2016.05.12 - prospects for u.s. agribusiness in cuba - le · *updated as of may 10, 2016 2 key...

Report produced by Engage Cuba, in coordination with Brian D. Healy, [email protected] (202) 720-8322, USDA-FAS, Office of Global Analysis, Global Policy Analysis Division. Alternate contact: [email protected]

Key Points American agribusiness continues to lose market share to the EU, Brazil, Argentina, and Vietnam due to current U.S. policies. The U.S. now ranks 5th in agricultural exports to Cuba.

Cuba’s agricultural imports are expected to grow as increased tourism fuels demand for food products, especially those of higher quality, and as remittances flow more freely due to U.S. policy revisions—all within the context of stagnant Cuban production.

If Congress were to change U.S. policy on agricultural exports to Cuba, U.S. exports would be more competitive and able to recapture lost market share.

Table of Contents U.S.-Cuba Overview………2 Alabama.……………………3 Arkansas…..……………….4 Georgia…...…………………5 Illinois…..……………….…..6 Iowa…..……………………...7 Indiana...…………………….8 Kansas...…………………….9 Louisiana...……..…………10 Minnesota..….…………….11 Mississippi….…………..…12 Missouri...………...………..13 Nebraska...………...……….14 North Dakota……...…….....15 Ohio………………...…….....16 Tennessee...………...………17 Texas……....………...………18

Prospects for U.S. Agribusiness in Cuba

*Updated as of May 10, 2016 2

Key Points

• American agribusiness continues to lose market share to the EU, Brazil, Argentina, and Vietnam due to current U.S. policies. The U.S. now ranks 5th in agricultural exports to Cuba.

• Cuba’s agricultural imports are expected to grow as increased tourism fuels demand for food products, especially those of higher quality, and as remittances flow more freely due to U.S. policy revisions—all within the context of stagnant Cuban production.

• If Congress were to change U.S. policy on agricultural exports to Cuba, U.S. exports would be more competitive and able to recapture lost market share.

U.S.-Cuba Overview Cuba imports up to 80% of its food. In 2015, Cuban agricultural imports totaled almost $2 billion, nearly doubling since 2004. Cuba’s main imports include rice (14%), poultry (13%), dairy (12%), soy products (12%), wheat (12%), and corn (9%). The top U.S. agricultural exports to Cuba are poultry, soybean meal, and corn.

As a result of U.S. policies, American agribusiness is losing ground to countries who are able to offer financing. The Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 prohibits U.S. exporters from extending credit to Cuba’s agricultural importers. Consequently, the U.S. fell from its position as the #1 or #2 supplier of agricultural products from 2003 to 2012; the U.S. is now Cuba’s #5 supplier after the EU, Brazil, Argentina, and Vietnam.

Significant opportunities exist for American agribusiness in Cuba, from exporters of agricultural commodities and food products to associated industries that will benefit from greater market access. Demand for high quality U.S. agricultural products is driven not only by the increasing purchasing power of 11 million Cubans, but also by remittances and tourism, which are expected to rise dramatically. In order to capitalize, we must change U.S. policy.

U.S. Losing Market Share in Cuba Value of U.S. Agricultural Exports to Cuba

Source: FAS Global Agricultural Trade System (GATS), Global Trade Atlas Source: USDA FAS, Global Agricultural Trade System (GATS)

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Opportunity Outlook: Alabama

Alabama exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. Alabama is the #2 U.S. exporter of poultry, reaching $478 million in broiler meat exports in 2014—almost one-third of the state’s total agricultural export value. In 2015, the U.S. exported $78 million in poultry meat to Cuba—comprising 36% of the market. This represents a significant loss in market share to Brazil, as the U.S. had held an average of 75% poultry market share in Cuba over the last decade. Cuba is consistently a significant export market for U.S. poultry: in 2015, Cuba was the 9th largest market for U.S. poultry exports. As a top poultry exporter, Alabama stands to gain from the increasing trend in Cuba’s poultry imports and recapturing market share from Brazil. Alabama’s other top exports, such as soybeans, wheat, feed and feed grains, will be increasingly important for Cuba’s agricultural imports as its livestock sector develops. In 2015, 12% of Cuba’s agricultural imports were soybean products (meal plus soybean oil), 12% wheat, and 4% feed and fodder. The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil.

