Montana Farmers Troubled by Tariffs

A $1.2 billion piece of Montana’s economy is likely to face tougher markets as tariffs erode favorable trade terms in Canada and China

By Tom Lutey for Montana Free Press

Tony Atkin / Sugar Beet and Ploughed Field

Montana farmers are worried about being whipsawed in a trade war as the United States trades tariffs on farm products with China, Canada and Mexico.

Wheat and lentil exports are likely to face tougher markets in the coming year as tariffs erode favorable trade terms in Canada and China, producers told Montana Free Press in mid-March.

The current trade war is in some ways similar to a 2018 tariff battle with China that pinched wheat values indirectly as displaced U.S. corn and soybeans negatively affected the demand for wheat. That year, federal subsidies to Montana farmers grew by $140 million to offset trade-related losses.

Montana ranks third among states for wheat production, with 5.2 million acres planted and at least $1 billion in sales in seven of the last 10 years, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service. Historically, about 80% of Montana wheat is exported, primarily to markets in the Asia-Pacific region.

Montana is also the top U.S. producer of lentils, with 720,000 acres planted in 2024 and $226 million in sales. Production values have tripled in the last decade, according to USDA. Canada has become a preferred buyer for lentil farmers along Montana’s Hi-Line.

But President Donald Trump’s trade war will be different from 2018, said Montana Farmers Union President Walt Schweitzer, in part because U.S. trade with China was permanently altered by the tariff fight seven years ago.

“China got busy and started building ports, railroads and distribution networks in our competitors’ backyard,” Schweitzer said. “They were helping build the infrastructure in Mexico, Brazil, Africa, Argentina, anywhere that was growing commodities that they needed to replace the U.S. market.”

Trade with China was complicated further by shipping challenges created by the first two years of the COVID-19 pandemic, which were also years of extreme drought in Montana.

“What happened is we lost our average market and so we had a lot of strong, stranded commodities with no home,” Schweitzer said. “And of course China had found other sources for corn and soybeans. Now, we’re really sitting on a surplus we shouldn’t have.”

Tariffs are a nuanced issue for the farmers union, Schweitzer said. The group’s national organization has long opposed unbridled free trade, arguing that protections are needed for United States producers. The National Farmers Union sided with Trump in 2017 when the president in his first term withdrew the United States from the Trans-Pacific Partnership, a 12-nation trade group created by the U.S. to serve as a counterbalance to China’s increasing influence in Asian commerce.

What farmers union members support is targeted tariffs as a countermeasure to imported commodities that destabilize U.S. food production, Schweitzer said.

When new tariffs on products from China, Canada and Mexico were imposed in early March, the National Farmers Union warned that tariff-induced instability would create economic uncertainty for the American farm economy.

Similarly, economists for the more pro-trade American Farm Bureau Federation cautioned Tuesday that Mexico, Canada and China are the top three markets for U.S. farm products, with purchases of $83.3 billion in 2024.

The pace at which tariffs have been imposed and then paused this month made it difficult to determine the consequences, according to the American Farm Bureau. Canada imposed a 25% retaliatory tariff on most U.S. products, with canola seed and rice being primary targets. China tariffs threatened $12.8 billion in U.S. soybean sales. A more modest $482 million in wheat sales impacted.

China has never been a big buyer of U.S. wheat, said Gordon Stoner, who farms in northeast Montana and has served on the National Association of Wheat Growers and regional pulse crop committees.

Trade war impacts on Montana cattle are hard to follow because, unlike crops, beef sales aren’t direct. In early March, the U.S. Meat Export Federation estimated that U.S. exports of red meat to Canada, Mexico and China were worth $8.4 billion in 2024. The value that export sales added to cattle slaughtered equated to $415 per head, and $66 per head for pork.

The risk to Montana wheat growers is that soybean trade with China could sour, compelling farmers in North Dakota who normally plant soybeans to instead plant wheat, Stoner said. Any increase in wheat production is likely to drive down what farmers are paid for the grain.

Stoner is also eyeing Canada’s escalating tariffs on farm products. He’s particularly concerned about Montana lentil exports to Canada.

“What happens is they import our product and they sell it to India,” Stoner said. “For those of us who live along the border, we can haul into Canada and get a good price.”

Montana is the largest lentil-producing state in the nation, followed closely by North Dakota and Washington. Montana farmers sold $226.6 million in lentils in 2024, according to USDA. All three northern-tier states benefit from lentil sales into Canada, which normally imposes no tariff on U.S. lentils. The northeast part of the state is Montana’s biggest production area.

Lentils weren’t targeted in Canada’s first tariffs on U.S. farm products, according to Canadian trade data, but there is a second tranche of tariffs coming in April. Whether lentils will be on the list remains to be seen.

Specific tariff impacts to the Montana commodities have not been mentioned by top state and federal elected officials.

Earlier in March, Governor Greg Gianforte framed President Trump’s tariff moves as necessary to address fentanyl coming into the United States. Trump also framed the tariffs as addressing illegal immigration and drugs while citing the International Emergency Economic Powers Act as his authority to impose them.

“The president has been clear he’s using tariffs as a negotiating technique first, to get compliance on the flow of fentanyl into our communities. And secondly, to get fair and reciprocal trade in place. Just, coming into this briefing, I saw that the Mexican tariffs have been postponed,” Gianforte said in a March 6 press conference. “So guess what? It’s working. You know, I don’t think he would have postponed the tariffs with Mexico, I don’t have all the details here in front of me, unless Mexico had been responsive to his request. So for the first time in a long time, we have a president that is negotiating on behalf of the American people. He said during his comments, it creates a little disruption in the short term, but I think Americans are prepared and understand the need for some of that disruption to get us in a better place. I’m proud of the fact that we finally have a president standing up for America in our in our trading relationships.”

Republican U.S. Senator Steve Daines is in China this week talking about trade deficits, according to Communications Director Rachel Dumke. Daines, who became a member of the Senate Foreign Relations Committee in January, lived in China more than 20 years ago while working for Proctor & Gamble.

Daines once delivered a red Igloo cooler full of Montana steaks to Chinese officials in Beijing in an attempt to court interest in Montana beef. The effort resulted in an agreement between Montana beef producers and China’s largest online grocer. The deal faltered in early 2018 at the start of Trump’s first trade war with China.

Daines says he’s bullish on Trump’s current trade plans.

“Ag is Montana’s number one economic driver, and with 95% of the world’s consumers outside the U.S., I look forward to working with President Trump and U.S. Trade Representative Jamieson Greer, and USDA Secretary Brooke Rollins to expand market access for our ag producers. I meet frequently with Montana farmers and ranchers and value their input. I’ll continue fighting for them in Washington,” Daines said in a written statement.