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  • Agricultural interests remain optimistic about export potential to Cuba following last week’s announcement that the U.S. and Cuba are restoring diplomatic relations at the end of this month.Yet, opening an embassy in Havana is barely a first step.Last spring the Senate Agriculture Committee held a hearing on potential trade to Cuba that included both hopeful and sobering testimony from experts, including C.Parr Rosson, III, the head of the agricultural economics department at Texas A&M University and an authority on international trade and Cuba.In April, Rosson told the committee that Cuba, which is the largest island in the Caribbean with 11 million people, has potential to be a big U.S. market.“Our previous research indicates that U.S. export potential could exceed the record $709 million set in 2008,” Rosson said. “With a more open economy, less regulation by both governments, strong tourism and remittances, U.S. food and agricultural exports have the potential to exceed $1.2 billion annually within five years…”In the short run, a large share of potential food exports would likely go to Cuba's tourism business, he said. Cubans have little disposable income, with salaries averaging about $20 per month. The United States has lost market share in recent years, selling only $286 million in agricultural exports to the Cuban government in 2014.“There are several reasons for this sharp decline in U.S. exports,” Rosson said. “First, Cuba has diversified its food suppliers by shifting away from U.S. products in favor of those from Brazil, Canada, Argentina, Mexico, Spain, France, Ukraine, and Vietnam. Credit terms are offered by some of these countries, allowing ALIMPORT [Cuba’s importing agency] to conserve hard currency and use credit to make larger purchases over periods of several months or longer. Sustained high prices for many agricultural commodities and a strong U.S. dollar also negatively impacted U.S. exports over the last several years. Lower earnings from tourism, and nickel exports also hampered the GOC from continuing large cash expenditures on imported food. Perhaps another reason may have been the deliberate decision by the [Cuban government] to move away from the United States as a food supplier. After a decade of trying to influence U.S. policy and failing, persistence may have waned.”Congress is trying to make up for lost time, with several bills introduced that would at least partially end the U.S. trade embargo with Cuba, which remains in place in spite of improving ties between the two governments.The U.S. Grains Council sees potential to export more feed grains to an island with relatively small livestock numbers at the present time.According to Melissa George Kessler, communications director the the Council, these are the official statistics published by the Cuban government as of last year:Cattle - 4 million headSwine – 1.6 million sows / 5.2 million farrowingsPoultry – 32.5 million total14 million Layers – all government owned18.5 million Broilers – nongovernment ownedThose cattle numbers are comparable to the number in Iowa or Missouri in the U.S. “Bottom line is that there's room to grow and we're hopeful we can both help with that and sell U.S. grains in the process,” Kessler told Agriculture.com in an email message. 

  • The World Food Prize named Sir Fazle Hasan Abed of Bangladesh its 2015 laureate for his role in developing the largest non-governmental organization to tackle food insecurity and poverty around the world.  The World Food Prize recognizes individuals who have improved the quality, quantity or availability of food in the world, and calls attention to what has been done and can be done to improve global food security.  Sir Fazle, the 2015 World Food Prize Laureate, has been described as a “strategic thinker, and a man with a future vision” by Dr. M.S. Swaminathanthe, the chairman of the World Food Prize Selection Committee and the first World Food Prize Laureate in 1987. Sir Fazle, who was also knighted by the British Crown in 2009, has lead BRAC for more than 40 years, addressing the link between hunger and poverty with a concentration on scientific innovation and local participation. BRAC (formerly known as Bangladesh Rural Advancement Committee) was founded by Sir Fazle in 1972, and has since helped lift more than 150 million people out of poverty with advancements in the poultry, seed, and dairy industries in Bangladesh. BRAC has spread its approach to 10 other developing countries, including Uganda, Tanzania, Sierra Leone, South Sudan, Liberia, Haiti, Afghanistan, Pakistan, Sri Lanka, and the Philippines. Sir Fazle's developmental programs have focused on ways to help increase crop yields, livestock production, and research and development on new seed varieties, while keeping sustainability, adaptability, climate change, the environment and affordability in mind. As a result, more than 500,000 farmers have access to efficient farming practices, technologies, and financial support services to help manage and control their livelihood. Empowering women through microcredit programs, small loans, education, and healthcare has also been a primary focal point to give women the tools they need to be an agency in their village and help unite their community. BRAC recently made a pledge to reach 2.7 million additional girls through schooling, teacher training, empowerment programs, and scholarships. BRAC has more than 110,000 employees around the world, with an additional 150,000 BRAC-trained entrepreneurs that provide affordable goods and services, such as seed, medicine and training, to their rural neighbors.Photograph: The World Food Prize 

