GREAT FALLS — Before his address to the nation and a joint session of Congress on Tuesday night, President Donald Trump had already issued additional tariffs on three of America’s largest trading partners including a 25% tariff on goods from Canada and Mexico and 10% on China.
Those measures are likely to have a significant impact on Montana agriculture, including one sector where the Treasure State leads the nation.
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Long before the President’s address, concerns about tariffs were growing in the agricultural community.
“Way back in January, these companies that sell into market, into the U.S. and to Canada have said we don't know what's going to happen,” said Flaxville area farmer Paul Kanning. “Because of that, we maybe need to cut back on what we're doing into Canada right now because we just don't know what the impacts are going to be.”
Kanning grows wheat, barley and canola. He also grows dry peas and lentils, which along with chickpeas make up pulse crops, of which Montana is the nation’s leading producer.
“Last year it was roughly 62% of the total U.S production came out of Montana, and it was valued at about $300 million,” said Kanning.
Kanning said when the United States imposes tariffs on products like steel or aluminum, farmers suffer in the form of retaliation.
“Oftentimes they retaliate against agriculture goods, including peas, lentils and chickpeas,” said Kanning.
Kanning said the timing of the tariffs is not ideal because farmers are still recovering from previous tariffs on China and India.
“At that time, it cut our worldwide exports by roughly 37%,” said Kanning. “We are just now starting to climb out of that hole and rebuild those relationships and mend all those partnerships.”
Kanning said those tariffs resulted in the government offering market facilitation programs, but the money provided was retroactive and most farmers don’t want to rely on subsidies.
He added that with no recourse for the people producers rely on to get the products to markets, they can lose industry partners.
He’s worried about the impact on the entire food chain and how it will affect Main Street Montana.
“When I get less cash in my pocket and I'm not going to go buy a new car or I'm not going to go, upgrade my equipment,” said Kanning.
Kanning said Canada is a significant and important trading partner for the pulse crop industry.
“There's a lot of pulses that go back and forth across the border. It's roughly about $200 million nationally that goes across the border each way,” said Kanning.
Kanning added China is a big export destination as well, especially when it comes to yellow peas.
“They use it for livestock feed and for human feed, and, and and they process a lot of the proteins,” said Kanning. “They understand how great these products are for protein.
Kanning is also worried about rising input costs resulting from tariffs. He uses fuel that’s burned from Canadian oil, chemicals to fight crop disease come from China, and Potash fertilizer comes from Saskatchewan.
“Does it cause stress? Absolutely,” said Kanning. “I mean, my neighbors are talking about what is it that I can grow this year that I can make a profit on it? Pulses were it. And I'm afraid that we may have knocked the last one off of the ladder here.”
Kanning said another issue that’s different from these tariffs is the availability of utilizing food aid programs as a relief valve.
“Typically, they're around 10% of our total exports,” said Kanning. “Last time they ramped up to 15 to 20%. However, right now food aid is highly disrupted, and we don't know what's going to happen there.”
Kanning said the disruption is a result of the newly created Department of Government Efficiency. He also said ocean shippers are worried they are not going to get paid for shipping the products that might normally go to places like the Middle East or Africa, meaning a lot of product is sitting idle.
Kanning is chairman of the USA Dry Pea and Lentil Council, and they’ve been vocal in Washington. He doesn’t consider himself an expert on world trade and has no idea how long these tariffs might last. He’s just hoping negotiators can resolve the issues soon.
“We don't want this to drag on through the summer and into harvest," said Kanning. "And we also would like them to be, enduring and persistent and lasting. So, we don't want to go through this 2 or 3 years down the road also.”
