USMEF-Mexico Update on Proposed Export Rule Changes
USMEF staff in Mexico and the United States are continuing to work with officials from the U.S. Embassy in Mexico, Mexican trade associations and the Mexican government to facilitate an agreement that would reverse a proposed prohibition on the use of combo packaging for all meat except for non-frozen mechanically deboned meat imported into Mexico.
Based on input received from U.S. industry representatives, USMEF developed position papers for U.S. and Mexican government officials and industry representatives in Mexico. One of the organizations contacted by USMEF-Mexico has told USMEF that it will present the information at a meeting this week with the Secretary of Economia and at a later meeting with the Secretary of Agriculture. Furthermore, as a result of USMEF sharing of information with officials from the Mexican government, these officials are seeking meetings with counterparts in Mexico’s Secretariat of Agriculture.
Other meetings involving the USDA, Mexican private sector organizations, and Mexican government officials also are taking place this week in an effort to ensure that all of the affected parties in Mexico are fully briefed on the serious negative implications of the proposed change in Mexico’s import rules.
“If this prohibition is upheld, the Mexican meat processing industry and end consumers will experience dramatically higher prices for pork and pork products – and for beef and beef products to a lesser extent,” said Chad Russell, regional director for USMEF-Mexico. “Higher prices will contribute to increased inflation and could negatively impact employment in those companies using U.S. pork and beef, especially those that produce further-processed meat products.”
The proposed change in Mexico’s packaging requirements would have a very significant impact on shipments of U.S. pork and beef to Mexico. Currently, about 80 percent of shipments of U.S. pork and as much as 10 percent of U.S. beef exported to Mexico are shipped in combo packaging. For the first 10 months of 2008, this represents approximately 160,000 metric tons (352.7 million pounds) of pork, mainly hams and other items for further processing in Mexico, and 18,000 metric tons (39.7 million pounds) of beef, primarily trimmings used in the production of hamburger.
The U.S. red meat industry does not have sufficient packaging capacity to maintain export volumes to Mexico if this new requirement goes into effect, and adding the required capacity would cost millions of dollars. Even assuming that adding this capacity would not be cost-prohibitive, it is estimated that it would take 9 to12 months to make the changes necessary to handle current export volumes to Mexico.
“During the transition to these new packaging systems there would be a huge disruption in the supply of affected products to the Mexican market,” Russell said. “For example, USMEF estimates that the volume of exports of ham and other pork products for further processing in Mexico could plummet by 80 percent. The resulting shortage of the affected pork and beef items would push up prices for consumers as well as meat processing companies, which are major employers in Mexico. Furthermore, this would also seriously and negatively impact Mexican pork producers, since the increase in prices would affect the confidence and spending of price-sensitive Mexican consumers, who likely would shift purchases to less expensive protein options. This would come at a time when the Mexican government is struggling to keep inflation under control and minimize the impact of the global economic downturn on employment.”
At the same time, the loss of the Mexican market for the affected products would trigger a short-term glut of these products in the U.S. market and put downward pressure on prices in the entire meat complex in the United States. As a result, there would be a widening gap between pork product prices in the United States and Mexico.
The original effective date of this policy change was Jan. 15, 2009, but it has since been postponed to Jan. 30, 2009. USMEF will continue to provide updates on the discussions as they develop.
USMEF Leaders to Provide International Markets Update at AFBF Annual Meeting
Farmers and ranchers attending the American Farm Bureau Federation’s (AFBF) 90th Annual Meeting will hear an update on global beef and pork exports from USMEF’s volunteer leadership. The meeting is scheduled for Jan. 11-14 in San Antonio.
At a luncheon hosted by the Iowa Farm Bureau on Sunday, Jan. 11, USMEF Vice Chairman Keith Miller of Great Bend, Kan., and USMEF executive committee member Calvin Rozenboom of Oskaloosa, Iowa, will address convention attendees regarding USMEF marketing activities, the prospects for increasing beef and pork exports in the coming year, and the impact of the global financial crisis on world markets. In addition to their leadership roles at USMEF, Miller and Rozenboom are active leaders in the AFBF, as well as in their state and local farm bureau organizations.
“We need to keep developing our relationship between USMEF and the local farm bureaus across the United States,” Miller said. “We have a unique partnership, and we have the same goal of getting more of our products moving overseas. This is a place where we are working together.”
Miller added that the AFBF annual meeting provides a unique opportunity to reach out to a diverse cross-section of agricultural producers, which is an important point of emphasis for USMEF.
