Mexico begins to lift ban on U.S. meat plants

MEXICO CITY/WASHINGTON (Reuters) - Mexico took steps to resume imports of U.S. meat on Monday from 21 of 30 plants that had been sanctioned for technical and sanitary issues, a source at the country's agriculture ministry said.

Mexico suspended shipments from the beef, pork, lamb and poultry plants last Tuesday over sanitary conditions involving packaging, labeling and transportation in what U.S. industry officials said was an unusually large delisting of their plants.

The U.S. Agriculture Department's Food Safety and Inspection Service reported that corrective action had been taken at 21 of the plants, a Mexican official told Reuters, noting that bans on imports from the plants will be removed.

The Mexican government was still awaiting word from FSIS on what remedies were being made at the remaining nine plants, the official said.

Mexico is the largest export market by volume for U.S. beef, veal and turkey, the second largest for pork and the third largest for chicken, according to U.S. government statistics.

On Friday, U.S. analysts speculated the bans were sparked by Mexico's opposition to a recently enacted meat labeling law. But Mexico and the USDA both denied the retaliation charge.

U.S. cattle and hog prices slumped on the news on Friday, but markets rebounded as the suspensions were expected to be short-lived.

Many of the banned plants are owned by the largest U.S. meat companies, including Cargill Inc, Tyson Foods Inc, JBS, Seaboard and Smithfield Foods.

From time to time, U.S. meat plants can be temporarily removed from the approved lists of foreign buyers, a USDA spokesman said.

"These are matters that are handled appropriately at the government-to-government level and are generally resolved in a routine manner," Keith Williams said, declining to specifically comment on why Mexico delisted the 30 plants, and how long the trade hiccup could last.

"Any speculation about a timeline would not be accurate," he said.

The timing of the issue during the Christmas season complicated its resolution, said Janet Riley, a spokeswoman for the American Meat Institute.

"While it is in no way common to have this many plants all delisted at once, it has happened before," Riley said.

Tyson Foods and Smithfield Foods told Reuters they continued to export meat to Mexico from other plants that were not affected by the measures.

"This is the first time, I think, that Tyson or the industry have had this many plants affected at one time," said Archie Schaffer, senior vice president for external relations for Tyson Foods, which had six pork plants delisted by Mexico.

A U.S. Trade Representative spokesperson was not available for comment.

(Additional reporting by Bob Burgdorfer in Chicago; Editing by Russell Blinch and David Gregorio)