The Canadian hog industry is undergoing a period of uncertainty due to the rapid escalation of feed grain prices, the appreciated Canadian dollar and packer consolidation. The pending US Country of Origin Labeling legislation is also threatening the industry’s access to the US. Throughout 2007, producers have seen either negative margins or margins that are weaker than their US counterparts. For these and other reasons, producer attrition is accelerating and producers are assessing their futures in the industry. In this environment, producers are asking themselves whether their businesses can be competitive or not. The overriding issue for the prairie hog industry is that if it is not competitive in this region, why not and where can it be competitive? This paper looks at the current challenges and assesses prospects for the future in the prairie hog industry. The Prairie hog and pork industry is an agricultural success from any economic perspective, including, growth, jobs, incomes and trade. The entire industry in Canada has undergone a period of three years in which it has suffered disproportionate losses relative to US competitors. As a result, the industry now finds itself in a period of rationalization of packing plants and more rapid attrition in producer numbers. The summer 2007 announcement by Olymel that it would reduce its pricing structure in Red Deer will accelerate the attrition in producer numbers on the prairies. Furthermore, the prospects for packing plant closures on the prairies and in Ontario are factors that, again, will involve massive challenges for producers. Lastly, the pending US legislation regarding Country of Origin Labeling has the potential to further reduce pricing in Canada relative to the US. There will be a period of two to three years of industry pressure and reduced production in much of the prairies and the hog regions of Eastern Canada. At the same time, however, the Prairies are in a strong position on two key fronts. First, and most importantly, the region has enormous production capability in feed grains and land available for hog production. The fundamental factors that made Western Canada the number one growth area in North America are still in place and are at the forefront for the future. The key problems that the Prairies face in feed grain competitiveness are policy related, not natural disadvantages. These policy issues can, and likely will, be addressed. Prairie producers will not escape the coming difficulties but they are in a good position to endure it, compared to other areas of Canada. Furthermore, when the difficulties pass, the Prairie model of open marketing has proven it to be the best place to grow and move forward.