Cuba offers small but attractive market

HAVANA, Cuba — The embargo that has kept many U.S. goods out of Cuba for more than 50 years could be loosened soon, but it remains an open question just what that would mean to American farmers.

Officials from farm organizations and trade groups in the United States generally support a loosening of restrictions that would allow more trade. But those groups also concede Cuba is a relatively small market and its direct impact on farmers and commodity prices would also be relatively small.

This is an island of about 11 million people and it is a poor nation. On the other hand, it is only 90 miles from Florida, and the United States would have some advantages over other nations in regard to shipping costs.

Juan Jose Leon Vega, an ambassador with the ministry of agriculture in Cuba, says Cuba needs about 700,000 tons of corn and 350,000 tons of soybeans to meet its feed needs. Cuba produces eggs and pork, but it buys chicken from the United States, generally hindquarters and other less expensive cuts.

He says it imports about 20,000 tons of beef, mostly specialized cuts for the hotel industry. It also imports powdered milk from places such as Europe and New Zealand.

USDA Economic Research Service statistics indicate the United States exported about $200 million worth of agricultural products to Cuba in 2015. That is down from a peak of about $685 million in 2008, and it includes chickens, soybean meal, soybeans, corn and other items.

If the embargo were to be lifted, there could be a potential for the U.S. to sell rice, wheat, nonfat dried milk and dried beans. Right now, the county gets rice from Vietnam and many other products from Asia or Europe.

If rules were changed to help open Cuba up to U.S. tourists, it could also create more of a market for finished products such as meat, but the Cubans would likely put their first emphasis on importing feed rather than meat, Leon says.

Officials at the U.S. Grains Council say U.S. corn exports to Cuba have decreased from nearly 800,000 metric tons in 2008 to only about 26,000 metric tons in 2015. Today, they say, Cuba imports about 900,000 metric tons of corn annually from around the world.

If the U.S. were to claim all of that corn market in Cuba, it would make Cuba the 10th largest corn market for the U.S.

There are other needs. Aurelio Mollineda Martinez, director general of Gecomex (an export-import company in Cuba), points to an example when the country’s planned economy suddenly fell short of NPK fertilizer and needed some quickly. Officials were forced to buy from Asia, and that took about 15 days to arrive. They could not get credit to buy from the United States, which could have provided a shipment in two or three days.

By Gene Lucht, Missouri Farmer Today

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