July 3, 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.”


North, South Dakota Join Lawsuit Against EPA

Both North and South Dakota, along with 10 other western states have wasted no time in filing a lawsuit over the Waters of the U.S. rule. Attorneys General Wayne Stenehjem and Marty Jackley, along with their counter parts in Alaska, Arkansas, Arizona, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico and Wyoming filed the suit against the Environmental Protection Agency and the Army Corp of Engineers yesterday afternoon.  The filing comes just hours after EPA officially published the controversial rule in the Federal Register, opening the door to legal action.

In a statement, South Dakota Attorney General Marty Jackley says EPA has overstepped its authority:

Jackley 1

Jackley, along with attorneys general in 30 other state had filed comments critical of the rule prior to implementation.  Six other states have formed a separate lawsuit against EPA, but for any variety of reasons will be filing in separate court systems.

Specifically, the lawsuit involving North and South Dakota asks the U.S. Federal Court in Bismarck to throw out the rule and prevent either the Environmental Protection Agency or the Army Corp of Engineers from enforcing it.  The states argue they have primary authority over land and water, not the federal government and the broader definition of “waters of the U.S.” contained in the rule only widens federal jurisdiction.  The lawsuit also says the definitions of “significant nexus” and “ordinary high water mark” are vague.

EPA and the Army Corp on the other hand, have long argued the Waters of the U.S. rule makes it easier, not harder, to understand which waters are under their control.  They say all existing exemptions defined under the Clean Water Act will remain in place.

Under the 60 day notice period, the Waters of the U.S. rule will go into effect on August 28th barring judicial or legislative intervention



Closing Markets on Report Day

Closing Markets 6-30-2015