Va. Apple Grower Finds Core Business in Cuba
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WINCHESTER, Va. — Improving trade relations with Cuba over the past decade has helped boost revenue for Virginia farmers and other agricultural-based enterprises, including a local apple company.
Phil Glaize, whose family has been in the apple business for more than 70 years, began working with the state government and ALIMPORT — Cuba’s food import agency — to export apples from Frederick and Shenandoah counties to the Caribbean country about six years ago.
The number of apples Glaize exports to Cuba has been up and down over the years, he said, but the company sent about 7,000 cases — approximately 875,000 apples — to the country in 2012.
The price Glaize gets for his fruit in Cuba is better than what he would get from an apple processing plant, but lower than at a U.S. grocery store.
He estimated that apple exporters in Virginia sent about $1 million in apple products to Cuba this year.
“It’s revenue from apples that we would have limited sale for otherwise,” Glaize said. “If 7,000 cases went to Cuba, I might have been able to only sell 3,000 of them through other channels.”
The apples Glaize sends to Cuba have some defects — the primary one being russeting that gives the skin a brownish discoloration — but the taste and quality of the fruit is unaffected, he said.
“We couldn’t sell (an apple with extensive russeting) in this country, so it’s nice that we have that outlet,” Glaize said. “(Cuba) gets a lower grade for a lower price, and the only difference is (these apples aren’t) as cosmetically appealing.”
Virginia’s agricultural exports to Cuba have increased from $838,000 in 2003 — when they resumed after parts of the 1961 trade embargo were relaxed — to nearly $65 million in 2011, according to Todd Haymore, Virginia’s secretary of Agriculture and Forestry.
“With agricultural exports for the first nine months of 2012 valued at $53 million, Cuba is a consistently valuable market for Virginia’s agricultural products,” Haymore wrote in an email.
Though the trade embargo has loosened, there are still obstacles for agricultural businesses that want to export to Cuba.
According to Haymore, there are restrictions on export financing terms — exporters must rely on a third-party financial institution, usually a bank in Canada or France, to act as an intermediary to receive payment to a U.S. bank — and agricultural goods require a U.S. Commerce Export License to be sold and shipped to Cuba.
The process of obtaining a license can be time consuming and create a barrier for trade, Haymore wrote.
Glaize has also experienced difficulties in exporting to Cuba.
“The government, with (Cuba) being a communist country that has an embargo, you have to jump through a lot of hoops to get our product in there,” he said. “We’re exporting our apples legally because (Cuba) can take food products and health-oriented products.”
Haymore described Cuba as an important market for Virginia soybeans and apples and noted that the state has periodic exports of poultry and pork meat to the country. He added that Virginia ranks in the top three of states exporting to Cuba.
“Over the last five years, Virginia Department of Agriculture and Consumer Services marketing and development staff and I have worked in a strategic manner with Virginia exporters and Cuban officials in Havana and Washington, D.C., to build on the relationship that benefits both our producers and the Cuban people,” Haymore wrote. “This relationship has helped a number of Virginia exporters, such as Glaize Apples, build a solid business base in Cuba over the past decade and will serve as a platform for continued growth into the future.”
Glaize said he sees the benefits the trade arrangement has on his business and for his employees on a regular basis.
“One thing it does is it allows us to keep these 50 people working more days than we would if we didn’t have the market,” he said. “For every apple we can put into a cardboard box, we’re providing wages to all these people, we’re providing wages to the people that make the cardboard boxes, and if we don’t sell (apples) to Cuba, then they don’t go into the boxes … it’s a real trickle-down deal.”
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