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November 8, 2017
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Chinese eCommerce Giant Makes Deal for Montana Beef

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Chinese eCommerce Giant Makes Deal for Montana Beef
Billings Gazette

A Chinese eCommerce giant, JD.com, has struck a $300 million beef deal with the Montana Stockgrowers Association, including $100 million for a new slaughterhouse.

JD.com signed the agreement with Montana's largest livestock organization in mid-October, but kept it under wraps until President Donald Trump's visit Wednesday to China.

Stockgrower's Executive Vice President Errol Rice and Miles City Rancher Fred Wacker were in Beijing for the signing ceremony.

Ranchers will supply $200 million worth of Montana-sourced beef to JD.com starting in January and continuing through 2020. Construction on a packing plant is expected to start next spring, according to the terms in the October memorandum of agreement.

The location for the slaughterhouse hasn't been announced.

The deal stems from a Sept. 9 meeting with in Maudlow arranged by U.S. Sen Steve Daines, R-Mont. 

Wacker, of Miles City, would like to see Montana break away from the processing herd by butchering its own beef and selling it under the Montana brand. 

Wacker was all ears as China's Ambassador to the United States, Cui Tiankai, suggested that acquiring Chinese investors would give Montana beef a leg up in China.

"We have the land, we have the cattle, we have the quality, we have the water," Wacker said. "We have the interest in putting in a major processing plant here, and we also have a very high-quality product."

Montana's agriculture community is no stranger to foreign investment. Most of the grain elevators in the state are owned by Japanese companies determined to secure supply and control quality of U.S. wheat.

The Chinese are already investing in Montana, to the tune of $17 million, said China's Ambassador to the United States, Cui Tiankai.

Beijing-based Goldwind, the world's second-largest manufacturer of wind turbines, built a 14-turbine wind farm near Shawmut in 2012. The turbines are made in China. The wind farm will supply electricity to NorthWestern Energy into the 2030s.

"When export of Montana beef to China is more or less stabilized, and channels are established, we could find your main buyers in China, Chinese companies that import a lot of Montana beef," Cui said. "And maybe with the help of some Chinese banks, like China Bank in New York, they could invest in the infrastructure here, insure a stable and long-lasting supply."

Wacker, who raises antibiotic-free, implant-free Angus cattle for Whole Foods, broached the subject of a rare, Montana-specific beef sale to China, which reopened its markets to U.S. beef after a 13-year ban stemming from a 2003 Washington state case of bovine spongiform encephalopathy, better known as mad cow disease.

Cui spoke frankly at the Maudlow meeting about what it will take to sell Montana beef in China, the world's second-largest beef consuming nation. Cui indicated that investment by a Chinese business in Montana beef development would move things along.

Ranchers have watched with their noses pressed up against the glass as Chinese restaurants and supermarkets served up increasing amounts of beef from other countries. China imported 825,000 tons of beef in 2016.

Itís been 33 years since Montana had a meatpacking plant of significant size. The last, Pierce Packing Co., of Billings tore a 500-jobs-lost hole in the Billings economy when it closed in 1984. Pierce was a regional giant, but the consolidation in the U.S. meatpacking industry pushed the 50-year-old company to extinction.

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