Mexico suspends purchase of U.S. meat
Mexico temporarily stops meat purchase from 30 U.S. meat plants, citing sanitation issues.
CHICAGO, (Reuters) -- Mexico has suspended purchases from 30 U.S. meat plants, some of which are the largest in the country, due to sanitary issues, but U.S. analysts argue Mexico is retaliating for a U.S. meat-labeling law that allegedly could hurt Mexican meat sales here.
Mexico denied the retaliation charge and said purchases from the affected plants could resume as early as Monday.
USDA on Friday listed the affected plants on its Web site, but the suspensions became effective on Wednesday. The listed plants produce beef, lamb, pork and poultry and can be found at http://www.fsis.usda.gov/OFO/export/lmexico.htm.
Mexico is a leading buyer of U.S. meat, and news of the suspensions sent cattle and hog futures sharply lower on Friday at the Chicago Mercantile Exchange.
Many of the banned plants are owned by the largest U.S. meat companies, including Cargill Inc, Tyson Foods Inc (TSN, Fortune 500), JBS, Seaboard (SEB) and Smithfield Foods. (SFD, Fortune 500)
"If everything goes well, the plants could be re-listed next Monday," Mexico's agriculture ministry said Friday.
The ministry said the affected plants fell short on standards like packaging, labeling and some transport conditions.
CANADA, MEXICO OPPOSED LAW
Under the labeling law, commonly called Country-of-Origin Labeling or COOL, meat packages in U.S. supermarkets must carry labels stating the countries where the meat animals were raised.
U.S. consumer and farm groups say the labeling rules will distinguish U.S.-grown food from imports on the grocery shelf and fulfill the shopper's right to know about products.
Canadian and Mexican officials have opposed the law arguing that it will have U.S. meat plants and consumers discriminating against non-U.S. animals and meat. Both countries ship livestock into the United States.
Earlier this year, Mexico had warned many U.S. meat plants of alleged "point of entry violations," and Friday's suspensions may have been related to that, Jim Herlihy, spokesman for the U.S. Meat Export Federation, said early on Friday.
Point of entry violations could be a number of things including incorrect paperwork or labeling issues, he said.
ANALYSTS NOT CONVINCED
While Mexico denied retaliating for COOL, U.S. analysts were not convinced.
"It appears they are using this to send a signal to our government that they don't like COOL," Don Roose, analyst at U.S. Commodities, said of Mexico's action.
Prior to Mexico saying shipments could resume on Monday, Roose had predicted the bans would be short, because Mexico needs the meat for its population.
"You have to feed the masses," he said.
News of the bans prompted selling in U.S. cattle and hog markets at the Chicago Mercantile Exchange on Friday, closing the markets lower.
"That is bad news," Jim Clarkson, Chicago-based analyst at A&A Trading said of Mexico's action. "They (Mexico) are fighting COOL."
After Mexico denied it was retaliating for COOL, Clarkson still predicted the labeling law may have helped prompt the bans.
Due to the holiday period, attempts on Friday to reach USDA officials and many of the U.S. meat companies were unsuccessful. 
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