Cuba’s Agricultural Imports, 2015 Alabama’s Top Agricultural Exports, 2014

Source: FAS Global Agricultural Trade System Source: USDA ERS

Top U.S. Broiler Chicken Exporters in 2014 Cuba’s Broiler Meat Imports

Source: USDA ERS Source: USDA FAS, PSD Database

Rice14%

Poultry Meat & Products

13%

Wheat12%

Dairy Products

12%Corn9%

Soybean Meal8%

Soybean Oil4%

Feed & Fodder

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Rank Commodity Value (millions) 1 Broiler Meat (Chicken) $478.0 2 Cotton $182.0 3 Other Plant Products $170.3 4 Other Oilseeds & Products $117.5 5 Soybeans $117.2 6 Other Livestock Products $71.2 7 Wheat $69.1 8 Other Poultry Products $66.0 9 Beef and Veal $58.8

10 Feeds & Feed Grains $39.8


Opportunity Outlook: Arkansas

Arkansas exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to offer credit, export and technical assistance, and market development programs. Arkansas is the #1 U.S. rice exporter. Cuba has the highest per capita rice consumption in the Western Hemisphere: about 177lbs per person, compared to 26lbs in the U.S. Prior to the embargo, Cuba was typically the largest market for U.S. long-grain rice exports. Since FY2009, Cuba has not imported any significant quantity of rice from the U.S. The U.S. held nearly 40% of market share in FY2004, but it has been lost to Vietnam and Brazil, who offer credit to Cuba. Arkansas is the #4 U.S. exporter of poultry, reaching $475 million in 2014. Approximately 10% of Cuba’s agricultural imports are poultry meat and poultry products. In spite of the embargo, Cuba is consistently a significant export market for U.S. poultry; in FY2015, Cuba was the 8th largest market for U.S. poultry exports. In 2014, the U.S. exported $148 million in poultry meat to Cuba—comprising 77% of the market—but fell to 52% market share at $96 million in 2015. As a top exporter, Arkansas stands to gain from growth in Cuba’s poultry imports and recapturing market share from Brazil, which owns 43% of the market as of FY2015. Soybeans and corn, Arkansas’s #1 and #7 exports, will be increasingly important as Cuba’s livestock sector develops in the longer term. Already, of Cuba’s nearly $2 billion in agricultural imports, 13% are soybean products (meal plus soybean oil) and 11% corn. The U.S. used to be a major supplier, but has lost market share to Argentina and Brazil. Cuba’s Agricultural Imports, FY2014 Arkansas’s Top Agricultural Exports, 2014

Source: Global Trade Atlas Source: USDA ERS Cuban Rice Imports: Lost U.S. Market Share Cuba’s Broiler Meat Imports

Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

Feed & Fodder

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Other24%

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Rank Commodity Value (millions) 1 Soybeans $995.5 2 Rice $809.3 3 Broiler Meat $475.0 4 Cotton $245.8 5 Soybean Meal $229.0 6 Other Poultry Products $146.3 7 Corn $127.7 8 Feeds & Feed Grains $127.6 9 Vegetable Oils $127.0

10 Processed Grain $110.2

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Total Imports Imports from U.S.



