Free Trade and Broiler Growout Returns: The Case of Canadian and U.S. Farms

Abstract

The costs and returns associated with broiler growout production are estimated for Canadian enterprises. In view of the ongoing U.S.-Canada Free Trade agreement and the recently approved North American Free Trade Agreement, this study evaluates the profitability of Canadian broiler farms under various free market scenarios and in comparison with representative U.S. farms. A comprehensive, farm-level, capital budgeting, Monte Carlo simulation model, CHICKSIM III, was used to analyze the production and financial performance of representative broiler farms for both countries. The results show substantial differences in investment returns and profitability of broiler growout production in the U.S. and Canada. Several impact scenarios were also developed to ascertain the effect of unrestricted market access policies on the economic performance of Canadian broiler farms.