In its recent “Overview of Cuban Imports of Goods and Services and Effects of U.S. Restrictions,” the U.S. International Trade Commission outlined an optimistic future for U.S. dairy companies looking to establish trade relationships with Cuba. Basing its outlook on the United States’ proximity to Cuba, access to high-quality animal feed, leadership in bovine genetics and reliable transportation sector, the Commission encouraged American dairy companies to move to capitalize on this opportunity when U.S. restrictions are removed and dairy exports to Cuba are allowed to resume.
Although Cuban dairy producers enjoy favorable government privileges, including preferential input purchasing and the state’s control over distribution of imports, the Commission estimates that their production levels will not satisfy domestic demand. Instead, the Cuban government likely will look to import milk powder and evaporated and condensed milk to support the market.
This gap represents a prime opportunity for American processors to expand into a market that grossed over $220,000,000 in milk powder imports in 2014, without a dime of it coming from U.S. products. According to the report, Cuban sources have said they would prefer to obtain more of their milk powders from the United States over other exporters because U.S. prices would be lower.
The report also states that the reciprocal opening of markets “could indirectly prompt Cuban imports of higher-value dairy products over time” with higher demand for cheese, yogurt and milk due to increased tourism in the country. Citing numbers from the U.S. Dairy Export Council, the report said U.S. exporters could capture market share of 30 percent for total dairy products, with dominance in milk powder and whey estimated at 50 percent to 75 percent and butter and cheese estimated at 40 percent to 60 percent over the next ten years, if trends continue.
IDFA continues to support the lowering of trade barriers between the United States and Cuba and eagerly awaits the opportunity for the U.S. companies to fulfill Cuban consumers’ demand for healthy and affordable dairy products.
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