JD.com plans slaughterhouse in Montana

JD.com plans slaughterhouse in Montana

In November 2017, JD.com signed the agreement to spend up to 100 million USD to build Montana’s largest meat processing facility. The commitment was part of a deal the mega-retailer made with the Montana Stockgrowers Association to buy 200 million USD worth of beef from the state. The move is part of a much larger push by Chinese companies to buy into the U.S. animal agriculture industry, as the middle class there grows increasingly interested in what they see as a safer, higher-quality source of food. Demand from China is also driving growth in the dairy, poultry, and pork sectors throughout the U.S.

China banned beef imports from the U.S. in 2003 following an outbreak of mad cow disease, but last spring the Trump administration and Chinese government began renegotiating that policy. Montana Senator Steve Daines wanted to make sure his state was first in line if those markets did reopen, and last April he brought a red cooler with four Montana steaks to a meeting with Chinese Premier Li Keqiang in Beijing. In June, the Chinese government lifted the ban, and when JD.com approached the Chinese General Chamber of Commerce about finding a source of U.S. beef, Montana was top of mind.

Montana doesn’t produce enough meat right now to supply everything the Stockgrowers Association promised to JD.com, which is why the deal also includes plans to build a slaughterhouse to boost the industry. In January of 2016, for example, Nebraska had about 2.5 times as many cows as Montana, but according to data from the U.S. Department of Agriculture it processed and sold more than 400 times as much meat that year. Many of the cows slaughtered in Nebraska come from other states, including Montana.

Meat processing plants in Montana can’t compete with slaughterhouses in the Midwest because the state doesn’t have the same access to local corn or soybeans to fatten the cows before slaughter. However, Errol Rice, executive vice president of the Stockgrowers Association, says that part of the 100 million USD investment could go toward expanding feedlots near the new facility and using Montana barley or new varieties of corn that grow well in the state. That would likely require many Montana farmers to switch from wheat production to those feed crops. Along with cattle, wheat is one of the most important agricultural products in the state, and getting farmers to switch might not be so easy.

The agreement signed in November includes almost no details about what the facility would look like, but it says construction could begin as early as this spring. This month, the Stockgrowers Association hopes to start discussions about what the investment will look like.

The group doesn’t have an exact blueprint for the slaughterhouse yet, and the agreement signed in November isn’t legally binding. But Rice said the starting point for those discussions will be based on a feasibility study conducted in 2014 by the nonprofit One Montana, which seeks to connect people in urban and rural parts of the state.

The facility described in the One Montana plan would process about 250 cows and bison per day, which isn’t as big as some of the operations in the Midwest, which can process as many as 5,000 animals a day, but would dwarf the ones currently in Montana. According to the study, this plant would process three times as many cows as all other slaughterhouses in the state combined.