What does progress with Cuba mean for US producers?
Corn Growers Joins Cuba Coalition in Call for Level Playing Field on Trade
WASHINGTON (Jan. 8, 2015) – The National Corn Growers Association today joins U.S. Department of Agriculture Secretary Tom Vilsack and fellow farm and food organizations seeking to end the United States’ embargo against Cuba and advance trade relations between the two nations.
The U.S. Agriculture Coalition for Cuba is composed of more than 30 U.S. agricultural and food organizations committed to building a deeper U.S.-Cuba relationship.
Although agricultural exports to Cuba are legal, the financing and trade restrictions have hampered the ability of American farmers to compete with other countries, such as Argentina and Brazil, which do not face the same restrictions. U.S. corn exports to Cuba have decreased from nearly 800,000 metric tons in 2008 to 200,000 tons in 2013.
NCGA President Chip Bowling issued the following statement:
“Cuba is not a level playing field for American farmers. It’s time we have a chance to better compete for Cuba’s business. NCGA has long supported normalized trade relations with Cuba, as part of our efforts to expand markets for U.S. corn and feed the world. We are proud to join this coalition. We will work closely with our fellow coalition members to advance a trade relationship with Cuba that is efficient, globally competitive, and benefits both nations.”
Agriculture Groups Unite to End Cuban Embargo
Washington, D.C. – January 9, 2014 – Prominent U.S. food and agriculture associations and companies, including the National Chicken Council, announced the formation of a coalition that seeks to advance trade relations between the United States and Cuba by ending the embargo policy. The U.S. Agriculture Coalition for Cuba (USACC) is supported by more than 30 agricultural organizations and companies committed to and united around the opportunity presented by a deeper U.S.-Cuba relationship.
“The historic policy changes announced by the President will take steps to make American farm and products more price competitive, which will expand choices for Cuban shoppers at the grocery store and create a new customer base for America’s farmers and ranchers,” said Agriculture Secretary Tom Vilsack.
The purpose of the USACC is to expand Cuba as a market for U.S. food and agriculture exports and address liberalizing trade between the United States and Cuba. The coalition will work to end the embargo and allow for open trade and investment.
“Changes to U.S. policy toward Cuba can support economic growth and well-being in both countries,” said Devry Boughner Vorwerk, Cargill Vice President and Chair of the USACC. “Improvements in Cuba market access allows for U.S. farmers, ranchers and food companies to serve a nearby market and the Cuban people gain improved access to healthy and affordable food and feed.”
Under current sanctions, U.S. food and agriculture companies can legally export to Cuba. However, financing and trade restrictions limit the ability of the U.S. industry to competitively serve the market. Increasingly, foreign competitors such as Canada, Brazil, and Argentina are able to win market share from the U.S. agriculture and food industry because those countries do not face the same restrictions on financing.
The USACC seeks to establish a more collaborative relationship with Cuban agricultural producers and support the import of food, beverages and other agricultural products produced in Cuba. Two-way trade is a critical step in advancing an efficient and globally competitive trade relationship.
U.S. Wheat Farmers Anticipate Increased Trade Opportunities with Cuba
Following is a joint statement from U.S. Wheat Associates and the National Association of Wheat Growers.
WASHINGTON, D.C. — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are pleased to be founding members of the U.S. Agricultural Coalition for Cuba (USACC). The organizations are encouraged by President Obama’s efforts to renew diplomatic relations with Cuba. However, it is unclear if these actions alone will be enough to restore the Cuban wheat market for U.S. farmers. That is why they share USACC’s mission to re-establish Cuba as a market for U.S. food and agricultural exports.
Cuba, which does not grow wheat commercially, is the largest wheat market in the Caribbean, purchasing almost all of its wheat from the European Union and Canada. In the recent past, Cuba has imported more than 16.3 million bushels (445,000 metric tons) of wheat in a single year from the United States, sales that today would represent a value of nearly $123 million. However, under current rules set by the Treasury Department’s Office of Foreign Assets Control, the United States can only export agricultural products to Cuba through the use of third-party, foreign banks, which makes facilitating trade burdensome and often more expensive for Cuba. Partly as a result, Cuba has not purchased U.S. wheat since 2011.
