the border on Canadian beef. I was at the latest one in February in Sioux Falls, South Dakota. One thing I found interesting was the lawyer for R-CALF, the judge and the USDA lawyers all stated publicly on the record that Canada had a better system for the mitigation and monitoring of BSE than the U.S. has.
One of the reasons R-CALF talks about shutting down the border is because it does not have a good system compared to Canada. It often mentions the enhanced feed ban on our SRM removal techniques and the program we have here as being far superior to what is done in the United States.
R-CALF also talks about the traceability of our animals because we have good animal identification, with radio frequency ear tags, that has helped to improve the entire industry to monitor and move forward with the protection of the consumer, as well as the health of our livestock industry.
We have been talking about the next big challenge, and one is coming up that is going to be incredibly difficult for the cattle and hog industries. It is the country of origin labelling requirements that are coming into effect in the United States. It has created a pile of confusion within the United States market. It is unsure of how it is going to deal with Canadian product, whether it was born here and raised in the United States, or bought here as a market ready animal and taken there to be processed into meat cuts or just buying Canadian product directly from our packers.
There are different terminologies surrounding how it is going to be labelled. I think the U.S. is coming to some decisions on how those labels are going to work. However, because it has taken them so long to define how it will move forward, it has put the whole industry in the lurch. Now we hear from packers and hog finishers in the United States that they will not buy any more Canadian hogs, or piglets or feeder calves. They are concerned that this will not allow them to market their product effectively when they try to sell it to local packers and when it ends up on the retail level in the United States. That segregation and segmentation of the industry is going to be incredibly difficult and detrimental.
I wrote a letter on behalf of the agriculture committee to my counterparts in the United States, the chair of the U.S. agriculture committee, as well as the chair of the U.S. Senate agriculture committee. We also contacted both the House of Representatives and the Senate. We said that we expected the new U.S. farm bill to include that the country of origin labelling had to be trade compliant under NAFTA and the WTO. We wanted to ensure the entire U.S. farm bill, as it ties to subsidies for farmers, would not distort production or the marketplace. We expect the new U.S. farm bill to be WTO and NAFTA compliant as well.
We have taken that stand as a committee. I know the minister, in discussions with his counterpart in the U.S., has carried the same message, that the United States had better ensure that any policies it develops will be compliant. If they are not, when they come into effect, when we can start to take trade action against it, there will be a strong response from the Government of Canada. I can assure everyone of that.
I have had discussions with the hog and cattle producers who have come to my office, who I meet in coffee shops or who are at the various events I attend across my riding. They need some help and they recognize that. The government has provided that help through some of the things we have done through the kickstart program, the previous CITI funding and the changes made to the cash advance program, as well the advances to the old CAIS program and the new agristability program. They have been helpful.
They are still asking for more measures but, at the same time, they want the measures to be trade compliant as well. They do not want to have subsidies thrown at them only to have countervail actions created by the United States, the Europeans, the Australians or the Japanese. I have heard from the other countries that they are watching what we do here in relation to our farm programs and how we help the struggling livestock sector.
The farmers are telling me that they want to make sure they have a future. That future has to be based upon the marketplace and they want that assistance moving forward in developing the marketplace.
I am glad to be part of a government that is signing trade agreements around the world and negotiating more trade agreements, so that we can get that market penetration in countries where they keep their tariffs extremely high on Canadian goods. We want to bring those down, so that we can enhance the opportunity for our hog and cattle producers as well as the packing industry to make money in those more lucrative markets, whether they be in Europe or the Pacific Rim. We are looking at those alternative markets.
We also know that we need to work with industry in developing their market enhancement and brand naming, and taking those things forward.
We are looking forward to all the proposals that have been put forward by the cattle and hog industries, as well as the Canadian Federation of Agriculture. We will try to capitalize on some of these ideas and make sure that those types of initiatives will generate the revenues back to the farm gate.
There has been a lot of work done on this report. It took us quite a bit of time through the fall to put it together. It has been one that was well received in the industry. It is one where I believe the actions taken by the government have largely addressed the concerns that we have raised.
We have to remember that in our actions that we take here that they are often related to not only our partnership with producers but also our partnership with the provinces. Any changes that we make to farm programs impact upon the provinces. Of course, they have a say in how we move forward with the overall agriculture policy framework, with the major one being the AgriStability program.