US Is $500 Million Supermarket to Cuba
Published: Thursday, 27 May 2010 | 10:00 AM ET
By: Rob Reuteman
Special to CNBC.com
AP
The U.S. businesses that sold $528 million in food products to Cuba last
year range from small dairy farmers to multi- billion dollar
agribusiness corporations.
But they seem to have one thing in common: they admit to mixing a little
social messaging in with their sales.
Take the case of Ralph Kaehler, a St. Charles, Minn., cattleman who
shipped the first livestock to Cuba after the U.S. lifted its 52-year
trade embargo to allow sales of food products and medical supplies in 2000.
In 2002, news photos of Kaehler's two sons were published around the
world as they showed Fidel Castro one of their bulls, named Minnesota
Red. (See one of the images below.)
"I'd rather have my boys someday go down there and negotiate a cattle
contract than be members of a peacekeeping mission," Kaehler said.
"We've never gone to war with a trading partner."
Kaehler is outspoken on the subject of doing business with Cuba, in
sharp contrast to the rare and carefully chosen statements on the
subject from agribusiness giants like Cargill or Archer Daniels Midland.
The Cuban trade embargo remains a hotly-debated topic of the sort most
U.S. companies shy away from. You either believe that economic sanctions
should remain in effect until the Cuban dictatorship switches to
democracy or you believe that the quickest way to undermine the Cuban
government would be to flood the island with U.S. goods and citizens.
Profit hasn't been foremost on Kaehler's list of motives.
"Like my banker says, for the amount of money we've gone through in
trading with Cuba, we sure haven't kept much," he said. "We're doing it
as much for correcting policy we think is wrong as anything else. And as
farmers, we have to promote agriculture whenever we can."
Archer Daniels Midland
Seth Perlman / AP
Decatur, Ill.-based Archer Daniels Midland, with 2009 revenues of nearly
$70 billion, was the first U.S. company to sign a contract with Cuba
after the Trade Sanctions Reform and Export Enhancement Act of 2000
lifted part of the trade embargo.
By some estimates, ADM now accounts for nearly half of all U.S. food
exports to Cuba. But the company doesn't publicize its Cuban trade.
Asked last week about ADM's trade with Cuba, media relations manager
Roman Blahoski responded, "We generally do not discuss market
conditions. We do not break down revenue by country or region, only by
business unit—corn processing, etc.,—so we wouldn't have any revenue
information specific to Cuba to provide."
But last year, Tony DeLio, a former vice-president of marketing and
public relations at ADM, was quoted by the Minneapolis Star-Tribune: "We
are always concerned when there is a lack of freedom. But as a company,
our ability to affect that, and where we can help bring about change, is
through trade."
Cargill Inc., one of the world's largest privately owned corporations,
also has been doing business with Cuba for 10 years. Since it's
privately held, Cargill is not required to file public reports on its
financial profile, but its annual sales are estimated at well over $55
billion.
Asked this week about its trade with Cuba, media relations director
David Feider responded by e-mail: "I can confirm that Cargill has sold
U.S. agricultural commodities now for a number of years—corn, dried
distillers' grains, wheat—licensed by the U.S. government under the
Trade Sanctions Reform & Export Enhancement Act of 2000 into Cuba."
"This activity is consistent with our longstanding belief that that food
is a basic right, and access to it should not be manipulated by
governments for political purposes," Feider added.
Florida International University, which annually polls Cuban-American
sentiment, identified a tipping point in 2008. For the first time less
than half of respondents, 45 percent, supported the continuing U.S.
economic embargo. Their 2004 poll showed that 66 percent wanted the
embargo to continue.
"The embargo is about the Cuban exiles who backed Batista," Kaehler
said. "It's all about old money and old power. Over 70 percent of Cuban
Americans weren't alive when the embargo was put in place. All families
in Cuba have relatives in the U.S. Just like Mexican families, they all
have someone up here making money and sending it home. Even with the
embargo and all its impeding circumstances, we're still one of Cuba's
top four trading partners."
The U.S. food products now making their way to Cuba include corn from
Iowa, cattle from Florida, millions of dozens of eggs from
Massachusetts, rice from Texas and apples from Washington state.
American coffee, shellfish, bread, wine, cigarettes and pistachios also
are exported.
More than 30 states have sent trade missions to Cuba in the past 10
years, eager to do business with an island country of 11.4 million
people that has to import 70 percent of its food.
"The more you learn about the embargo, the crazier it gets that we're
continuing it," Kaehler said. "The logic of it defies a normal mind.""
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