U.S. broiler exports to Cuba
Value in millions of dollars
2001 ……………….. 2.0
2002 ………………. 22.5
2003 ……………….. 35.5
2004 ………………… 59.0
2005 ………………….56.5
2006 ………………….44.0
2007 ……………………76.4
2008 ……………………137.2
2009 ……………………140.7
2010 ………………….. 105.7
2011 …………………….96.6
2012 ……………………..157.4
2013 …………………….. 145.8
Through Oct 2014 ……. 127.7
Source: USA Poultry and Egg Export Council
The normalization of relations with Cuba is great news for Georgia agriculture – mainly companies that produce poultry and eggs.
Agricultural exports to Cuba are already permitted, but the announcement of freer trade likely means a loosening of rules for how business is done and that will grease the skids for the industry, said James Sumner, president of the USA Poultry and Egg Export Council.
About $150 million worth of American poultry are shipped to Cuba each year and there is potential for much more, said Sumner. “One of the first times that I met Fidel (former Cuban president Castro), he told me that they could import chicken from the United States more economically than they could produce it themselves.”
The Stone Mountain-based council represents 98 percent of poultry and egg industries in the United States.
And while American companies have been permitted to export agricultural products since the end of the Clinton administration in 2001, the rules for doing the transactions have slowed the pace at which the trade can be done.
For example, the Cubans have been required to pay in advance. Moreover, none of the deals can involve direct business between American and Cuban banks.
“That makes the process much more cumbersome,” Sumner said.
Even so, U.S. poultry exports to Cuba grew from zero to a peak of more than 140,000 metric tons in 2012, before slipping.
“The purchases have declined since then because Cuba doesn’t have cash,” said Angelo Fuster, an Atlanta-based consultant and a Cuba native. “If they change the rules so there is the possibility of selling on credit, that would be a huge improvement for American business.”
“The potential is significant.”
A number of American companies have eyed the Cuban market with interest.
Among the most-often cited opportunities are:
— Hospitality, already a big business in Cuba. But there would be a need for more hotels, restaurants and resorts to serve hundreds of thousands of expected U.S. visitors.
— Construction equipment, to help Cuba redevelop.
“I can see Home Depot taking advantage of that,” Fuster said. “Home Depot’s equipment would be very good for small businesses.”
A spokeswoman for Atlanta-based Home Depot declined to comment.
But agriculture has a head start and poultry accounts for nearly half of Georgia’s nearly $9 billion-a-year agricultural business, according to the United States Department of Agriculture.
Georgia is the nation’s largest poultry producer, accounting for about 138,000 jobs, according to the Georgia Poultry Federation. Poultry accounts for nearly half of the state’s agricultural business.
But the hope for exports is not just to increase volume, but also to ship different cuts of poultry, Sumner said.
Typically, Cubans have tended to buy the cheaper cuts, but American companies are counting on their economy to be increasingly liberalized and privatized, he said. “We hope that as the Cuban economy improves, they’ll be able to buy higher-value products.”
Americans and Georgians also have an advantage in marketing to Cuba: Poultry can be shipped from the United States to Cuba much more quickly than from Europe or South America – and poultry from the Southeast gets there the quickest.
Most of the poultry and egg products produced in the United States are sold and consumed here. Only 21 percent of U.S. produced chicken is exported, 14 percent of turkey and 5 percent of the eggs, Sumner said.
Those exports still account for $5.6 billion worth of products annually and Cuba is the fifth-largest destination for that trade, he said.
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