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Where will Pork be Produced in the Next Ten Years?

     The answer of course is right here in the United States, judging by the massive quantities coming to market this fall and winter.  The deeper question however is, where will the growth in production take place globally that will be needed to feed not only the coming billions of people but the added per capita demand that most of the world's existing pork-eating population is clamoring for as their incomes rise.

     Population and incomes are growing dramatically and expected to continue to grow in countries like China, India and Brazil for instance.  These countries are leading worldwide demanders of commondities primarily stimulated by rapid growth in their economies.  These countries also have a comparative advantage in labor intensive production processes such as agriculture and most manufacturing.     What each of these contenders lack is developed infrastructure to fully exploit their labor advantages.  This is changing but it is a slow process.  Will global pork production gradually fade from North America and Europe and wind up in Brazil, China and countries like Russia?

     Firms decide the amount to produce based on expected profits and alternative investment opportunities.  Many places which used to be growing and thriving pork production areas are slowing in growth or retracting because alternative investments yield higher margins.  Much of this in Europe for instance is the result of costs imposed on agriculture by government regulation.

     Comparative advantage is the framework that helps explain where pork will likely be produced in the future.  In those areas which have a comparative advantage in production (lower cost) specialization and export of pork will occur to those areas which have other product or service production advantages. 

     Firms make the decision based on cost of production.  However, governments are entering the picture more and more and seem ready to impose costs which heretofore have not been part of the calculus.  For instance, if it becomes widely accepted that cattle production worldwide is causing global warming, cattle producers may face taxes and the costs of "carbon neutralizing" investments.  The same may happen in pork production.  Such taxes may raise the costs of inputs which are believed to effect climate in their own production processes or the output of beef and pork itself may be directly taxed as a means to decrease its production.

     Because the notion of man-made global warming has become politicized, it will be difficult to find the truth about all of this for quite a while but that will apparently not stop at least some governments from pushing ahead with control measures. 

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