July 6, 2015

Commodity Organization Explore Opportunities With Cuba

Nine farmer leaders and staff members from the U.S. Grains Council (USGC), the National Corn Growers Association (NCGA) and the North Dakota Barley Council (NDBC) traveled to Cuba last week to see first-hand opportunities for expanding U.S. coarse grain exports if trade is fully normalized with the island nation.  The mission was part of an ongoing effort by the grains industry to assess and build plans to address marketing, financial and educational barriers to increase sales to Cuba. As the overseas market development organization for corn, barley, sorghum and grain co-products, the Council is considering how best to engage the Cuban market with partnerships and programs.

“Cuba could be a growing market for U.S. corn, but our own policies are standing in the way,” said USGC Chairman Ron Gray. “A major lesson from this trip was that the embargo has created an environment where our competitors such as Brazil dominate the market. If policy allowed us to help develop the Cuban market, we might be able to retake our dominant position.”

Cuba has purchased corn from the United States since the early 2000s, with market share varying widely from as high as 100 percent to just 15 percent last marketing year. The country has purchased distiller’s dried grains with solubles (DDGS), a byproduct of the ethanol manufacturing process, from the United States since 2005. If Cuba purchased all of its imported corn from the United States, it would be the 12th largest overseas market for the product.

The grain industry groups visited with government officials in the Cuban Ministry of Foreign Affairs, Ministry of Agriculture and Ministry of Foreign Trade and Investments. Stops also included a Cuban port and visits to rice and corn operations.

“The Cubans are excited to engage with the United States and want to learn more from the U.S. agriculture industry about poultry and dairy production in particular,” said Rob Elliott, NCGA first vice president. “Hopefully we can continue this dialogue and exchange of ideas that will be beneficial for both countries.”

According to previous USGC assessments, Cuba has no broiler production and limited egg production. And, while imports from the United States are limited by longstanding policy, a lack of dollars and credit challenges, the Cuban government wants its agriculture sector to grow. In addition, the Cuban people and foreign tourists could demand more meat products in their diet as the country’s economy improves.

“We have an opportunity to work with the Cuban people to build their industries and, at the same time, build demand for our grain,” Gray said. “The Council has used this model all over the world, and it’s clear that type of engagement could now also work in Cuba given the right conditions.”

Although there are significant opportunities in this market for U.S. coarse grains and co-products, current restrictions imposed by the U.S. government severely hinder Cuba’s trade prospects.

“This mission reaffirmed that it’s time for a new U.S. policy toward Cuba, and now is the time to act,” Elliott said. “There are several bills before Congress to ease the embargo. NCGA will continue to educate Congress on the importance of the U.S.-Cuba relationship. We are committed to advancing legislation that will reduce trade barriers, normalize trade relations and help us build a two-way trade relationship.”


USDA Hogs and Pigs Report Shows Continued Expansion

According to the USDA, the US inventory of all hogs and pigs on June 1 was 66.9 million head. That’s up nine percent from one year ago and up slightly from the March report. The breeding swine inventory totaled 5.9 million head, up one percent from last year, but down one percent from last quarter. The market hog inventory was at 61 million head, up nine percent from last year and up one percent from the last quarterly report.

Jim Robb, who is with the Livestock Marketing Center, uses the US national average weighted basis price when forecasting hog prices. In addition to the USDA numbers, Robb expects pork imports over the balance of this year impacting prices…

Robb 1

David Miller, who is the director of research and commodity services, for the Iowa Farm Bureau Federation, is seeing a geographic shift in hog production…

Miller 2

Miller says there were more hogs on feed in the under 50 pound category for every state, except Minnesota.


From Bacon to Booze, Thumbs-Up for TPA Passage

The farmer leaders of the American Soybean Association  applauded the Senate for a vote Wednesday that advances trade promotion authority (TPA) to President Barack Obama’s desk, and called on the president to sign the bill as quickly as possible, citing the importance of TPA in creating and strengthening international trade agreements.

