Main Cost Advantage When Producing Pork

by 5m Editor
28 December 2011, at 7:17am

CANADA - Sask Pork reports the cost of feed remains Canada's main advantage when it comes to the production of pork, Bruce Cochrane writes.

InterPig, an international network of swine economists, collects and exchanges standardized information on swine production costs and productivity in various countries for comparison.

Mark Ferguson, the Manager of Industry and Policy Analysis with the Saskatchewan Pork Development Board and a member of InterPig, reports the cost of producing pork in 2010 was higher in Canada than in both the United States and Brazil but lower than in European Union countries.

Mark Ferguson-Saskatchewan Pork Development Board

Canada's main advantage continues to be feed costs and in 2010 Canada had the second lowest feed costs at about 88 cents per kilogram.

We are second only to the US which has an estimated feed cost of about 85 cents per kilogram so we're very very competitive across the world in terms of feed costs and, just depending on the year, we might be slightly below the US, some years slightly above.

It just depends on the markets but that's Canada's main advantage.

In terms of disadvantages versus the low cost producers I think we have a higher labor cost.

Especially in western Canada, given a lot of the economic activity and growth that's happening that isn't surprising.

Countries such as Brazil have a very low labor rate and I don't think it's ever something we'll be able to compete with.

I think in terms of infrastructure as well, building costs, Canada also has a disadvantage there, just a higher cost to build a barn in Canada versus some of the other low cost competitors.

But important to remember that, in terms of labor and building costs and some of these other miscellaneous costs we are very competitive versus the EU countries.

Mr Ferguson suggests Canadian producers needs to keep a handle on those costs that are higher than their main competitors such as labor and to continue to focus on their main advantage, feed costs, and making sure they use feed efficiently and keep productivity high.

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