“U.S. wheat farmers are excited about the prospect of exporting more wheat to Cuba,” says NAWG President Paul Penner, a wheat farmer from Hillsboro, KS. “NAWG has long supported strengthened trade relations with Cuba and see this as a historic step in that direction.”
“The U.S. wheat industry applauds these efforts to normalize trade relations, which take concrete steps away from a policy approach towards Cuba that has accomplished little,” said USW President Alan Tracy. “If U.S. trade with Cuba can increasingly respond to economics rather than politics, we believe our wheat market share there will eventually grow from its current level of zero to around 80 to 90 percent, as it is in other Caribbean nations. We have a natural competitive advantage over other suppliers.”
Progress on Relations with Cuba Creates Multiple Opportunities for American Soy
Per an announcement from the White House today, the United States will begin the process of normalizing its relations with Cuba. The announcement brings with it significant implications for the agricultural trade sector, and as producers of the nation’s leading farm export, the American Soybean Association (ASA) cheered the news with the following statement from President Wade Cowan:
“Soybean growers are particularly excited about today’s announcement, specifically because of the promise that the Cuban marketplace holds for American beans, but also in the larger scope of trade’s ability to overcome even the most challenging geopolitical barriers. Trade builds bridges between nations, but it also generates real and concrete value for American farmers by expanding and strengthening our opportunities in foreign markets. Whether it’s the burgeoning Cuban demand for pork, poultry and dairy or that nation’s expanded demand for cooking oils, American soybeans have a significant market opening just off our own shores.
“More important in today’s announcement, however, are the implications for the Cuban people. While we have been able to sell our products in the country for decades, our Cuban customers were unable to secure the same financing and credit opportunities as other trade partners. Conversely, the restrictions on financing made it difficult for our products to compete in that marketplace. The easing of these restrictions will make it easier for American soy to gain a foothold in the market, but more importantly, it will enable the Cuban people to purchase the products that they need and want as their market develops.”
NCGA Welcomes News on Cuban Trade
The National Corn Growers Association welcomed President Obama’s announcement today that the United States and Cuba will seek to normalize relations between the two countries.
“Today’s announcement is good news for American corn farmers,” said NCGA President Chip Bowling. “We have long supported normalized trade relations with Cuba, as we seek to open markets and feed the world. We applaud the Administration for removing regulatory and financial barriers to trade with Cuba and leveling the playing field with other countries.”
Although the United States has allowed agricultural exports to Cuba since 2001, financing restrictions and other hurdles have limited the ability of U.S. agriculture to compete with other nations. U.S. agricultural exports to Cuba were valued at nearly $350 million in 2013, according to the U.S.-Cuba Trade and Economic Council.
“Cuba’s market of 11 million consumers represents a great opportunity to expand trade and increase exports for corn and other ag products,” Bowling added. “We will continue to work in close partnership with both the U.S. Grains Council and our livestock allies to promote corn, corn products, and high-quality protein as a nutrition source for consumers in Cuba and around the world.”
U.S. Wheat Farmers Anticipate Increased Trade Opportunities with Cuba
The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) applaud President Obama’s announcement today that the United States will begin discussions to renew diplomatic relations with Cuba, which will make it easier for Cuba to buy U.S. agricultural products, including wheat. We anticipate that these re-established trade relations will help open a market for U.S. wheat products in Cuba.
Cuba, which does not grow wheat commercially, is the largest wheat market in the Caribbean, purchasing almost all of its wheat from the European Union and Canada. Cuba could import at least 500,000 metric tons of wheat from the United States each year but has not purchased U.S. wheat since 2011. Under the current embargo, the United States can export agricultural products to Cuba through the use of third-party banking institutions, which makes facilitating trade burdensome and often more expensive.
“U.S. wheat farmers are excited about the prospect of exporting more wheat to Cuba,” says NAWG President Paul Penner. “NAWG has long supported strengthened trade relations with Cuba and see this as a historic step in that direction.”
“The U.S. wheat industry applauds these actions, which take concrete steps away from a policy approach towards Cuba that has accomplished little,” said USW President Alan Tracy. “If Cuba resumes purchases of U.S. wheat, we believe our market share there could grow from its current level of zero to around 80-90 percent, as it is in other Caribbean nations.”