“Just about every funding partner that’s involved with USMEF is also involved with the American Farm Bureau,” he said. “We receive support from such a wide range of farmers and ranchers across the country, and they are well-represented at this convention.”
The global financial crisis has a major impact on the nation’s farmers and ranchers, as factors such as currency volatility, credit availability and consumer spending affect demand and prices for agricultural products. Miller says AFBF members look forward to the annual meeting as a source of detailed information on these issues.
“That’s one of the reasons so many farmers and ranchers attend the AFBF annual meeting,” he said. “Farming’s gotten to be a big business, and the people involved in farming today want to hear from experts on what’s going on in the industry and in the world marketplace.”
Miller said AFBF members rely on convention update sessions on specific issues for information that helps prepare them to vote on the organization’s policy – a process that will take place on Jan. 13 and 14.
“It’s a wonderful way to set policy, because it’s actually coming from the people who are living on farms and doing the work on their farms. It’s their policy – not the policy of someone in Washington, D.C.”
For more information on the AFBF annual meeting, please visit www.fb.org.
AgTC Concerned about Transpacific Carrier Agreement
The Agriculture Transportation Coalition (AgTC) wrote to the Federal Maritime Commission to voice its concerns about the proposal that transpacific carriers would agree on capacity, both vessels and containers, that they will collectively and individually, deploy in the U.S. to Asia trade. To see the AgTC letter, go to the AgTC website, www.agtrans.org and click on the Issues link on the left side.
The AgTC strongly opposes the amendment by the Transpacific Stabilization Agreement which would allow the 14 member carriers, which move approximately 85 percent of the cargo between the U.S. and Asia, to collectively discuss and agree upon vessel and container capacity that the carriers collectively deploy, and that each carrier deploys in the TransPacific trades.
Anyone wishing to write to the FMC, should address its secretary:
Honorable Karen V. Gregory
Office of the Secretary
Federal Maritime Commission
Fax: 202-523-0014
E-mail: secretary@fmc.gov
For more details, the latest AgTC message, TransPacific Carriers to Agree on Capacity, is online.
A list of Ag Shipper Workshops & Luncheons in 2009 can be read at the AgTC section of www.USMEF.org. USMEF members pay the member rate for AgTC workshops since USMEF is a member of the coalition.
USMEF staff in Mexico and the United States are continuing to work with officials from the U.S. Embassy in Mexico, Mexican trade associations and the Mexican government to facilitate an agreement that would reverse a proposed prohibition on the use of combo packaging for all meat except for non-frozen mechanically deboned meat imported into Mexico.
Based on input received from U.S. industry representatives, USMEF developed position papers for U.S. and Mexican government officials and industry representatives in Mexico. One of the organizations contacted by USMEF-Mexico has told USMEF that it will present the information at a meeting this week with the Secretary of Economia and at a later meeting with the Secretary of Agriculture. Furthermore, as a result of USMEF sharing of information with officials from the Mexican government, these officials are seeking meetings with counterparts in Mexico’s Secretariat of Agriculture.
Other meetings involving the USDA, Mexican private sector organizations, and Mexican government officials also are taking place this week in an effort to ensure that all of the affected parties in Mexico are fully briefed on the serious negative implications of the proposed change in Mexico’s import rules.
“If this prohibition is upheld, the Mexican meat processing industry and end consumers will experience dramatically higher prices for pork and pork products – and for beef and beef products to a lesser extent,” said Chad Russell, regional director for USMEF-Mexico. “Higher prices will contribute to increased inflation and could negatively impact employment in those companies using U.S. pork and beef, especially those that produce further-processed meat products.”
The proposed change in Mexico’s packaging requirements would have a very significant impact on shipments of U.S. pork and beef to Mexico. Currently, about 80 percent of shipments of U.S. pork and as much as 10 percent of U.S. beef exported to Mexico are shipped in combo packaging. For the first 10 months of 2008, this represents approximately 160,000 metric tons (352.7 million pounds) of pork, mainly hams and other items for further processing in Mexico, and 18,000 metric tons (39.7 million pounds) of beef, primarily trimmings used in the production of hamburger.
The U.S. red meat industry does not have sufficient packaging capacity to maintain export volumes to Mexico if this new requirement goes into effect, and adding the required capacity would cost millions of dollars. Even assuming that adding this capacity would not be cost-prohibitive, it is estimated that it would take 9 to12 months to make the changes necessary to handle current export volumes to Mexico.