Opportunity Outlook: Georgia

Georgia exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. agricultural exports to Cuba totaled $300 million—representing 16% market share. However, one area where the U.S. has a dominant role is in the poultry market: in 2014, the U.S. exported $148 million in poultry meat to Cuba—comprising 77% of the market. Georgia is the top U.S. exporter of poultry, reaching almost $600 million in 2014. Approximately 10% of Cuba’s agricultural imports are poultry meat and poultry products. In spite of the embargo, Cuba is consistently a significant export market for U.S. poultry; in FY2014, Cuba was the 8th largest market for U.S. poultry exports. As the top exporter, Georgia stands to gain from the increasing trend in Cuba’s poultry imports and recapturing the market from Brazil. Soybeans and corn, some of Georgia’s top exports, will be increasingly important for Cuba’s agricultural imports as its livestock sector develops. In FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil) and 11% corn. The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil. Cuba’s Agricultural Imports, FY2014 Georgia’s Top Agricultural Exports, 2014

Source: Global Trade Atlas Source: USDA ERS



Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

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Rank Commodity Value (millions) 1 Cotton $688.6 2 Broiler Meat (Chicken) $596.3 3 Other Oilseeds $517.8 4 Other Plant Products $228.5 5 Tree Nuts $142.1 6 Other Poultry Products $107.1 7 Processed Vegetables $89.5 8 Soybeans $67.3 9 Corn $67.1

10 Dairy Products $63.7


Opportunity Outlook: Illinois

Illinois exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. agricultural exports to Cuba totaled $300 million—representing only 16% market share. The U.S. share of total exports fell to 10% in FY2015. As the #3 exporter of U.S. agricultural products, Illinois stands to gain from a change in U.S. policy toward Cuba. Illinois is the top U.S. soybean exporter, nearing $3.4 billion in FY2014. Soybeans and soybean meal will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. Already, in FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil. Corn, Illinois’s #2 export, presents significant export opportunity. Approximately 11% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share up to 64% in FY2012. However, U.S. exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. In FY2014, U.S. corn exports to Cuba were valued at $28 million, falling to $4.9 million in FY2015. Changes to U.S. policy on agricultural exports to Cuba would allow Illinois exporters to recapture lost market share. Cuba’s Agricultural Imports, FY2014 Illinois’s Top Agricultural Exports, 2014


Top U.S. Agricultural Exporters in 2014 Cuban Corn Imports: Lost U.S. Market Share

Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

Feed & Fodder

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Other24%

Rank Commodity Value (millions) 1 Soybeans $3,393.0 2 Corn $1,709.5 3 Feeds & Feed Grains $1,382.5 4 Soybean Meal $780.4 5 Pork $438.5 6 Vegetable Oils $433.0 7 Processed Grains $413.2 8 Other Plant Products $292.9 9 Wheat $149.7

10 Beef & Veal $71.1

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Corn Total Imports Corn Imports from U.S.


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Illinios Rankings for Agricultural Exports:Soybeans & Meal - #1

Corn - #1Feed - #1Pork - #4


Opportunity Outlook: Iowa

Iowa exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. As the #2 exporter of U.S. agricultural products, Iowa stands to gain from a change in U.S. policy toward Cuba. Iowa is a top U.S. exporter of soybeans, soybean meal, and feed grains, all of which will be increasingly important agricultural imports as Cuba’s livestock sector develops in the longer term. Already, in 2015, 12% of Cuba’s agricultural imports were soybean products. The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil. Opportunities for Iowa to export meat products like pork and beef to Cuba will increase as tourism and remittance growth are expected to fuel demand. Corn, Iowa’s #3 export, presents significant export opportunity. Approximately 9% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share nearly 60% in 2012. However, U.S. corn exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. Changes to U.S. policy on agricultural exports to Cuba would allow Iowa exporters to recapture lost market share. Cuba’s Agricultural Imports, 2015 Iowa’s Top Agricultural Exports, 2014



Rice14%


13%

Wheat12%

Dairy Products

12%Corn9%

Soybean Meal8%

Soybean Oil4%

Feed & Fodder

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Other24%

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Iowa Rankings for Agricultural Exports:Soybeans & Meal - #2

Corn - #2Feed - #2Pork - #1Beef - #4

Rank Commodity Value (millions) 1 Soybeans $3,088.6 2 Pork $2,325.1 3 Corn $1,662.1 4 Feeds & Feed Grains $1,354.3 5 Soybean Meal $710.4 6 Beef & Veal $409.7 7 Processed Grains $394.5 8 Vegetable Oils $394.1 9 Hides & Skins $377.1

