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Cuba Exploration Offers Iowa Corn Farmer Key Market Insights

March 24, 2016

As President Barack Obama and U.S. Secretary of Agriculture Tom Vilsack wrap up their historic visit to Cuba this week, Iowa’s farmers continue to closely follow these developments and stand poised to expand agricultural exports to the country and the rest of the region.

The Iowa Economic Development Authority (IEDA) led a delegation from Iowa on an exploratory mission to Cuba last month including Iowa Corn Growers Association (ICGA) Chairman Jerry Mohr, a farmer from Eldridge, Iowa. Mohr and Iowa representatives toured farms, agriculture facilities and other sites to learn about Cuba’s changing economy and market opportunities.

There is no embargo on U.S. food exports to Cuba. The U.S. Department of Agriculture (USDA) recently reported sales of 984,200 bushels of U.S. corn to Cuba valued at $4.4 million so far this marketing year, highlighting the potential of the Cuban market for market developers such as the U.S. Grains Council (USGC). The Iowa Corn Promotion Board (ICPB) invests checkoff dollars in USGC and the U.S. Meat Export Federation (USMEF) for the export of corn and corn value-added products.

“Overall, the U.S. will be facing tough competition from Brazil and other exporting countries,” explained Mohr. “There is a potential for ethanol to be imported to supplement the country’s sugar cane production. They are desperately in short supply of quality meats and grocery products to feed their people. We will have the opportunity with our fine Iowa meat products to export meat and milk to Cuba when and if Congress votes to end the sanctions.”

Mohr said one of the challenges for U.S. agriculture exports to Cuba remains the effective credit embargo requiring all transactions with U.S. suppliers to be in cash. “This has been a real problem. Also, the embargo impacts other agricultural exports that are excluded from trade with Cuba,” he stated.

Mohr noted several other observations regarding Cuba’s agricultural industry and its infrastructure:

  • Millions of acres of farmland in Cuba have been out of production for many years, if the land becomes abandoned it will then revert to its native state.
  • The principal crops produced include sugar cane, coffee, bananas, and citrus. Rice, vegetables and tobacco also make up the country’s domestically produced crops.
  • The meat business in Cuba continues to expand, but cannot support the country’s population nor the anticipated arrival of tourists. Food shortages of milk and milk products persist. A key staple in Cuban’s diets include chicken, goat, duck and pork products.
  • Brazil recently built a huge port on the south side of the island to handle the increased shipping that is to be expected. Although the United States has a logistical advantage due to its proximity.

Mohr summarized that the country’s infrastructure poses the greatest challenge to its ability to catch up with the rest of the world, however as an export market the country holds great promise.

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The Iowa Corn Promotion Board (ICPB), works to develop and defend markets, fund research, and provide education about corn and corn products. The Iowa Corn Growers Association (ICGA) is an 8,000-member strong grassroots-driven organization, headquartered in Johnston, Iowa, serving members across the state, and lobbying on agricultural issues on behalf of its farmer members to create opportunities for long-term Iowa corn grower profitability. For more information, visit iowacorn.org.

For More Information:

Shannon Textor
Director of Marketing and Communications
Iowa Corn Growers Association
515-225-9242
stextor@iowacorn.org

Lisa Cassady
Public Relations Manager
Iowa Corn Growers Association
515-225-9242
lcassady@iowacorn.org

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