Kansas City Star: Cuban trade and Kansas wheat: What will Trump say?

Kansas City Star

http://www.kansascity.com/news/politics-government/article156459864.html?mc_cid=14d02b35d7&mc_eid=4a5749a5b4

 

Jay Armstrong stepped out of his pickup into a swishing wheat field Thursday to check if the grain was dry enough to harvest.

He bit into a few kernels: “Yep, looks like I’ll be out here next week.” 

Now, if any of those kernels could find their way to the Cuban shore, Kansas wheat growers would finally begin to see last year’s bounty emptying out of storage — and probably at much higher prices than now, said Armstrong.

“The important thing to know is that Cuba grows no wheat at all,” the Muscotah, Kan., farmer said. “You don’t grow wheat in the tropics. Too many diseases.”

President Donald Trump on Friday is scheduled to announce aspects of his U.S.-Cuba policy in a speech in Miami. Many farmers in flyover country who overwhelmingly backed candidate Trump are hoping that he’ll soften his campaign rhetoric against normalizing relations with the communist island.

U.S. food producers, and especially wheat growers, badly want trade embargoes lifted on the Cuban market.

The Miami Herald reported Thursday that Trump would be rolling back parts of the Obama administration’s efforts to thaw relations, which mostly dealt with opening up travel to and from Cuba. People familiar with the White House discussions have said the president may impose new limitations on commerce, but presidential spokeswoman Sarah Huckabee Sanders offered no details Thursday.

Back in his pickup, Armstrong said Trump has been hard to predict. 

For farmers who voted for him, including Armstrong, to have chosen Democrat Hillary Clinton instead “was a nonstarter ... never going to happen,” he said. Many of them think that Trump’s tough talk about undoing trade deals that policy analysts say favor U.S. agriculture was just that — tough talk.

“I think he’s just negotiating the way he’s done all his business life,” said Armstrong, the fourth generation of his family to farm Atchison County. “When I talk to farmers around here, there’s concern (about what Trump will say Friday). But I ask them, whenever you go out to buy a tractor or piece of land, whenever do you give the asking price off the bat?

“That’s negotiating.”

Because the hard, red winter wheat that made Kansas a Western Hemisphere breadbasket doesn’t grow in Cuba, Cubans import most of their grain on credit from France and Canada. For U.S. wheat, Cuba must pay cash up front, which is why less than 10 percent of its total grain imports last year came from the United States.

Trump cannot lift trade embargoes by executive order. Accessing Cuban markets would require action from Congress.

In March, U.S. Sen. Jerry Moran, a Kansas Republican, introduced such a bill to the displeasure of many GOP colleagues long opposed to normalized relations. Moran said Cubans could buy American grain for about one-fourth the price they pay to receive shipments from Europe. But they lack the cash needed to import U.S. products. 

Farm interests in both Kansas and Missouri have formed Engage Cuba councils to push for opening up trade after more than a half-century of frozen relations.

The Missouri Pork Association is among the Missouri groups in the coalition, but association executive vice president Don Nikodim said Thursday it’s too early to know the Cuban market for pork.

“They raise some; we don’t know a lot of details,” Nikodim said. “We’ll explore every opportunity for world markets if it makes sense.”

Besides agriculture, the fortunes of other regional industries could hinge on Trump’s announcement.

Chris Gutierrez, president of KC SmartPort, said area transportation and freight firms may benefit by shipping products in bulk to Cuba — just 90 miles off the Florida coast — then having some of those products shipped from Cuba farther out to Central or South American markets.

“Cuba’s the closest to us, so there are cost benefits,” Gutierrez said.

Muscotah, Kan., grower Armstrong is hopeful that Trump will recognize the “America First” opportunities for the rural voters who helped put him in office. Recently, Trump walked back some of his campaign condemnations of the North American Free Trade Agreement, reportedly after Agriculture Secretary Sonny Perdue pointed out NAFTA’s benefits to farmers.

To Armstrong, good business trumps rival politics. His father, John Junior Armstrong, was a Kansas Farm Bureau leader who blazed trails in introducing Midwestern wheat to Soviet Union ports in the early 1970s. Last fall, Jay Armstrong welcomed to his farm three representatives of Cuba’s milling trade, who toured Kansas at the invitation of the state wheat commission.

“Trade is the salve for getting enemies to be friends,” Jay Armstrong said. “You have sectors of both economies that suddenly need each other. You have leaders who need to get along.”