10 Other Poultry Products $266.0

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Opportunity Outlook: Indiana

Indiana exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. As the #7 exporter of U.S. agricultural products, Indiana stands to gain from a change in U.S. policy toward Cuba. Indiana ranks as the 3rd largest U.S. soybean exporter, totaling more than $2 billion in 2014—35% of the state’s agricultural exports. Soybeans and soybean meal will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. Already, in 2015, 12% of Cuba’s agricultural imports were soybean products. The U.S. used to be a major supplier, but has lost market share to Argentina and Brazil. Corn, Indiana’s #2 export, presents significant export opportunity as well. Approximately 9% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share nearly 60% in 2012. However, U.S. corn exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. Changes to U.S. policy on agricultural exports to Cuba would allow Indiana exporters to recapture lost market share. Cuba’s Agricultural Imports, 2015 Indiana’s Top Agricultural Exports, 2014



Rice14%


13%

Wheat12%

Dairy Products

12%Corn9%

Soybean Meal8%

Soybean Oil4%

Feed & Fodder

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Other24%

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Indiana Rankings for Agricultural Exports:Soybeans & Meal - #3

Corn - #5Feed - #5Pork - #5

Rank Commodity Value (millions) 1 Soybeans $2,009.8 2 Corn $859.6 3 Feeds & Feed Grains $702.3 4 Soybean Meal $462.3 5 Pork $340.0 6 Vegetable Oils $256.5 7 Processed Grains $211.0 8 Other Plant Products $202.0 9 Other Poultry Products $189.7

10 Dairy Products $135.1

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Opportunity Outlook: Kansas

Kansas exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to offer credit, export and technical assistance, and market development programs. Kansas is the #2 exporter of U.S. wheat. Wheat is Kansas’s primary agricultural export, accounting for 21% of the state total in 2014 at nearly $990 million. In FY2014, of Cuba’s nearly $2 billion in agricultural imports, 13% was wheat. Prior to the U.S. embargo on Cuba, wheat was one of the top four agricultural exports from the U.S. to Cuba. The U.S. had 43% market share in FY2009 but has not shipped wheat to Cuba since FY2011. The U.S. has been supplanted by other suppliers, namely the EU and Canada. Changes to U.S. policies would allow Kansas wheat exporters to recapture lost market share. Soybeans, feed grains, and corn—Kansas’s #3, #5, and #6 exports, respectively—will be increasingly important as Cuba’s livestock sector develops in the longer term. Already, 13% of Cuba’s agricultural imports are soybean products (meal plus soybean oil), 11% corn, and 5% feed. Like with wheat, the U.S. used to be a major supplier of soybeans and corn, but has lost market share to Argentina and Brazil. Significant opportunities also exist for Kansas to export meat products to Cuba as tourism and remittance growth are expected to fuel demand. Cuba’s Agricultural Imports, FY2014 Kansas’s Top Agricultural Exports, 2014


Top U.S. Agricultural Exporters Cuban Wheat Imports: Lost U.S. Market Share


Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

Feed & Fodder

5%

Other24%

Rank Commodity Value (millions) 1 Wheat $988.8 2 Beef & Veal $787.8 3 Soybeans $556.8 4 Other oilseeds $519.9 5 Feeds & Feed Grains $432.9 6 Corn $361.1 7 Hides & Skins $260.7 8 Processed Grain $196.5 9 Pork $127.0

10 Soybean Meal $110.2

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Wheat Total Imports Wheat Imports from U.S.

