Cuba policy shift may benefit industry … later on

by Bryan Salvage
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KANSAS CITY, Mo. – On Dec. 17, President Barack Obama shocked many in the United States when he announced his administration was “updating its policy approach” to Cuba — the tiny nation of 11 million just 90 miles from the coast of Florida. The two countries haven’t had diplomatic relations in 53 years following the communist takeover of Cuba. Just how this move will benefit the US meat industry, should it come to full fruition, remains to be seen.

The US has exported some red meat to Cuba in the past, mostly pork and some beef items, Joe Schuele, communications director of the US Meat Export Federation (USMEF) told Meatpoultry.com. “The biggest obstacle with regard to US red meat exports to Cuba is [the Cuban people’s] lack of private-sector purchasing power rather than trade restrictions,” he added. “If the changes announced [Dec. 17] lead to economic growth in Cuba and generally a better business climate, then we would see some prospects for increased exports there. But it’s probably going to have to be a part of some broader change as opposed to just lifting trade restrictions.

“We shipped as much as $15 million in pork there in 2010,” Schuele said. “The peak for beef was in 2011, but it totaled less than $1 million. In the near term, the opportunities are more likely better for pork — but that may have as much to do with price points as it does with the cuisine.”

Another challenge is Cuba’s cold chain, which is a challenge in many Caribbean countries, Schuele said. “We have made some progress in some of the Caribbean islands in how to handle chilled meats and that has allowed us to achieve some export growth there,” he added. “We’ve not been able to utilize Market Access Program funds or checkoff funds in Cuba for any type of marketing or educational purposes, so that might change. If so, that’s an issue that we would likely address with importers there. Again, there probably needs to be some improvement in the business climate before you would see a lot of [US meat] products moving to Cuba. There is growth potential, but most likely longer-term in nature.”

In times like these when meat is in high demand, companies want to see a fairly reliable business climate before they’re going to invest too much effort into launching export, and that might be the most promising thing about the changes announced on Dec. 17, he continued. “If companies see [Cuba] might be a reliable destination over the next several years, that may spark some more interest. We’ll be watching this with interest. But I think change will probably be more gradual in nature as far as the buildup in meat demand.”

Meanwhile, the American Soybean Association (ASA) cheered news of the move to thaw relationships between the two countries.

“Soybean growers are particularly excited about [the Dec. 17] 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,” said Wade Cowan, ASA president. “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.”

According to a White House press release, key elements of the president’s new approach include:

• Establishing diplomatic relations with Cuba;
• Adjusting regulations to more effectively empower the Cuban people; and
• Facilitating an expansion of travel under general licenses for the 12 existing categories of travel to Cuba authorized by law.

Read more on the government's plan to normalize relations with Cuba.

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