Thank you. I'm Andrew Dickson and I'm the general manager of the Manitoba Pork Council.
The Manitoba Pork Council would like to thank the committee for this opportunity to express its strong support for the ratification by Canada of the Trans-Pacific Partnership agreement.
The council represents the interests of all pork producers in Manitoba. We were created over 20 years ago under provincial farm products marketing regulations to deliver programs and services to build and develop the pork sector in the province and to represent the interests of producers to all levels of government. We are funded by a compulsory levy on all pigs sold for slaughter and all weanling pigs sold for export out of the province.
We'd like to share some statistics to illustrate our dependence on exports and new trade agreements. According to Stats Canada, there are about 550 farms producing about 8 million pigs, of which 4.5 million are processed in the province. Just over 3 million weanling and feeder pigs are exported, mostly to the United States.
Manitoba is the largest pig-producing and pig-exporting province in Canada, with almost 30% of Canadian production in 2015. The estimated value of pigs produced was $1.3 billion in 2015. Manitoba processes over 5 million pigs, or one-quarter of the hogs slaughtered in Canada. Our processing plants account for just under one-quarter of Canada's pork exports by value in 2015.
The HyLife plant in Neepawa is the largest exporter of pork to Japan of all the plants in Canada. Over 250 million kilograms of pork products were exported to 30 countries around the world, for a value of almost $800 million in 2015. About half were fresh chilled cuts, 40% frozen cuts, and the balance cured and preserved products.
While 25% was sold to the United States, this has been as low as 2%, depending on exchange rates. Japan is by far the largest and most lucrative pork market. Almost half our pork products by value were sold in Japan, though only one-third by volume. Sales of pork products outside of Canada accounted for almost 75% of all sales. As an industry, we are totally dependent on foreign sales.
The sector provides about 12,000 to 13,000 jobs and is the largest part of the food processing and manufacturing sector in the province. We buy the equivalent of 20% of the Manitoba crop as feed grain and oilseed meal. We have plenty of potential to grow the business, with abundant land and water. Our processing sector needs another 1 million to 1.2 million hogs to bring its current processing capacity into line with similar plants in the United States.
For our council, the signing of the TPP agreement on October 5 was a good day for our producers. In 2014, Manitoba exported over 175 million kilograms of pork products to just seven of the twelve TPP members. This was worth $677 million to our producers. The U.S. is our major competitor in international markets, though the EU is a major factor in frozen cuts in the Japanese market.
The key point of this agreement is that we will have the same access to these markets as the United States. We cannot have another blunder, as we did with the South Korea FTA when we belatedly signed on to the same conditions that the U.S. had negotiated. We got left behind in the tariff reduction phase-in period and lost sales in a high-value market. One of our processors in Manitoba indicated they had lost over $70 million in annual sales to one of the leading retailers in South Korea. It will take years to recover our market share in that market.
In terms of direct benefits, we are focused on the potential for an increase in sales in the Japanese market as tariffs are reduced for certain cuts and retail demand increases. The Japanese gate price mechanism is designed to keep domestic pork prices high to protect domestic producers. While pork is the main red meat in Japan, it is relatively expensive compared to Canadian domestic prices. As the protective tariffs are reduced, we should be able to increase sales volumes, especially of lower-value cuts, and regain a bigger share of other cuts and processed products. One study indicated that Canada could increase its sales of pork into Japan by $300 million annually as the tariffs are reduced, and Manitoba will have a major slice of that growth.
In the future, the market in Vietnam, with its 90 million people whose main red meat is pork, will be the major focus for our processors. As their economy continues its rapid climb to prosperity and living standards improve, our experience is that they will increase their consumption of pork, especially among the expanding wealthier middle classes.
The key point we want to emphasize is that Canada must ratify this agreement if the U.S. moves forward to complete its ratification process. If we sit on the sidelines and twiddle our fingers, our producers will be the ones who suffer directly. To lose the Japanese market to the United States would be the largest calamity to hit the pork sector in a generation. We would have to shrink the industry dramatically, with major layoffs in the processing industry and the abandonment of a significant part of our farms and stock. The economic future of places such as Brandon and Neepawa would be in peril.
The consequences of not being a full partner will affect ordinary people in communities here in the Prairies. This will not be something to shrug off and pretend nothing was lost.
We want to end on a positive note. From its foundation, Canada has been a trading nation. We know the importance of leading the world and breaking down the barriers to trade in goods and services. The TPP agreement will open up new markets and allow Canadian farmers and our food processing sector to play to our inherent strengths for the betterment of all Canadians.
Thank you for your patience and for listening to our presentation.