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Mexico Lifts Ban on Some US Meat Plants

by 5m Editor
31 December 2008, at 9:47a.m.

GLOBAL - Mexico has lifted import restrictions on 20 of about 31 US meat plants, reversing bans imposed last week.

Bloomberg has reported the statement from the US Department of Agriculture. Plants owned by Smithfield Foods Inc., the world's largest hog producer, and Tyson Foods Inc., the biggest US meat company, were among those recertified, the USDA's Food Safety and Inspection Service said on 30 December. Bans were also lifted on facilities owned by Cargill Inc. and JBS SA, the world's biggest beef producer.

Mexico's ban had a 'very significant' impact on the hog market because the suspended plants 'represented probably over 50 percent of total US pork production,' said Dennis Smith, a senior account executive at Archer Financial Services Inc. in Chicago.

Hog futures for February settlement rose 0.575 cent, or 1 percent, to 59.725 cents a pound on the Chicago Mercantile Exchange. The most-active contract plunged 3.1 percent to a six-week low on Dec. 26, when the USDA announced the Mexican import ban. Wholesale pork sank 0.5 percent today to 54.49 cents a pound, the lowest price since April 2003.

Concerns over Quality and Technical Aspects

Mexico suspended imports from the plants on 23 December, the Bloomberg report continues, because of quality and technical concerns, the USDA said. Mexico will accept shipments from the 20 recertified plants from animals slaughtered before 23 December or after 26 December, the USDA said. Meat processed between those dates remains banned.

The USDA sent plans to Mexico last night for resuming imports from five additional plants, agency spokeswoman Laura Reiser said today in a telephone interview from Washington. Similar plans were sent last week for 19 of the 20 facilities that were recertified, she said.

The plans "show that the plant has taken action to correct the concerns Mexico brought up," Ms Reiser said. The Mexican regulators are 'in a holiday period now,' she said, adding that their review of the companies' plans will probably take a few days.

Tyson, based in Springdale, Arkansas, jumped 70 cents, or 8.9 percent, to $8.55 at 4:15 p.m. in New York Stock Exchange composite trading. Smithfield, based in Smithfield, Virginia, rose $1.15, or 9.4 percent, to $13.42.

Smithfield, Tyson, Cargill and JBS Plants Affected

Smithfield's pork-processing plant in Tar Heel, North Carolina, was among the 20 plants re-certified, the USDA said. The facility, with about 4,650 workers, is among the world's largest and can process 32,000 hogs a day, Smithfield has said.

Smithfield's Farmland pork unit in Crete, Nebraska, also was recertified, as well as its Butterball poultry unit in Carthage, Missouri.

The company's processing facility in Plant City, Florida, remains suspended, as well as its John Morrell & Co. units in Sioux Falls, South Dakota, and Sioux City, Iowa.

Cattle futures for February delivery fell 0.3 cent, or 0.3 to 85.9 cents a pound. The price tumbled 2.5 percent, the most in five weeks, on Dec. 26.

The USDA has added Cargill Meat Solutions in Ottumwa, Iowa, to its list of facilities banned by Mexico, bringing the total to about 31, said the USDA's Ms Reiser. The plant was suspended on 23 December, along with 30 others originally reported by the USDA. It was left off the list because of a miscommunication, she said. The plant was not among the 20 recertified.

A Cargill meatpacking plant in Beardstown, Illinois, that was suspended last week has been recertified, the USDA said. Closely held Cargill, the biggest US agriculture company, is based in Minnetonka, Minnesota.

A Tyson plant in Columbus Junction, Iowa, remains suspended. Mexico lifted bans on at least four of the company's other facilities in Iowa, Nebraska and Texas.

Mexico's import bans on JBS units in Hyrum, Utah, and Louisville, Kentucky, were lifted. JBS is based in Sao Paulo.

Mexico is the biggest importer of US beef and veal, purchasing 559.8 million pounds of the meats in the first 10 months of this year, according to USDA data, concludes the Bloomberg report. The country is the third-largest buyer of US pork and chicken.

To see the list of banned plants on the USDA's web site, click here.