Montana Ag Producers Expect Challenges with Trump’s New Tariffs
Farmers and ranchers are bracing for additional costs on everything from fertilizer to tractors, and industry representatives are already bringing concerns to elected officials
By Matt Hudson for Montana Free Press
In the beef business, a cow can be born in Montana and cross the Canadian border twice before it’s processed. Tariffs both ways could make that an expensive cow.
“If we have Montana feeder cattle that originated in Montana, fed in Alberta and then was sent back to the United States for processing, what’s the impact there?” said Turk Stovall, first vice president of the Montana Stockgrowers Association.
On Wednesday, Stovall and other leaders from the Stockgrowers Association were in Washington, D.C., to share their tariff concerns with Montana’s federal delegation. The Trump administration’s new tariffs have the potential to disrupt this regional ag economy for producers of beef and other goods.
“It’s in effect,” Stovall told Montana Free Press on Wednesday. “How long it’s going to be in effect, we just don’t know. It’s the decision of our administration. Some people are just choosing to wait on that decision. Others don’t have the ability to wait. Livestock eats and drinks every day.”
It’s those unknowns that are vexing Montana ag producers in these early days of the Trump administration tariffs, which took effect Tuesday. The tariffs impose a 25% tax on most goods coming from Canada and Mexico, as well as additional tariffs on Chinese goods. Almost immediately, those countries announced retaliatory tariffs that include agricultural goods. By Wednesday, the United States carved out a month-long tariff exemption for a specific industry: automakers.
In his address to Congress on March 4, Trump asked farmers to “bear with me” as this tariff dispute commences.
All this movement in such a short amount of time leaves ag producers wondering what new developments will take place as tariffs start hitting their books. One Reuters report quoted an Alberta feedlot owner who said a truckload of fattened cattle heading south could be tagged with a $28,000 bill due to tariffs. Canada exports most of its beef, mostly to U.S. buyers.
Stovall said Montana’s elected officials in D.C. have asked for communications “virtually daily” about impacts on farmers and ranchers. At this stage, much of the talk is on potential impacts.
“There’s just a lot of uncertainty of what is the right decision,” Stovall said.
Grain producers are concerned about the costs of importing potash, a key fertilizer ingredient. Around 85% of potash comes from Canada for American producers. The American Farm Bureau Federation issued a statement from its president, Zippy Duvall, warning about potash costs and saying the trade war is likely to take a toll, as producers are already in the red.
“For the third straight year, farmers are losing money on almost every major crop planted,” Duvall’s statement said. “Adding even more costs and reducing markets for American agricultural goods could create an economic burden some farmers may not be able to bear.”
Klayton Lohr, president of the Montana Grain Growers Association, told MTFP that conversations centered on tariffs when he was in Denver last week at the Commodity Classic convention. A fourth-generation farmer near Devon, Montana, Lohr estimated that fertilizer prices could rise by $100 or $200 per ton, mostly due to tariffs on potash. But those aren’t the only impacts he’s watching for.
“I know of a farmer up in my area who sold some durum grain up to Canada, and it was right there in the contract that if the tariffs went into place, the contract was null and void” due to difficulties agreeing on a price, Lohr said on Wednesday.
And for equipment purchases, Lohr said Canadian sellers are often his first call if he can’t get what he needs locally. He operates a few dozen miles from the Canadian border, and he’s waiting to see how tariffs and retaliatory measures by Canada will affect those purchases.
Lisa Schmidt is a Conrad-area rancher and member of the Golden Triangle Resource Council. She runs a smaller ranching operation and relies on direct sales rather than commodity markets. But she’s working on another part of the ag supply chain that could be hit by tariffs. She’s in the early stages of renovating a historic Conrad building into a manufacturing kitchen and packaging site. She said her construction suppliers are bracing for higher prices.
“After the November election, my electrician calls me and he said, ‘If you want to buy the electrical stuff, you better buy it now because my supplier sent me a note that in three weeks we’re raising prices in anticipation of these tariffs,’” she said.
Lohr, with the Montana Grain Growers Association, noted that producers have been through this before. He recalled the previous Trump administration’s trade war with the same countries. In response to what the administration called “unjustified retaliatory tariffs,” the USDA announced in 2019 a relief package for farmers worth $16 billion.
Lohr said this was a crucial step to keep producers in business, and he’s glad the administration made the move in 2019. He’s hopeful producers won’t get left in bad financial shape due to tariffs. In Denver last week, he felt reassured by a speech given by Secretary of Agriculture Brooke Rollins, who mentioned the rollout of a $20 billion natural disaster relief package that was passed in the waning months of the Biden administration.
“She did say that no matter what, they weren’t going to forget about us,” Lohr recalled from Rollins’ comments.
With or without additional aid, he’s also concerned about the perception that his industry is getting during these financial struggles. One perception is that outsiders view that kind of relief as a kind of welfare, as Lohr put it.
Another, perhaps more important challenge, Lohr said, is whether younger farmers and ranchers will continue to view the work as worthwhile in these financial conditions. The average age of farmers has been increasing and was 58 in 2022, according to the most recent USDA survey (in Montana, the average age of a farmer is 59).
“With that situation, that’s why you see so many farms not being passed onto the next generation,” Lohr said. “There isn’t the cash flow there to support a family anymore.”