USGC leader testifies at Cuba hearing, addresses DDGS potential

By U.S. Grains Council | June 11, 2015

A U.S. Grains Council leader recently testified at an International Trade Commission hearing looking at the effects of U.S. restrictions on trade with Cuba, telling commissioners that significant opportunities exist in that market for U.S. farmers if financial and other barriers are addressed.

Bill Christ, past chairman of the Illinois Corn Marketing Board and current leader of the USGC Western Hemisphere Advisory Team, appeared at the hearing on behalf of the organization and the grains industry.

The commission is an independent federal agency charged with investigating issues related to international trade. The hearing this week was one part of an investigation into the impacts of Cuba policy at the request of Congress. Other representatives at the hearing were from organizations focused on rice and dairy, Cargill and various legal and economic experts.

Christ described to commissioners how the recent shift in approach to Cuba has presented the council with an opportunity to reengage with this logical market of 11 million people just 90 miles south of U.S. territory.

Since the December announcement that the Obama Administration would seek to dismantle the 50-year-old restrictions on how companies and individuals interact with Cuba, the council has sent leaders to the country as part of an agriculture learning mission and followed up with a targeted trade servicing visit to help assess barriers and potential programs in the market. The council is also planning a follow-up mission in June for its officers and sister grower organization officers.

This level of attention reflects the significant potential for U.S. coarse grains exports to Cuba. Today, Cuba imports 900,000 metric tons (35.4 million bushels) of corn annually, with approximately 70 percent going to animal feed and 30 percent for human consumption. Since the country began buying U.S. corn in the early 2000s, U.S. market share there has been as high as 100 percent, but has fallen to just 15 percent last marketing year. If U.S. farmers could recapture all of that market share, Cuba would become the 12th largest importer of U.S. corn and would also have the potential to increase its usage of U.S. distiller’s dried grains with solubles (DDGS) and other grains.

Christ described in his testimony that while financing regulations make selling to the market more complex and expensive, lack of capital and access to U.S. dollars with which to buy commodities is also a significant challenge. The embargo allows very limited opportunities for Cubans to earn dollars from U.S. tourism or from exports to the United States, which assessment work has identified as an additional significant challenge to increased U.S. exports to Cuba.

He also testified about the work the council could do to help build Cuban livestock industries. Egg production in Cuba is limited, and Cuba has no broiler production. The government there is keen for private-sector cooperation in building both the poultry and swine industries, which opens up opportunities for the traditional market development work the Council has undertaken all around the world.

Christ’s full testimony is available here. More information about USGC’s engagement in Cuba is available in past Global Update stories here and in a video update here