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Kansas Rankings for Agricultural Exports:Wheat - #2

Beef & Veal - #3Corn - #9


Opportunity Outlook: Louisiana

Louisiana exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade. Louisiana’s top agricultural exports include soybeans and rice, accounting for nearly $500 million and $260 million, respectively, in export value in 2014. Poultry was the 4th most valuable export in 2013. All are major import products for Cuba. Soybeans, Louisiana’s top export, will be increasingly important as Cuba’s livestock sector develops in the longer term. Already, of Cuba’s nearly $2 billion in agricultural imports, 13% are soybean products (meal plus soybean oil). The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil, which could be recaptured. Cuba’s Agricultural Imports, FY2014 Louisiana’s Top Agricultural Exports, 2014


Louisiana ranks 3rd in U.S. state rice exports. Cuba has the highest per capita rice consumption of any country in the Western Hemisphere: about 177lbs per person, compared to 26lbs in the U.S. Prior to the embargo, Cuba was typically the largest market for U.S. long-grain rice exports. As recently as FY2008, Cuba was an important export market for U.S. rice, and held nearly 40% of market share in FY2004. Market share has been lost to Vietnam and Brazil, who offer credit to Cuban importers. Louisiana stands to gain even more from increased exports to Cuba on account of its port system: the Port of New Orleans is about two sailing days away from Havana’s Port of Mariel, compared with more than 30 days for the Vietnamese port of Ho Chi Minh City. Top U.S. Rice Exporters in 2014 Cuban Rice Imports: Lost U.S. Market Share

Source: USDA ERS

Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

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Rank Commodity Value (millions) 1 Soybeans $499.4 2 Other Plant Products $314.7 3 Rice $258.9 4 Other Livestock $142.1 5 Soybean Meal $114.9 6 Cotton $100.9 7 Corn $92.7 8 Feeds & Feed Grains $85.7 9 Broiler Meat $71.1

10 Vegetable Oils $63.7

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Opportunity Outlook: Minnesota

Minnesota exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. represented only 16% market share. As a top agricultural exporter, Minnesota stands to gain from a change in U.S. policy toward Cuba. Minnesota ranks 4th in the U.S. in terms of agricultural exports, with soybeans and corn accounting for nearly 40% of the state’s total export value. Minnesota’s soy exports reached more than $1.9 billion in 2014. Soybeans and soybean meal, Minnesota’s #1 and #6 top exports, respectively, will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. Already, in FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil. Corn, Minnesota’s #2 export, presents significant export opportunity. Approximately 11% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share up to 64% in FY2012. However, U.S. exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. In FY2014, U.S. corn exports to Cuba were valued at $28 million, falling to $4.9 million in FY2015. Significant opportunities also exist for Minnesota to export meat and dairy products to Cuba as tourism and remittance growth are expected to fuel demand. Cuba’s Agricultural Imports, FY2014 Minnesota’s Top Agricultural Exports, 2014



Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

Feed & Fodder

5%

Other24%

Rank Commodity Value (millions) 1 Soybeans $1,950.2 2 Corn $938.9 3 Pork $797.7 4 Feeds & Feed Grains $781.4 5 Other Plant Products $543.1 6 Soybean Meal $448.6 7 Dairy Products $321.9 8 Wheat $264.9 9 Vegetable Oils $250.6

10 Processed Grains $246.6

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Minnesota Rankings for Agricultural Exports:Pork- #2Corn - #4

Soybeans & Meal - #4Dairy- #8



Opportunity Outlook: Mississippi Mississippi exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. Mississippi is the #5 U.S. exporter of poultry, reaching over $730 million in 2014. In 2015, Cuba was the 9th largest market for U.S. poultry exports, as the U.S. exported $78 million in poultry meat to Cuba—comprising 36% of the market. This represents a significant loss in market share to Brazil, as the U.S. had held an average of 75% poultry market share in Cuba over the last decade. As a top exporter, Mississippi stands to gain from the increasing trend in Cuba’s poultry imports and recapturing the market from Brazil. Mississippi is also the #6 U.S. exporter of rice. Cuba has the highest per capita rice consumption of any country in the Western Hemisphere: about 177lbs per person, compared to 26lbs in the U.S. As recently as 2008, Cuba was an important export market for U.S. rice, but market share has been lost to Vietnam and Brazil, who offer credit to Cuban importers. Some of Mississippi’s other top exports like soybeans, soybean meal, and corn will be increasingly important for Cuba as its livestock sector develops. In 2015, 12% of Cuba’s agricultural imports were soybean products (meal plus soybean oil) and 9% corn. The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil.

