Factor and Product Market Tradability and Equilibrium in Pacific Rim Pork Industries

Abstract

This paper uses a new market analysis methodology to examine price and trade relationships in eight Pacific Rim factor and product markets central to the Canadian and U.S. pork industries. The new method enables direct estimation of the frequency with which a variety of market conditions occur, including competitive equilibrium, tradability, and segmented equilibrium. While extraordinary profit opportunities emerge episodically in a few niche markets, the vast majority of the markets studied are highly competitive -exhibiting zero marginal profits to spatial arbitrage at monthly frequency -and internationally contestable. In spite of continued high international transfer costs, the Pacific Rim is effectively a single market for pork producers and processors today.