Friday, May 20, 2011

Expanded U.S. farm exports to Cuba on horizon

Expanded U.S. farm exports to Cuba on horizon
Fri, 2011-05-20 14:31
Cary Blake

'Tense' might best describe the political relationship between the
United States and Cuba over the last 50 years. Yet, expanded efforts by
both governments over the last decade suggest that U.S. farm exports
could increase to the Caribbean island.

The U.S. placed a trade and travel embargo on Cuba 50 years ago shortly
after Fidel Castro assumed leadership. This action essentially
eliminated all U.S. trade with the communist nation.

Parr Rosson discussed U.S. - Cuba farm trade issues during the 2011
World Ag Expo in Tulare, Calif.

Rosson is an Extension agricultural economist and director of the Center
for North American Studies (CNAS) with Texas AgriLife Extension at Texas
A&M University, College Station, Texas. CNAS promotes agricultural
relationships between the U.S., Mexico and Canada, and works to resolve
trade issues.

Enacted U.S. legislation over the last decade and a technicality linked
to the Swiss Embassy have somewhat thawed U.S.-Cuban farm trade
relations. The Trade Sanctions Reform and Export Act of 2000 opened the
door to some U.S. farm, forestry, and medicinal trade with Cuba. Cuban
products are prohibited in the U.S.

The Swiss connection allows the U.S. to have an 'Interests Section'
office in Havana. The Cubans have an Interests Section office in
Washington, D.C. Potential U.S. farm exporters work with the Washington
office initially to pursue exports to Cuba. Alimport, the Cuban food
agency, buys U.S. products including farm goods.

Rosson says the U.S. exported $4 billion in farm products, mostly feed
stuffs, to Cuba from 2002 to 2008. About 95 percent of the total
included corn, wheat, soybeans and soybean meal.

The largest U.S. value-added product exported to Cuba is poultry. Other
export items include pork, dry beans and processed foods. Smaller
amounts of U.S.-grown apples, pears and grapes are exported to Cuba.

U.S. farm shipments to the island nation, located about 90 miles south
of the Florida Keys, fell 25 percent in 2009 due to decreased Cuban
revenues from its tourism and mined nickel industries.

U.S. grapes and Cuba

Fresh California grapes have been shipped to Cuba for the last several
years. Jim Howard of the California Table Grape Commission (CTGC),
Fresno, Calif., says the industry shipped 17,404 19-pound boxes of table
grapes to Cuba in 2010. USDA reported the export value at $439,000. That
breaks down to about $1.33 per pound.

"The table grape industry as a whole is always happy to have more
markets for our grapes," said Howard, CTGC vice president. "The better
the access to a market the better it is for the industry as a whole."

An even larger customer for California table grapes last year in the
Caribbean was the Dominican Republic located east of Cuba. The industry
shipped 410,000 boxes of grapes. USDA reported the export value at $7.2
million, or about 94 cents per pound.

"The Cuba market is underdeveloped in comparison with the Dominican
Republic," Howard said. "Over time, it is feasible that exports to Cuba
could grow to a comparable level. There is a lot of potential."

California table grapes are sold in more than 50 countries.

In a CNAS economic impact report, Rosson says 2009 California-to-Cuba
farm exports totaled a $9.5 million value. California farm products with
major export potential for export include cotton, grains, fruit, dairy,
poultry and processed foods.

Cuba is an important market for Texas farm products. CNAS estimates the
value of Texas agricultural products exported to Cuba in 2008 at about
$45 million. Major exported commodities included wheat, corn, animal
feeds, poultry and cotton.

Rosson says potential exists for Cuba to import Texas rice, grain
sorghum, beef and cattle, dairy products, planting seeds, horticultural
products, and a variety of processed foods.

Texas ports play a key role in facilitating exports to Cuba. In 2010,
$18 million in food and agricultural products moved to Cuba through
Texas ports.

Oklahoma farm products sold to Cuba in 2009 totaled about $9.2 million;
mostly frozen broilers and turkeys, wheat, animal feeds and pork.

CNAS pegs 2009 Louisiana farm export sales to Cuba at a whopping $240
million; Florida - $79 million; Virginia - $53 million; and Mississippi
- $22 million.

Every $1 in U.S. agricultural exports to Cuba in 2009, CNAS reports,
generated an additional $1.96 in business activity in the U.S. economy.

Critical to increased farm trade with Cuba is the approval of more U.S.
ports authorized for shipments. Feed stuffs are shipped from ports
including Fort Lauderdale, Fla.; Houston and Corpus Christi, Texas; and
Los Angeles, Calif., through bulk cargo facilities.

Most other farm goods must be shipped from Port Everglades in Fort
Lauderdale in containers by barge to Cuba.

"These extra transportation costs are a large disadvantage which hurts
the price competitiveness of U.S. farm products," Rosson said.
"Hopefully other port systems will be approved to allow more direct
shipping to Cuba to reduce costs."

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