Canadian producers compete against U.S. producers on the same markets,
whether it is national or international markets, and they are price takers. Pork products are undifferentiated because they are sold into a mass market.
Within this context, Canadian producers must lower their production costs in
order to stay competitive and profitable. To achieve this, they must monitor
their costs of production and understand factors that impact it. This
comparative analysis reveals that US producers benefit from comparative
advantage over Canadian producers for hog-finishing operations. Canadian
producers have a better productivity in terms of feed conversion ratio and barn
turnover. However, they need to improve their labour productivity. Regarding
hog market structure, characteristics in terms of farm size, production
concentration and specialization of hog-finishing operations enable producers
to benefit from return scales or scale economies. These characteristics are
similar across North America especially in Western Canada and the U.S. Ontario
and Quebec are closely following. It is also important to note that it is a
combination of factors that impact production costs and producer
competitiveness. Therefore, improving costs of production requires addressing
all these factors simultaneously.