Cuba’s Agricultural Imports, 2015 Mississippi’s Top Agricultural Exports, 2014




Rice14%


13%

Wheat12%

Dairy Products

12%Corn9%

Soybean Meal8%

Soybean Oil4%

Feed & Fodder

4%

Other24%

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Rank Commodity Value (millions) 1 Soybeans $733.5 2 Broiler Meat (Chicken) $356.2 3 Cotton $300.6 4 Soybean Meal $168.7 5 Corn $116.6 6 Other Livestock Products $108.1 7 Feeds & Feed Grains $102.9 8 Vegetable Oils $95.4 9 Rice $92.4

10 Wheat $62.1


Opportunity Outlook: Missouri Missouri exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. Soybeans, Missouri’s top export at over $1.5 billion in 2014—35% of the state’s agricultural exports—will be increasingly important as Cuba’s livestock sector develops in the longer term. Already, of Cuba’s nearly $2 billion in agricultural imports, 12% are soybean products (meal plus soybean oil). The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil. Missouri ranks 4th in U.S. state rice exports and 8th for corn exports. Cuba has the highest per capita rice consumption of any country in the Western Hemisphere: about 177lbs per person, compared to 26lbs in the U.S. As recently as 2008, Cuba was an important export market for U.S. rice, but market share has been lost to Vietnam and Brazil, who offer credit to Cuban importers. Corn, Missouri’s #2 export, presents significant export opportunity as well. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, but U.S. exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. Cuba’s Agricultural Imports, 2015 Missouri’s Top Agricultural Exports, 2014

Source: FAS Global Agricultural Trade System Source: USDA ERS Top U.S. Rice Exporters in 2014 Cuban Rice Imports: Lost U.S. Market Share


Rice14%


13%

Wheat12%

Dairy Products

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Soybean Meal8%

Soybean Oil4%

Feed & Fodder

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Rank Commodity Value (millions) 1 Soybeans $1,518.7 2 Corn $371.2 3 Soybean Meal $349.3 4 Feeds & Feed Grains $330.7 5 Pork $311.5 6 Vegetable Oils $193.8 7 Beef & Veal $179.8 8 Other Plant Products $158.3 9 Cotton $151.4

10 Wheat $150.5

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Opportunity Outlook: Nebraska

Nebraska exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. agricultural exports to Cuba totaled $300 million—representing only 16% market share. The U.S. share of exports fell to 10% in FY2015. As the #3 U.S. exporter of corn, Nebraska stands to gain from a change in U.S. policy toward Cuba. Nebraska’s corn exports reached more than $1.2 billion in 2014. Approximately 11% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share up to 64% in FY2012. However, U.S. exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. In FY2014, U.S. corn exports to Cuba were valued at $28 million but fell to $4.9 million in FY2015. Soybeans and soybean meal, Nebraska’s #1 and #5 top exports, respectively, will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. In FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). As with corn, the U.S. has lost soybean product market share to Brazil and Argentina, who are able to offer credit to Cuba. Cuba’s Agricultural Imports, FY2014 Nebraska’s Top Agricultural Exports, 2014




Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

Feed & Fodder

5%

Other24%

Rank Commodity Value (millions) 1 Soybeans $1,728.6 2 Corn $1,212.4 3 Beef & Veal $1,128.7 4 Feeds & Feed Grains $1,007.7 5 Soybean Meal $397.6 6 Hides & Skins $377.2 7 Processed Grains $310.5 8 Pork $260.2 9 Wheat $239.2

10 Vegetable Oils $221.3

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Nebraska Rankings for Agricultural Exports:Beef & Veal - #1

