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Cuban grain sales make dollars & sense | ||
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A billion dollar market for food and feed lies 90 miles off the coast of the U.S.; yet for the past 40 years it could as well have been on the moon. That may be changing. A joint venture in grain marketing between Farmland and Archer Daniels Midland (ADM) Company sold 66.1 million pounds of wheat with an estimated value of $3.5 million to the estranged island nation early this year. Under the same special deal authorized by Congress, ADM sold corn, soybeans, rice and soybean meal to Cuba. Tim Daugherty, Farmland region vice president, hopes these sales are only the beginning. “We realize this particular sale is the exception and not the rule,” said Daugherty. “Our hope is that it puts a crack in the dike. Fifteen percent of the world’s wheat consumption is off limits to U.S. producers due to sanctions. Our hope is that this small transaction will cause a reassessment of the sanctions that limit our producers’ ability to market.” Cuba, with its 12 million consumers, has been subject to a U.S. trade embargo that has included feed and food since 1962. In 2001, Congress opened the door to trade by exempting food from U.S. trade sanctions. Prohibition of public or private financing of such sales to Cuba, as well as the importation of Cuban products, caused Cuban president Fidel Castro to reject purchase of U.S. food or medicine. It wasn’t until Hurricane Michelle struck the island nation this past November that sales to Cuba finally took place. ADM/Farmland moved quickly to fill needs created by the disaster. Agreements were signed with the Cuban food import company Alimport for eight shipments of corn, wheat, soy, rice and soybean meal by the end of February. Alimport’s purchases from U.S. suppliers of chicken and other products brought total sales to $30 million. “Clearly Cuba has been able to fill its substantial food import requirements without U.S. participation for the past 40 years,” explained Larry Cunningham, senior vice president, ADM. “Yet in the aftermath of Hurricane Michelle, no other country could have responded as quickly and completely as the U.S. In fact, our first shipment was deliv- ered to Havana less than 24 hours after loading in New Orleans. This speed and the freight savings due to our proximity are attractive to Cubans.” Joe Royster manages the Dacoma Farmers’ Co-op, Dacoma, Okla. He is also on the Farmland Board, and serves on the ADM/Farmland Advisory Board. While even one-time grain sales will benefit his wheat producers, he sees the issue in broader terms. “This is the first step to open relations with Cuba and possibly other nations,” said Royster. “Communication with Congress is the ultimate key. Every farmer needs to contact Congress and tell them to open up these markets and not use food as a weapon.” One area Congress should focus on is finance restrictions, suggested Daugherty. “It is one thing to make a change, but another to put in hoops that almost eliminate a sale,” he explained. “The current statutes make it very difficult to do this kind of business. Congress must realize that American farmers need new markets and enhanced trade to survive in the future. “Through the ADM/Farmland partnership, the cooperative system is already reaping some trade benefits. This type of transaction with Cuba would have been very difficult, if not impossible, to achieve on our own.” |
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