US food companies still struggle for Cuban trade

Dive Brief:

  • Six months after President Obama further opened the gates to Cuba, U.S. food companies and producers are still struggling for big sales in Cuba. Sales to Cuba have dropped by almost half, from $160 million in Q1 2014 to $83 million in this year’s first quarter.
  • The main issues keeping the U.S. out of what could be a $2 billion market are the trade embargo in place, which severely limits the foods U.S. companies can send to Cuba — an embargo only Congress can lift.
  • U.S. food producers, from small farmers to major agribusinesses, have joined together to form a bipartisan entity, U.S. Agriculture Coalition for Cuba, to see what can be done about the embargo.

Dive Insight:

One of U.S. food producers’ main laments concerning the restrictive embargo is that while Cuba’s market is small at about 11 million people, it is “right in our target zone,” said Devry Boughner, vice president at Cargill Inc. and a co-founder of the U.S. Agriculture Coalition for Cuba. Instead of being able to take advantage of a profitable situation nearby, other countries that take several days or even weeks to ship food to Cuba are reaping the benefits.

However, the pushback doesn’t seem to be having any significant impact. “Despite a series of hearings, conferences, concerted lobbying and a stream of trade delegations to Cuba from both Republican and Democratic states this year, the embargo remains firmly in place, with little promise of early action,” The Washington Post reported.

To get rid of the embargo would mean lifting sanctions from Cuba that President Obama says have failed to effect change in the country for more than 50 years. However, that kind of controversy is not one that is welcome by a currently contentious Congress, so it’s unclear when some sort of move might be made to help U.S. food companies gain more access to their neighbor Cuba.

By Carolyn Heneghan, Food DIVE

June 19, 2015

 

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