Trade reg changes could boost US feed ingredient market to Cuba

© iStock.com/chombosan

The Engage Cuba Coalition is calling for changes in US policy toward Cuba that could boost flagging sales of feed ingredients. 

A recent report from the coalition reports that the US has been losing market share to other countries including the European Union, Brazil and Argentina and suggests that altering some policies could reverse the trend as the Cuban tourism industry develops.

“Significant opportunities exist for American agribusiness in Cuba, from exporters of agricultural commodities and food products to associated industries that will benefit from greater market access,” found the authors of the report. “Demand for high quality US agricultural products is driven not only by the increasingly middle class Cuban population of 11m, but also by remittances and tourism, which is expected to rise dramatically.”

Several US feed and feed ingredient groups have said previously they support trade with Cuba.

“It is legal for us to sell there, but there are still a whole bunch of hurtles,” said Patrick Delany, policy communications director with the American Soybean Association (ASA). “From a legislative standpoint, we are working to support legislation that would reduce those barriers.”

The country represents a growing market for several agricultural products, he told FeedNavigator. But with the current restrictions in place it makes sense that they would buy from other countries.

“They’re right in our backyard,” he added.

Legislative changes

Currently, the coalition is calling for the ability to let US exporters extend credit to buyers in Cuba as other countries are able to offer financing, said officials. The Trade Sanction Reform and Export Enhancement Act (TSRA) from 2000 limits US exporters' ability to offer similar credit.

From 2003 to 2012 the US fell from its position as Cuba's top supplier of agricultural products, like feed and feed ingredients, to fourth, they said.

The coalition is backing several pieces of legislation relating to trade in Cuba that seek to end the current embargo and related restrictions, and establish more regular trade.

“Exports to Cuba have considerable room for growth if changes in US policies open opportunities for agricultural trade with Cuba and allow US exporters to offer credit, export and technical assistance, and market development programs,” they said.

Trade picture

Currently Cuba imports about 80% of its food, said Coalition officials. And in 2014, that totaled about $2bn of imported products.

“Cuba’s main imports include dairy (14%), soy products (13%), wheat (13%), corn (11%), rice (10%), and poultry (10%),” according to the report. “The top US agricultural exports to Cuba are poultry, corn, and soybeans.”

But the US share of that export market fell to about 10% in fiscal year (FY) 2015, down from about 15% in fiscal year 2014, noted the coalition.

At the state level, this could mean new trading opportunities for several states including Arkansas, Kansas and Illinois, said Coalition officials.

“Illinois is the top US soybean exporter, nearing $3.4bn in FY2014,” said officials. “Soybeans and soybean meal will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. Already, in FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). The US used to be a major supplier, but has lost soybean product market share to Argentina and Brazil.”

Arkansas is an exporter of feed crops including corn and soybeans, while Kansas also exports those feed crops along with wheat, they said. In fiscal year 2009, the US had about 43% of the market share on wheat imported to Cuba, but hasn’t shipped any there since FY2011.

Other states that could see improved trade if regulations change, include Georgia, Louisiana, Minnesota and Nebraska, they said. "Soybeans, Louisiana’s top export, will be increasingly important as Cuba’s livestock sector develops in the longer term," they added.

Additionally, states that grow and export large amounts of corn, like Minnesota, Nebraska and Ohio, also could see benefits from improved trade, they said. US exports of corn to Cuba have fallen from $28m to $4.9m in recent years as competition from other countries increased.

Related News

© iStock.com

US swaps top ag products trading partner

'Consolidated texts in a trade negotiation are not the same thing as an outcome' - EU Trade Commissioner - Image: © istock.com/designer491

Alarmist headlines (on TTIP) are a storm in a teacup: EU trade policy chief

© iStock

US feed database may be set to see updates

Has the US feed industry been left reeling or is it rejoicing over Trump triumph? © istock/scarletsails

Trump wins: tell us what this result means for the feed industry

© iStock/bugphai

US feed sector asks Trump to continue to back trade with Cuba

© iStock/Thisisdavid88

AFIA on trade in Trump era: 'Think outside the box'

© istock

EU parliament backs trade deal with Canada

'We believe it is important to listen and engage in constructive dialogue about this issue, and advocate for what we believe is right.' Cargill's Serena Lin

US: Cargill calls for responsible trade, immigration policy

© iStock

Feed industry needs to cheerlead for trade

Precision feeding key to sustainable livestock production, says UN body

Precision feeding key to sustainable livestock production, says UN body

US feed sector weighs up Cuban market potential

US feed sector weighs up Cuban market potential

AFIA welcomes advance in US trade negotiating authority debate

AFIA welcomes advance in US trade negotiating authority debate

‘The future growth of the US feed industry lies in exports’: AFIA welcomes Trade Promotion Authority (TPA) bill initiative

‘The future growth of the US feed industry lies in exports’: AFIA welcomes Trade Promotion Authority (TPA) bill initiative

© iStock.com/Thisisdavid88

TPP approval could offer tariff reduction, increased demand for US feed

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.