Mexico partially lifts US beef import ban

8 March 2004

The Mexican Ministry of Agriculture has announced that Mexico will resume importing US boneless beef cuts derived from cattle aged less than 30 months. At this stage, Mexico will permit imports of beef from US facilities approved by the Mexican government that handle only animals under 30 months of age or that have acceptable segregation procedures. Mexico banned imports of US beef following the confirmation of a case of BSE in the US on 23 December, 2003. Mexico was the second largest export destination for US beef in 2003, accounting for 23% of total exports. The US cattle market has risen significantly in the past three weeks in anticipation of the resumption of beef trade with Mexico. March feeder cattle futures contracts increased 4US&icent; over the period to 87US&icent;/lb lwt, up 12US&icent; from last year. Similarly, April live cattle futures contracts have risen 7US&icent; to 79US&icent;/lb lwt over the past two weeks, up 5US&icent; from last year. The resumption of trade with Mexico will provide a much needed outlet for US beef. Meat prices in Mexico have risen sharply over the past year, in part due to the strong demand from the US for Mexican feeder cattle to replace those previously imported from Canada. With US prices lower due to the global export restrictions, exports to Mexico are likely to be even larger than last year. In particular, lower quality cuts, which were previously shipped to Japan and Korea, could find an attractive market in Mexico. This is likely to partly restore import prices for cuts into the US market. Also, the prices of Australian 75CL and 85CL product, and as a result 90CL manufacturing beef, should improve as a significant quantity of US beef cuts previously exported had been ground over the past month. Source: Meat & Livestock Australia

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