Integration into North America and the Structural Change of Canadian Hog Industry

Abstract

NAFTA brought integration of hog production between the United States and Canada despite the international border. By relying on exports, Manitoba Canada has been expanding its hog industry since the mid-1990s to a degree more than traditional areas of hog production such as Quebec. In the late 1990s, hog prices in the United States dropped sharply and the export, of Canadian-hogs to the United States began to decrease. But it is interesting that the export of feeder-pigs continues to increase despite the price decline. Macro economic factors, especially'depreciation of the Canadian dollar against the US dollar, promoted the expansion of Canadian hog production. But it is also notable that the export of feeder-pigs has continued to increase even while the Canadian dollar has appreciated against the US dollar in the late 1990s. This reveals how structural change taking place inside the US is linked to structural changes of the Canadian hog industry.