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Montana Stockgrowers Association meeting

People fill the Northern Hotel ballroom for the Montana Stockgrowers annual convention Thursday. Attendees heard plans about a $300 million business deal for packing and shipping Montana beef to China.

Plans are underway for Montana ranchers to ship $70 million worth of beef to China next year as part of a $300 million business deal including a $100 million investment in a Montana packing plant.

Leaders in Montana Stockgrowers Association, which brokered the agreement with e-commerce giant, presented the terms of the deal to members Thursday at the organization’s annual meeting in Billings.

Errol Rice

Errol Rice, executive vice president of the Montana Stockgrowers Association, speaks at its annual convention at the Northern Hotel on Thursday. Rice said the beef export deal is new territory for the association. is the world's third-largest internet retailer behind Amazon and Google.

“We have no reason to doubt that this is a four-wheel deal, and I can tell you I’m excited about it,” said Fred Wacker, whose Cross Four Ranch is deeply involved in making the agreement work. “The thing that excites me most is I think we have a very good buyer who has lots of money, and we have a product we have to sell. How great would it be for Montana, in my opinion, if 10 percent of our feeder cattle were fed here in Montana and that beef was exported? That fixes our feeder calf and our yearling business here in Montana.”

Right now Montana feeder cattle might put $1,000 a head, gross value, in a rancher’s pocket. That animal then goes out of state to be fattened up before being sold again, at least one more time, before slaughter. The gross value of the animal might be $2,000 at final sale, Wacker said. Keeping that animal in state puts more of the money in Montana’s economy.

Stockgrowers sign beef agreement with

The Montana Stockgrowers Association signed an agreement with eCommerce giant to provide $200 million worth of Montana beef over the next three years. An additional $100 million for construction of a packing plant and feedlot in Montana is also part of the deal. Pictured in Beijing are, from left: MSGA Executive Vice President Errol Rice; Jerome Ma, Corporate Vice President for; and Fred Wacker, of Cross Four Ranch in Montana.

The memorandum of agreement with stemmed from talks between the the Stockgrowers and U.S. Sen. Steve Daines about getting Montana-sourced beef into China. The conversation started in April, Wacker said, and culminated in a face-to-face meeting with China commerce officials North of Bozeman in September.

Not long after that meeting arranged by Daines, Wacker and MSGA Executive Vice President Errol Rice were in China signing a memorandum of agreement with

Under the agreement announced in November, Montana ranchers will supply $200 million worth of Montana-sourced beef to beginning in January 2018 and continuing through 2020. At a minimum, JD is expected to buy 80,000 to 90,000 cattle, Wacker said. Chinese investors will place additional $100 million in Montana feedlots and a packing plant.

The agreement is expected to increase 2018 Montana beef exports by almost 40 percent, according to U.S. Department of Agriculture statistics. The agreement is nonbinding, but Wacker said specifics for 2018 sales are to be mapped out next month. Plans are to increase cattle sales each year for three years.

Rancher Fred Wacker and Sen. Steve Daines

Miles City rancher Fred Wacker, left, talks beef trade with Chinese representatives at a Maudlow trade summit in September arranged by U.S. Sen. Steve Daines. The Montana Stockgrowers Association and eCommerce giant announced a $300 million beef deal Nov. 8.

This is new territory for the Montana Stockgrowers, Rice said. The state’s largest livestock organization has never before negotiated terms for a Montana cattle sale. The group will be relying on its members to deliver cattle for the agreement, which should the easily accomplished. Roughly a million Montana cattle are sold each year.

Stockgrowers President Bryan Mussard said he envisions both MSGA members and nonmembers supplying cattle to the sale, with a per-head charge from nonmembers to support MSGA's development of markets for Montana beef.

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Montana Stockgrowers

People fill the Northern Hotel ballroom for the Montana Stockgrowers annual convention for a presentation Thursday.

The location of the packing plant hasn’t been decided, but Wacker said he has heard from people in Butte, and in Yellowstone, Rosebud and Dawson counties who are interested in the establishing the packing plant in those communities. A committee will decide where to locate the packing plant, Wacker said, but he said he likes the idea of locating the packing plant in a community along the lower Yellowstone River. The plant would likely employ 150 people.

Rancher Jim Peterson, of Buffalo, asked if there was a way the Stockgrowers could work with a packing plant Alberta livestock company plans to build near Great Falls. Dubbed the “Madison Food Park,” the Cascade County packing plant is estimated to create 3,000 jobs. Developer Friesen Foods has said the plant will process cattle, pigs and chickens. In addition, plans call for a milk processing operation and a distillery.

Wacker said he supported Friesen Foods’ plans, but that MSGA would be moving ahead with a processing plant to serve the partner/buyer, plus other groups interested in Montana-sourced beef raised to the high standards of

The Stockgrowers said they didn’t see their operation in competition with Friesen Foods, which was more likely to face competition from meat packers in Canada.

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Agriculture and Politics Reporter

Politics and agriculture reporter for The Billings Gazette.