Corn - #3Feed - #3

Soybeans & Meal - #5


Opportunity Outlook: North Dakota

North Dakota exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in 2015, U.S. agricultural exports totaled $149 million, a 48% drop from 2014. The U.S. share of total exports fell to less than 9% in 2015, down from 40% in 2009. North Dakota is the #1 exporter of U.S. wheat as of 2014. Wheat is North Dakota’s primary agricultural export, accounting for 26% of the state total in 2014 at over $1.1 billion. In 2015, of Cuba’s nearly $2 billion in agricultural imports, 12% was wheat. Prior to the U.S. embargo on Cuba, wheat was a major U.S. agricultural export to Cuba. The U.S. had 43% market share in 2009 but has not shipped wheat to Cuba since 2011, having been surpassed by the EU and Canada. Changing U.S. policies would allow North Dakota exporters to recapture market share. Soybeans, feed grains, corn, and soybean meal—North Dakota’s #2, #4, #5 and #6 exports, respectively—will be increasingly important as Cuba’s livestock sector develops in the longer term. Already, 12% of Cuba’s agricultural imports are soybean products (meal plus soybean oil), 9% corn, and 4% feed. As with wheat, the U.S. used to be a major supplier of soybeans and corn, but has lost market share to Argentina and Brazil. Cuba’s Agricultural Imports, 2015 North Dakota’s Top Agricultural Exports, 2014


Top U.S. Agricultural Exporters Cuban Wheat Imports: Lost U.S. Market Share


Rice14%


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Soybean Meal8%

Soybean Oil4%

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North Dakota Rankings for Agricultural Exports:Wheat - #1

Soybeans - #9Soybean Meal - #9

Rank Commodity Value (millions) 1 Wheat $1,151.4 2 Soybeans $1,070.3 3 Other oilseeds $581.5 4 Feeds & Feed Grains $258.4 5 Corn $249.5 6 Soybean Meal $246.2 7 Vegetable Oils $175.3 8 Other Plant Products $172.4 9 Processed Grains $157.3

10 Processed Vegetables $129.0

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Opportunity Outlook: Ohio

Ohio exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. agricultural exports to Cuba totaled $300 million—representing only 16% market share. The U.S. share of total exports fell to 10% in FY2015. Ohio ranks 10th in the U.S. in terms of agricultural exports, with soybeans representing the state’s largest export product at 36%. Of Cuba’s nearly $2 billion in agricultural imports, 13% are soybean products (soybean meal plus soybean oil). Soy products will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. In FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). The U.S. has lost soybean product market share to Brazil and Argentina, who offer credit to Cuba. Ohio’s second-largest agricultural export is corn. Approximately 11% of Cuba’s agricultural imports are corn. The U.S. was Cuba’s largest corn supplier between 2002 and 2012, with U.S. market share up to 64% in FY2012. However, as with soybeans and soybean products, U.S. exports to Cuba have declined precipitously, outweighed by Argentina and Brazil. In FY2014, U.S. corn exports to Cuba were valued at $28 million but fell to $4.9 million in FY2015. Ohio exports—especially soybeans, corn, dairy, and wheat—all stand to benefit from a change in U.S. policy. Cuba’s Agricultural Imports, FY2014 Ohio’s Top Agricultural Exports, 2014



Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

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Ohio Rankings for Agricultural Exports:Soybeans & Meal - #6

Corn - #7Feed - #8

Rank Commodity Value (millions) 1 Soybeans $1,610.5 2 Corn $465.9 3 Feeds & Feed Grains $393.4 4 Soybean Meal $370.4 5 Other plant products $321.6 6 Pork $206.2 7 Vegetable Oils $205.5 8 Dairy Products $191.2 9 Wheat $146.5

10 Other poultry products $138.7

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Opportunity Outlook: Tennessee