“The Senate voted to bring the U.S. back to the international bargaining table,” said ASA President and Texas soybean farmer Wade Cowan. “With negotiators fully equipped and empowered, we no longer have to miss out on the global network of trading partnerships that continues to grow, even in our absence.”

Cowan pointed to the importance of the Senate’s vote in moving toward finalizing negotiations on the Trans-Pacific Partnership.

“Most immediately, the Senate’s vote puts us back on track in terms of finalizing a Trans-Pacific Partnership that includes vital export markets for U.S. soybeans and meats, as well as the developing markets that grow in their demand for American soy every day,” Cowan said. “We can now move to enact a high-standard TPP that further opens valuable markets and doesn’t put our farmers at a disadvantage.”

The National Corn Growers Association also cheered passage of TPA, following last week’s vote in the House of Representatives.

“Today is a huge victory for America’s corn farmers and the entire agricultural industry,” said Chip Bowling, a Maryland farmer and president of NCGA. “Ag exports are a major driver of the U.S. economy, supporting more than one million jobs. With greater market access, American farmers and ranchers can do even more. Thank you to both the Senate and the House of Representatives for passing Trade Promotion Authority. We look forward to a quick signature by the President.”

The National Milk Producers Federation and the U.S. Dairy Export Council are thanking the Senate for passing TPA.

The two dairy groups also praised Senate passage of complementary Trade Adjustment Assistance legislation to help those who lose jobs as a result of trade. They urged the House to quickly approve TAA and send it to the president as well.

NMPF and USDEC said Trade Promotion Authority is crucial to negotiating a better deal for dairy farmers in the pending Trans-Pacific Partnership.

With passage of legislation granting the president authority to finalize free trade agreements, the National Pork Producers Council called on U.S. trade negotiators to conclude the Trans-Pacific Partnership (TPP), an Asia-Pacific regional trade deal.

“We applaud Congress for approving TPA, which is imperative for finalizing free trade agreements that boost U.S. exports and create U.S. jobs,” said NPPC President Dr. Ron Prestage, a veterinarian and pork producer from Camden, S.C. “Now we need U.S. trade negotiators to get the best deal possible from the other TPP countries and to finalize one of the most significant regional trade agreements ever.”

The TPP talks among the United States and 11 Pacific Rim countries would generate 10,000 U.S. jobs tied to pork exports, according to Iowa State University economist Dermot Hayes. The U.S. pork industry would see exponential growth in exports to the TPP countries.

The Distilled Spirits Council, representing over 135 distillers of all sizes, applauded the Senate for passing TPA, which will help the United States to further open markets for U.S. distilled spirits exports.

“There is a growing global demand for U.S. spirits,” said Distilled Spirits Council President and CEO Peter H. Cressy, noting that American spirits are exported to as many as 130 countries around the world. “Trade agreements have contributed directly to record U.S. spirits exports, which have more than doubled over the past decade.”

In 2014, global U.S. spirits exports reached an all-time high of over $1.5 billion, the eighth consecutive year that exports of American-made spirits exceeded the billion dollar mark.

The National Cattlemen’s Beef Association strongly supports TPA for securing future free trade deals that will boost American exports.

“Trade Promotion Authority gives Congress the ability to set definitive goals for the President in negotiations, and then requires any deal be brought back for final approval,” said Philip Ellis, NCBA President. “TPA does not give the President free rein to make trade deals. Without TPA, it would be virtually impossible to negotiate future agreements with other countries, which would hinder our ability to gain greater access into foreign markets.”

Over 12 million American jobs depend on exports, and with the renewal of TPA, valuable free trade agreements such as the Trans-Pacific Partnership can move forward. In 2014, U.S. beef exports accounted for over $7 billion in total sales and added over $350 in value for every head of cattle sold. That is value that is brought back to all segments of the industry and Ellis, a cow/calf producer from Wyoming, said that is a lot of added value to his bottom line.