Cubans Want More Chicken; U.S. Farmers Want to Send It

With all of the fanfare surrounding the historic visit of President Obama to Cuba and his meeting with President Raul Castro, a group of U.S. farmers only saw one thing: a chance to export more chicken to the island state just down the pond from Miami.

U.S. Agriculture Secretary Tom Vilsack and his ag contingent are traveling with the president with ag trade on their minds. While the two heads of state are talking about easing sanctions, and political dissidents, Vilsack and his agriculture department cadre are busy as well. They’re talking with Cuban counterparts about selling more farm products.

Vilsack announced Monday some good news for the broad agriculture sector. . He said the 22 U.S. agricultural research and promotion programs and the 18 marketing order organizations that collect money from U.S. producers will be allowed to use their funds to provide information to Cuba on U.S. ag products, according to a USDA news release.

Cuba imports about 80% of its food products. And no group is more interested in the conversations than U.S. poultry producers along the Gulf Coast in the states of Georgia, Alabama, Mississippi and Arkansas. That is because Cubans have developed a healthy appetite for American chicken, despite the embargo spanning decades.

According to an article by Bloomberg News, chicken is one of Cuba’s top imports, and an exemption to the embargo for agricultural products has made the country the fifth-largest export market for U.S. poultry producers. Over the past 15 years, more than $1 billion of U.S. poultry — nearly all of it frozen legs and thighs — has been packed aboard cargo ships for the short journey to Cuba. Congress authorized agricultural trade with Cuba in 2000, along with pharmaceuticals and medical devices. But five years later the lawmakers whacked U.S. exporters with a tough condition: Cuba’s official import agency had to pay cash before delivery, not when the goods arrive. Financing from U.S. lenders was also prohibited.

That measure has hampered development of agricultural products for the Cuban market, including rice. Some congressmen are trying to modify the restrictions so that more grains and other meat products can be exported to Cuba with fewer hindrances.

The export-finance rules have effectively ended U.S. exports of rice and wheat to Cuba, and U.S. corn sales to the island have likewise plunged. Despite the restrictions of U.S. law, chicken exports to Cuba have remained strong. Cuba’s import agency considers the quality of U.S. broilers superior to those from Brazil and other Latin American sources..

Most of the U.S. chicken quarters — the most affordable protein available to Cuban consumers — end up in a variety of state-run and private food shops. The communist nation can also expect to eventually discover the culinary joys of highly processed — and higher margin — chicken products such as “nuggets” and wings.

Cash Cattle

Cash cattle trade was mostly inactive on light demand in all feeding regions Monday. The latest established market in any feeding region was last week with the bulk of live sales in the Southern Plains and Nebraska at $139.00, according to the USDA. Dressed sales in Nebraska sold at $223.00 with a few up to $225.00. In Colorado last week, live sales sold from $139.50 to $140.00. In the Western Corn Belt for the previous week, live sales sold from $139.00 to $140.00 with a few up to $141.00. Dressed sales sold from $222.00 to $223.00 with a few up to $226.00.

Friday’s Cattle on Feed report from the USDA was seen bearish by many as placements for February were up 10%, above expectations. That report was still being digested Monday in both the cash and futures markets. Live cattle futures closed 80 cents to $1.475 lower on Monday, pressured by a moderately bearish Cattle on Feed from Friday. Feeder futures extended its sharp losses incurred on Friday with losses of $2.25 to $4.225 today. The CME Feeder Cattle Index for the seven days ending Friday, 3/18, was up $1.21 to $163.45. Mar 16 Feeder Cattle settled at $162.375, declining by $0.850.

Boxed Beef Cut-Out Values

Boxed beef cutout values were sharply lower on choice and lower on select on light to moderate demand and offerings. Select and choice rib, chuck and round cuts were steady to weak. Choice loin cuts were lower while select was steady. Beef trimmings were mostly moderately lower on light demand and moderate offerings. Choice was $220.80. down $2.01 while select was $220.67, down $1.66. Prices had run up last week as short packers pushed up demand. The spread was $9.13 and there were 111 loads sold into the spot market.