  • July is here to bring us sunshine, county fairs, and carnivals. But some farmers are still in the fields working on planting or harvest they usually would have had done weeks ago.{[SINGE PLAYER VIDEO]} But June brought on record precipitation – two to three times the normal amount in some areas – which hasn’t paired well with a lack of dry days to provide some relief. That may be changing soon.Looking at the one- to five-day outlook, many areas of the Midwest will get some additional dry time through the July 4th weekend, says Dan Hicks, meteorologist with Freese-Notis Weather. “This may allow some drying across the wet areas of the Midwest, reducing some of the flooding problems and slowing drying some of the fields,” explains Hicks. “This may allow some increase in fieldwork in a few areas as far as completion of soybean planting and possibly a little bit of winter wheat harvest.”The six- to ten-day forecast isn’t giving hope for much of an open window as rains across the Midwest will bump back up to normal or above normal rainfall. Expect below average temperatures in that time as well.For a full July weather outlook, be sure to watch Hicks’ video.

  • This Monday, the history of corn and soybean markets will change. After being traded on the floor of the Chicago Board of Trade for 124 years, the yelling and screaming to buy and sell ag commodities futures contracts will go silent as the Exchange switches to all electronic trading. The agricultural options contracts will remain traded on the floor, with a physical location change within the CME Group Exchange building scheduled for September, according to CME officials.Open outcry volume has decreased by 75% since 2008. This year, open outcry futures contracts now make up only 1% of the company’s business. The S&P 500 Standard Futures pit, which continues to provide an important venue for trading the underlying futures contract for the S&P 500 options on futures contract, will remain open, as will all options pits in both locations except for the DJIA ($10) and NASDAQ 100 options, according to the CME Group press release.In addition, in Chicago, all options pits will be located on a single floor in the company’s Financial Room by September.A QUICK HISTORYThe Chicago Board of Trade Exchange opened in 1848. Corn, wheat, and oats open outcry futures started trading in 1877. Soybean open outcry futures opened in 1936.Though it’s not a swift change for traders and customers, the 12-decade tradition of farm markets is creating a nostalgic reflection from some floor traders.Matt Pierce, Futures International LLC floor trader at the CME Group Exchange, says though it won’t change his job dramatically, he respects the history of the industry.“This has been a long-time coming. Though depressing to see an era end, it's time,” Pierce says. Scott Shellady, TJM Investments senior vice president and CME Group floor trader, says that it’s important to understand the reality of the floor closing.“The real story here is that while we don't need stocks and bonds to live, we do need food. And, by going all electronic, we have basically turned over sustenance to the cloud with the algorithmic traders and high-frequency programmers. Electronic trading and technology may still be in its infancy, and arguably we are in the Wild, Wild West. I think that is the danger and the real underlying story,” Shellady says. CLOSURE IMPACTWhile the media want to make a big deal of the closing of the pits that started the CBOT, it’s important to note that wheat, soybeans, and corn will still be traded, just electronically, Shellady says. “It is like a furniture store no longer making furniture by hand and using machines. Yes, there are some displaced workers, but 95% of them have left already,” Shellady says.Pierce sees the impact of the futures pit closing as minimal. “I’m almost all options so the close doesn't affect me. From the brokerage side, it's a minimal change at best. Old-school guys will be forced to retire or find a new career. If you had any foresight and moved to options, you are OK. I will just move to the new room and expand my coverage for clients into hogs, cattle, and other CME products,” Pierce says. It is important for the public to know that the decision to go electronic is a customer-based one – not an exchange one, the traders say. “The floor population has obviously dwindled, but there is no way to tell how many new electronic customers have taken their place somewhere in cyberspace,” Shellady says.  Shellady adds, “While I have seen an exchange convert to all electronic (I was in London on the LIFFE when it went all electronic in 1997 – 18 years ago), I am not afraid of the change, nor will it alter my daily routine too much. We are moving the open outcry options pits into the financial room over the next few months. That is the change – for the time being.”

 

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