“During the transition to these new packaging systems there would be a huge disruption in the supply of affected products to the Mexican market,” Russell said. “For example, USMEF estimates that the volume of exports of ham and other pork products for further processing in Mexico could plummet by 80 percent. The resulting shortage of the affected pork and beef items would push up prices for consumers as well as meat processing companies, which are major employers in Mexico. Furthermore, this would also seriously and negatively impact Mexican pork producers, since the increase in prices would affect the confidence and spending of price-sensitive Mexican consumers, who likely would shift purchases to less expensive protein options. This would come at a time when the Mexican government is struggling to keep inflation under control and minimize the impact of the global economic downturn on employment.”
At the same time, the loss of the Mexican market for the affected products would trigger a short-term glut of these products in the U.S. market and put downward pressure on prices in the entire meat complex in the United States. As a result, there would be a widening gap between pork product prices in the United States and Mexico.
The original effective date of this policy change was Jan. 15, 2009, but it has since been postponed to Jan. 30, 2009. USMEF will continue to provide updates on the discussions as they develop.
USMEF Leaders to Provide International Markets Update at AFBF Annual Meeting
Farmers and ranchers attending the American Farm Bureau Federation’s (AFBF) 90th Annual Meeting will hear an update on global beef and pork exports from USMEF’s volunteer leadership. The meeting is scheduled for Jan. 11-14 in San Antonio.
At a luncheon hosted by the Iowa Farm Bureau on Sunday, Jan. 11, USMEF Vice Chairman Keith Miller of Great Bend, Kan., and USMEF executive committee member Calvin Rozenboom of Oskaloosa, Iowa, will address convention attendees regarding USMEF marketing activities, the prospects for increasing beef and pork exports in the coming year, and the impact of the global financial crisis on world markets. In addition to their leadership roles at USMEF, Miller and Rozenboom are active leaders in the AFBF, as well as in their state and local farm bureau organizations.
“We need to keep developing our relationship between USMEF and the local farm bureaus across the United States,” Miller said. “We have a unique partnership, and we have the same goal of getting more of our products moving overseas. This is a place where we are working together.”
Miller added that the AFBF annual meeting provides a unique opportunity to reach out to a diverse cross-section of agricultural producers, which is an important point of emphasis for USMEF.
“Just about every funding partner that’s involved with USMEF is also involved with the American Farm Bureau,” he said. “We receive support from such a wide range of farmers and ranchers across the country, and they are well-represented at this convention.”
The global financial crisis has a major impact on the nation’s farmers and ranchers, as factors such as currency volatility, credit availability and consumer spending affect demand and prices for agricultural products. Miller says AFBF members look forward to the annual meeting as a source of detailed information on these issues.
“That’s one of the reasons so many farmers and ranchers attend the AFBF annual meeting,” he said. “Farming’s gotten to be a big business, and the people involved in farming today want to hear from experts on what’s going on in the industry and in the world marketplace.”
Miller said AFBF members rely on convention update sessions on specific issues for information that helps prepare them to vote on the organization’s policy – a process that will take place on Jan. 13 and 14.
“It’s a wonderful way to set policy, because it’s actually coming from the people who are living on farms and doing the work on their farms. It’s their policy – not the policy of someone in Washington, D.C.”
For more information on the AFBF annual meeting, please visit www.fb.org.
AgTC Concerned about Transpacific Carrier Agreement
The Agriculture Transportation Coalition (AgTC) wrote to the Federal Maritime Commission to voice its concerns about the proposal that transpacific carriers would agree on capacity, both vessels and containers, that they will collectively and individually, deploy in the U.S. to Asia trade. To see the AgTC letter, go to the AgTC website, www.agtrans.org and click on the Issues link on the left side.
The AgTC strongly opposes the amendment by the Transpacific Stabilization Agreement which would allow the 14 member carriers, which move approximately 85 percent of the cargo between the U.S. and Asia, to collectively discuss and agree upon vessel and container capacity that the carriers collectively deploy, and that each carrier deploys in the TransPacific trades.
Anyone wishing to write to the FMC, should address its secretary:
Honorable Karen V. Gregory
Office of the Secretary
Federal Maritime Commission
Fax: 202-523-0014
E-mail: secretary@fmc.gov
For more details, the latest AgTC message, TransPacific Carriers to Agree on Capacity, is online.
A list of Ag Shipper Workshops & Luncheons in 2009 can be read at the AgTC section of www.USMEF.org. USMEF members pay the member rate for AgTC workshops since USMEF is a member of the coalition.