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Expect to See More Beef Business With Mexico

The U.S. Meat Export Federation is hopeful of an up-tick in beef exports to Mexico in the second half of this year after Mexico ended longstanding anti-dumping duties on U.S. beef last week.

The tariff relief is retroactive to April 29 and duties paid since then will be refunded as part of the deal negotiated with Mexico by the National Cattlemen's Beef Association and the U.S. Meat Export Federation.

USMEF Spokesman Joe Scheule says the three to 30-cent per pound duties in a price sensitive market hurt imports of U.S. beef and favored pork and poultry imports. Now with the duties gone he says there's a chance for recouping some of the losses.

"I think that now that these duties have been eliminated you're going to see more packers and processors re-interested in doing business in Mexico," Scheule said. "Some of them left the market because they didn't feel like there was a level playing field, that the duties put them at a competitive disadvantage. If they reenter the market the way we hope they will, we could see an up-tick in business here in the second half of the year."

Longer term, Scheule says the growth potential in Mexico is significant. He points to numbers from 2008 when the U.S. exported more beef to Mexico than they had exported to the world in 2005. Numbers last year and so far this year have been down a bit, but Scheule says that 2008 number shows the tremendous potential of beef exports to Mexico.

Scheule doesn't expect U.S. beef to reach that number again this year, but is hopeful about the long term.

"Certainly the elimination of the duties and getting more players back and lowering the cost of doing business there, gives us the opportunity to build this market back up to where we were a couple years ago and then, beyond that," Scheule said.

Scheule says the U.S. exported $309 million worth of beef to Mexico through this past May, down from $419 million for the same period last year. A weak Mexican economy and currency have also contributed to the recent lackluster performance.