So,  How do I Export?  And, do I want to?

The topics  How do I decide to export, and what do I need  A real opportunity - Cuba

Michigan Bean Commission  Bob Green-Executive Director  9 Years as Executive Director  25 years trading

The Michigan Bean Commission  100% grower funded  Currently about 250,000 acres  About $100 Million per year  Number 1 in production of Black Beans Small Red Beans Cranberry Beans  Export every other row

More on Beans  Grow 12 to 16 classes yearly  Health Aspects High in anti-oxidants Have a DGM Food Pyramid

Why the Export Market?  Higher price?  Domestic Market flooded?  Larger piece of the pie?  More margin?  Too much production?  Time Gap fill in?  Excitement?

Do I have the Capabilities?  Computer/ /web  Financing  Production Time  Quality

What do I need to export?  MARKETS!

Where are the markets?  FAS Web site is the first stop

Now What?  You have the countries, how can you find the customers? FAS can help you find the customers List of importers Status of current imports and origination Define your competitors

Trade Shows  Jamie will address  Buyers stopping by, Looking for you!  Not wandering around “in country”  Passport/language

Find the right buyers  Meet and Greet Best alternative for any business deal  Understand buyers needs and problems  Understand their definition of quality  Quality Control Meet the people/set up rapport Contact information – a must  Make the offer Small aggressive offers

Payment! The Ultimate Goal!  Open Invoice Just what it implies Lots of horror stories! Know your market Take time for buyer to qualify  Some Countries/Regions never qualify Not an immediate way to do business

CAD – Cash Against Documents  Bank Charges Apply – yours and theirs  Theory is no cash, no documents, no containers Banks in some countries seem to not know the procedures. Is it a bank or someone’s garage?  Doc’s not picked up? Still have bank charges Other charges as well-demurrage and so on. Plus you still have product in wrong place

Letter of Credit  Certainly considered the safest  Cost To open To amend To collect  Descriptions Exact wording Grade certificate/quality certificate (stamp) Safety (Good and Bad News)

Payment in Advance  Best option Hardest to negotiate  Partial payment with balance CAD Incentive for buyer to finalize

Basis of Sale?  INCO Terms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities, and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale.  International Chamber of Commerce

FOB  FOB (Free On Board) - The seller has fulfilled his obligation to deliver when goods have passed over the ship’s rail at the named port of shipment. All costs and risks of loss or damage pass to the buyer from that named point.

CFR/C&F/CIF  CFR/CIF (Cost & Freight / Cost Insurance Freight) - This term means in addition to deliver goods onto the vessel, the seller must pay the costs and freight necessary to bring the goods to the nominated port of destination. CIF term – adds the element of insurance where the seller is responsible for above and for obtaining and paying for marine insurance against buyers risk of loss or damage to the goods during carriage.

FAS  FAS (Free Alongside Ship) - (port, after all origin port charges) Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

Other things to consider  Shipping time/loading time Booking/receiving containers/truck time to port/ocean time/port time/truck time to plant  Freight Freight Forwarders  Importing Government regulations Duty/phytosanitary Requirements/NAFTA/CAFTA/  Ocean Marine Insurance General Average

But, What if there is a problem?  Quality: Submit samples prior to shipment Retain Samples Use the knowledge you obtained on your visit  Freight Delayed Shipment – keep customer informed Advice of Shipment

REJECTION – Negotiate!  To Expensive to bring home  Re-sell Hard to accomplish How big the discount  Re-clean Expensive  Create a plan Plant notes (mud balls) Ask for buyers permission to call QC Buyers don’t like problems

Two rules for Exporting  Be Cautious  Do your homework

Questions  "You can tell whether a person is clever by his answers. You can tell whether a person is wise by his questions."

Cuba – An opportunity?