Tennessee exports to Cuba have considerable room for growth if changes in U.S. policies open opportunities for agricultural trade with Cuba and allow U.S. exporters to extend credit, export and technical assistance, and market development programs. Of Cuba’s nearly $2 billion in agricultural imports in FY2014, U.S. agricultural exports to Cuba totaled $300 million—representing only 16% market share. The U.S. share of exports fell to 10% in FY2015. Tennessee’s top agricultural export is soybeans. Soybeans and soybean meal will be increasingly important for Cuba’s agricultural imports as its livestock sector develops in the longer term. Already, in FY2014, 13% of Cuba’s agricultural imports were soybean products (meal plus soybean oil). Tennessee’s #4 export, wheat, is a top Cuban import. The U.S. used to be a major supplier, but has lost soybean product market share to Argentina and Brazil and wheat market share to the EU and Canada. Tennessee exports to Cuba have mimicked those of the U.S. overall. Since 2009, Tennessee has not exported any bulk commodities to Cuba; current exports are predominantly frozen chicken leg quarters. In spite of the embargo, Cuba is a significant export market for U.S. poultry; in FY2015, Cuba was the 8th largest market for U.S. poultry exports. In FY2014, the U.S. exported $148 million in poultry meat to Cuba—comprising 77% of the market—but fell to 52% market share at $96 million in FY2015. Tennessee stands to gain from growth in Cuba’s poultry imports and recapturing market share. Cuba’s Agricultural Imports, FY2014 Tennessee’s Top Agricultural Exports, 2014


Cuba’s Wheat Imports: Lost Market Share Cuba’s Broiler Meat Imports

Dairy Products

14%Wheat13%

Corn11%

Rice10%

Poultry10%Soybean

Meal8%

Soybean Oil5%

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Other24%

Rank Commodity Value (millions) 1 Soybeans $468.1 2 Other Plant Products $212.3 3 Cotton $144.7 4 Wheat $137.5 5 Soybean Meal $107.7 6 Feeds & Feed Grains $93.8 7 Corn $93.6 8 Broiler Meat $74.2 9 Tobacco $73.1

10 Beef & Veal $72.4


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Opportunity Outlook: Texas

Texas exports to Cuba have considerable room for growth. Texas ranks 6th in the U.S. in terms of agricultural exports, with beef and veal representing the largest edible export product, valued at nearly $1 billion in 2014. Texas agricultural exports line up with Cuba’s imports: with the exception of soybean products, all of Cuba’s major import products are also major agricultural export products for Texas. Changes to U.S. policy regarding Cuba would open opportunities for Texas exports. Of Cuba’s nearly $2 billion in agricultural imports, 14% are dairy products, 13% wheat, 11% corn, and 10% each for rice and poultry. In spite of the embargo, Cuba is consistently a significant export market for U.S. poultry; in FY2014, Cuba was the 8th largest market for U.S. poultry exports. As of now, Texas exports mostly frozen chicken (legs and thighs) and corn to Cuba. Significant opportunities exist for Texas to export meat products as tourism and remittance growth fuel demand, in addition to feeds and feed grains as Cuba’s livestock industry is expected to grow in the longer term. With policy changes, Texas exports could recapture some of the lost market share for dairy, wheat, corn, and rice. Prior to the embargo, Cuba was typically the largest market for U.S. long-grain rice exports. Texas ranks 5th in state rice exports, totaling $92.8 million in 2014. According to the International Trade Administration, Texas exported $131,327 in goods to Cuba in 2014, down from $96.2 million in 2008. Cuba’s Agricultural Imports FY2014 Texas’s Top Agricultural Exports, 2014


Top U.S. Agricultural Exporters Cuban Rice Imports: Lost U.S. Market Share

Source: USDA ERS Source: USDA ERS

Dairy Products

14%Wheat13%

Corn11%

Rice10%

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Texas Rankings for Agricultural Exports:Rice - #5 Dairy - #6

Chicken - #6Wheat - #7

Rank Commodity Value (millions) 1 Cotton $1,375.5 2 Other Plant Products $1,157.2 3 Beef & Veal $966.9 4 Feeds & Feed Grains $368.2 5 Dairy Products $363.9 6 Hides & Skins $306.0 7 Broiler Meat $280.5 8 Wheat $268.0 9 Corn $248.4

10 Other livestock $191.3

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2016.05.12 - prospects for u.s. agribusiness in cuba - le · *updated as of may 10, 2016 2 key...

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