December 26, 2008 / 6:13 PM / in 9 years

Mexico suspends purchases from 30 U.S. meat plants

CHICAGO (Reuters) - Mexico has suspended purchases from 30 U.S. meat plants, some of which of are the largest in the country, in what may be retaliation for the United States implementing a country-of-origin labeling (COOL) law, industry sources said on Friday.

However, a meat trade group said the bans could be related to some point-of-entry violations that arose this autumn.

USDA on Friday listed the affected plants on its website, but the suspensions became effective on Wednesday. The listed plants produce beef, lamb, pork, and poultry.

Mexico is a leading buying of U.S. meat and news of the suspensions sent cattle and hog futures sharply lower on Friday at the Chicago Mercantile Exchange.

The banned plants are owned by leading U.S. meat companies, including Cargill Inc, Tyson Foods Inc, JBS, Seaboard and Smithfield Foods, according to the list on USDA’s website.

The list of the affected plants can be found here

A reason was not given for Mexico’s action, but some U.S. analysts believe the country is retaliating for the labeling law. Under the law, which became effective this year, supermarket meat packages must carry labels stating the countries where the meat animals were raised.

Mexican officials allege the labeling law will have U.S. consumers discriminating against Mexican beef.

“That is the only reason that we could see for Mexico doing this,” Rich Nelson, analyst at Allendale Inc, said of the prospect of retaliating for COOL.

“That is bad news,” Jim Clarkson, Chicago-based analyst at A&A Trading said of Mexico’s action. “They (Mexico) are fighting COOL and the bans could stay in place for several weeks.”

Many U.S. meat plants had been warned by Mexico earlier this year of alleged “point of entry violations” and Friday’s suspensions could be related to that, said Jim Herlihy, spokesman for the U.S. Meat Export Federation.

Point of entry violations could be a number of things including incorrect paperwork or labeling issues, he said.

Due to the holiday period, attempts on Friday were unsuccessful to reach Mexican officials, USDA officials, and many of the U.S. meat companies.

Editing by Marguerita Choy

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