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By Micah Drew
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Open Chinese Market Unlikely to Directly Impact Local Ranchers

 

Andi Bourne, Pathfinder

Ranchers can't claim the Made in Montana label if they ship their beef out to be finished.

POTOMAC - Last month Montana U.S. Sen. Steve Daines announced that after a 13-year ban, the U.S. will once again be able to ship beef to China.

"Montana beef will now be served on menus, plates and in Chinese households," Daines stated in a press release. "On my next trip to Beijing I look forward to seeing Montana beef on the menu."

The measure reopening the markets is set to go into effect this month.

Errol Rice, Executive Vice President of the Montana Stockgrowers Association stated, "We are extremely excited about the announcement. Montana's ranchers have been waiting since 2003 to ship the nation's highest quality beef to China's 1.3 billion consumers."

While this sounds like the largest economic boost for the industry, it isn't likely that all Montana ranchers will feel the effects in the near future.

"There aren't 1.3 billion consumers eating American beef yet," said Justin Iverson, one of the owners of the Iverson Ranch in Potomac.

He agrees that it's a great start, but the chance to feed the 1.3 billion people in China isn't so easy for many of small Montana beef operations.

The Iverson's run a cow and calf operation, which means they raise calves until they reach a certain weight-somewhere around 600 pounds, then they are shipped to feed lots out of state. The majority of Montana cattle will end up being finished in the Midwest, where they are close to feed sources and thus cheaper to finish.

According to the U.S. Department of Agriculture, Montana produced 2.65 million cattle and calves in 2016. Missoula County ranked 51 out of 56 counties that year with 10,800 cattle. Powell county ranked 28th, with 29,500 total cattle and calves.

According to the Montana Stockgrowers Association, nearly a million calves each year go to feed lots out of state. So even though Montana produces such a high number of cattle-the state perennially ranks around 10th in the nation-it doesn't have the infrastructure to feed and process that many cattle. Shipping them out of state removes the chance to be labeled "Made in Montana."

However, Iverson said that the market for Montana raised beef doesn't really exist yet, outside of a few niche operations that finish their cattle in the state.

"That'd be fantastic if we could differentiate ourselves and if there's a market for Montana beef, then we'll produce that Montana labeled beef," he said. "Is it there yet? It's not."

Since the Chinese market is so large, distributors tend to work directly with packers who have the volume and consistency to meet the demand-something producers, especially small producers-can't do.

China also has regulations for imports. Cattle must be born, raised and slaughtered in the U.S., without hormones and implants, and beef must be traced back to the birth farm among others.

Iverson said that most beef from his ranch isn't traced once it is sent to the feedlot which essentially takes it out of the possibility to being shipped overseas.

At commodity beef prices, small operations can't afford the paperwork and cost to trace their beef through the process.

There is a silver lining to it all, however.

"[The effect on us] might happen sooner rather than later because that void is going to have to be filled when the beef that was destined for the American market is being moved," Iverson said.

For now, China isn't on the forefront of anyone's mind-it is haying season after all.

 

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