Exploring Economic Advantages and Disadvantages of Finishing Hogs in Alberta

 
 
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  Economics and Competitiveness
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Executive summary

This report explores and compares production practices and cost of production (in 2012 and 2014) in hog finishing barns of Alberta and Iowa/Minnesota. The report also discusses on a high level other important factors that contribute to profitability of hog producers in Alberta and in the US, such as policy, labor, hog feed, and pricing.

It is concluded that, compared to the US (Iowa/Minnesota) hog producers, Alberta hog producers have advantages related to production practices and processes (such as days to market, biosecurity, land base), but at an economic disadvantage of higher production costs and lower hog prices. The message of this report is that in terms of production efficiencies and product quality, Alberta hogs are at least as good as the US hogs (and some aspects of production practices may be even better). It is a combination of relatively higher prices and lower cost of production in the US that makes the US hog producers enjoy higher returns on average compared to Alberta hog producers.

Cost of production comparison ($CAD per kg live weight)
Alberta
2012 (25 farms)
2014 (19 farms)
Average revenue
1.366
1.792
Average total COP
1.539
1.300
Profit/loss
(0.173)
0.493
Iowa
2012
2014
Average revenue
1.306
1.766
Average total COP
1.394
1.350
Profit/loss
(0.088)
0.416
FINBIN (Minnesota)
2012 (12 farms)
2014 (12 farms)
Average revenue
1.378
1.730
Average total COP
1.409
1.616
Profit/loss
(0.031)
0.114
FINBIN (All States)
2012 (22 farms)
2014 (17 farms)
Average revenue
1.353
1.746
Average total COP
1.397
1.490
Profit/loss
(0.044)
0.256
Sources: Alberta Pork, MetaFarms Inc., FINBIN, Iowa State University

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For more information about the content of this document, contact Olubukola Oyewumi.
This document is maintained by Shukun Guan.
This information published to the web on December 9, 2015.
Last Reviewed/Revised on February 23, 2017.