Ethanol Blog

With diplomatic relations between the U.S. and Cuba restored as of July 20, Cuba could be a growing market for U.S. corn and dried distillers grains with solubles, according to an article by Agriculture.com (http://bit.ly/…).

The U.S. has sold corn to Cuba each market year since the early 2000s and DDGS since 2005. The U.S. share of the Cuban corn market has varied during that time between 100% in 2007/08 and 15% in recent years. The National Corn Growers Association estimates that with restored and open trade, the potential market in Cuba could total 35.4 million bushels of corn and 150,000 tons of distillers grains. Cuba has the potential to become the 12th largest export market for U.S. corn.

The only obstacles in recapturing that market are a number of U.S. policies learned from a recent trip to Cuba by leaders of the NCGA, the U.S. Grains Council and the North Dakota Barley Council. One of those obstacles is an embargo that gives competitors like Brazil opportunities to dominate the market.

As the country's economy improves, Cuba's goal of improving its agricultural sector could likely result in increased demand for meat products, which would increase demand for corn and DDGS. In fact, last week Cuba already reported a 5.7% increase in livestock production in the first quarter of 2015 compared to last year.

Easing trade restriction such as lifting restrictions on travel and capital flow and allowing USDA to conduct market development and credit guarantee programs, could help the U.S. regain its market share in Cuba and increase new opportunities for U.S. ag exports.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com

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