Mexico Suspends Purchases From 30 Meat Plants

Sunday, December 28, 2008

Mexico suspends meat imports from plants in 14 states after raising objections to USDA

Mexico suspended meat imports from 30 processing plants in 14 states, including some of the nation's largest, on Wednesday and Friday, according to a list posted on the U.S. Department of Agriculture Web site.
The action pushed down beef and pork futures in trading on the Chicago Mercantile Exchange Friday.
Among the plants listed on the site are the Smithfield Packing Inc. plant in Tar Heel, N.C., the world's largest pork slaughterhouse.

Another Smithfield plant in Plant City, Fla., that processes pork, beef and poultry is on the list, along with three plants operated by subsidiary John Morrell & Co., two in South Dakota and one in Iowa, a Nebraska pork run by subsidiary Farmland Foods Inc. and a Pennsylvania beef plant run by its Moyer Packing Co. unit.
Six operations run by Tyson Foods Inc. in Iowa, Texas and Nebraska are also on the list.
Other affected plants are run by food giants Cargill Inc. and Swift Foods Inc., along with Seaboard Corp. and 11 small private companies in Illinois, Indiana, Kansas, Kentucky, Missouri, Oklahoma and Utah.

USDA spokeswoman Amanda Eamich said in an e-mail that Mexico had discussions over the course of the last five business days with the agency regarding concerns about the general condition of meat products, sanitation issues and "possible pathogen findings."
"Occasional differences in shipments in trade relationships do occur and allow for the option of notifying specific plants of suspension of those shipments," she said.

Published reports, however, raised the possiblity the move could reflect Mexico's objection to a recently-enacted law that requires meat products to bear country-of-origin labels.
ConAgra Foods Inc., which formerly owned Butterball-brand turkey, sold the company in 2006 and is not affected, according to Stephanie Childs, a spokeswoman for the Omaha, Neb., company. ConAgra is incorrectly named on the USDA Web site as one of the plant operators.

Tyson spokesman Archie Schaffer III said the company had no prior warning from Mexico about the ban and only learned of it when shipments were turned aside at the border Wednesday. The ban could greatly affect the Springdale, Ark.-based company, as high feed prices have already strained its profits. Mexico represents 23 percent of its $3.8 billion of international sales in 2008, according to company statistics.
"No information or explanation was given," Schaffer said. "We're going to be working beginning Monday" to restore trade.

Attempts to reach representatives at Smithfield and Swift were unsuccessful.
According to published reports, the suspensions may be in retaliation for the U.S. putting a country-of-origin labeling law into effect on Oct. 1 in response to concerns about the safety of imports.

On Dec. 18, Mexico joined Canada in opposing the law, which involves fresh beef and pork, in a complaint to the World Trade Organization. Canada's government filed its complaint Dec. 1, saying it was concerned the U.S. rules were discriminating against Canadian agricultural exporters.
The complaints generate a 60-day consultation period between the governments, after which the WTO can step in with an investigative panel.

The country-of-origin labeling law mandates the separation of foreign cattle and pigs in U.S. feedlots and packing plants. Foreign animals are also required to have more documentation about where they come from and, in the case of cattle, must have tags that indicate they are free of mad cow disease.
Canadian farm groups say a growing number of meat plants in the U.S. are refusing to accept Canadian cattle and hogs for processing since the law went into effect.
In light trading Friday, Smithfield shares gained 91 cents, or 7.5 percent, to close at $12.98. Tyson shares added 13 cents to $8.20.

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