Mexico has announced an end to countervailing duties on U.S. beef and veal – duties that have been in place since 2000. The duties were put in place for certain U.S. packers amid dumping allegations raised by Mexican livestock producers. The U.S. became a net cattle and beef exporter to Mexico in 1996 and today represents a $910 million beef export market.

The Ministry's resolution goes into effect today (Aug. 11, 2010) and eliminates the duties effective April 29, 2010. U.S. beef arriving at Mexico's border starting tomorrow should enter the market duty-free. Companies that have paid duties since April 29 are entitled to a refund of all duties paid.

“The elimination of these duties is a positive development,” said AMI President J. Patrick Boyle, “because a cooperative trading relationship between the U.S. and Mexico is in our mutual best interests.”

The National Cattleman’s Beef Association and U.S. Meat Export Federation both praised the decision.

“For nearly 10 years, U.S. beef producers via NCBA and USMEF have spent an enormous amount of time, money and effort to resolve this issue with Mexico,” said Steve Foglesong, NCBA president and Illinois cattle producer. “Today’s news is a big win for all segments of the beef industry because throughout these 10 years many exporters, small and large, were locked out of our top export market due to these prohibitive duties.”

"This is a very important development for those who advocate free trade, as this decision very much upholds the spirit and intent of NAFTA," said USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont. "It's been a long time coming, and is a direct result of the cooperative effort of several beef industry interests. I want to particularly thank NCBA for its policy work on this issue and the strong relationship it has developed with all sectors of Mexico's beef industry, which really paid big dividends in this case."

Peterson noted that while Mexico is still the leading destination for U.S. beef exports, it is the only major market that is trailing last year's results. The U.S. Trade Representative’s National Trade Estimate Report on Foreign Trade Barriers has estimated that these duties have caused losses of $100 to $500 million annually because of reduced shipments and altered trade flows. Peterson is confident that elimination of the duties will help the market's performance.

"This levels the playing field for all U.S. products entering Mexico and should certainly help us regain momentum in our No. 1 export market," he said. "The foreign markets are very critical to cattle producers' bottom line right now, so this comes as very welcome news. Both countries will benefit substantially from today's action."

The anti-dumping duties are scheduled to sunset every five years, but could have been continued this year upon a request for review by an interested party. Such a request was filed by the association of Mexican cattle producers (Confederación Nacional de Ganaderos, or CNOG), but the organization later withdrew it.

“In recent years, the interested parties in Mexico have concluded that the duties offer them no advantage," said USMEF Regional Director Chad Russell. "Even before the withdrawal motion by CNOG, other Mexican industry associations had remained neutral or actually favored eliminating the duties. This really shows how far the U.S. industry has come in developing a strong trade relationship with Mexico."

Sources: AMI, NCBA

Angus snack wraps available at McDonald's

McDonald's has expanded its offering of Angus products with the introduction of new Angus Snack Wraps. The Angus Snack Wraps offer the same premium burger taste and flavorful ingredients of the Angus Third Pounders with the convenience of a portable, snack-size wrap.

"At McDonald's, we recognize that our customers are looking for more options to accommodate their adventurous tastes and busy lifestyles," said Wade Thoma, McDonald's vice president of U.S. menu management. "The new Angus Snack Wraps combine the bold Angus beef taste and flavorful toppings like red ring onions and sauteed mushrooms that our customers love, now with the convenience and everyday value they expect from McDonald's."

Each of the three Angus Snack Wraps start with half an Angus third-pound patty made of 100 percent Angus beef, wrapped in a soft flour tortilla. Customers can choose from three offerings:
  --  Deluxe: Red tomato, green leaf lettuce, red onions, crinkle cut pickles, American cheese, creamy mayonnaise and yellow mustard
  --  Bacon & Cheese: Red ring onions, crinkle cut pickles, a strip of bacon, American cheese, ketchup and yellow mustard
  --  Mushroom & Swiss: Sauteed mushrooms, Swiss cheese and mayonnaise

The Angus Snack Wrap is the first evolution of the Angus Third Pounder burger line, which was introduced in 2009. McDonald's portable Snack Wrap portfolio began in 2006 and also includes grilled or crispy Chicken Snack Wraps with premium chicken breast meat, cheddar jack cheese, crisp lettuce and a choice of chipotle BBQ, honey mustard, or ranch sauce.

Source: McDonald’s USA LLC

Cagle's sees Q1 income, revenues increase

Cagle's Inc. reported net income of $3.5 million or $0.75 per share for the first quarter of fiscal year 2011 compared to net income of $1.3 million or $0.28 per share for the first quarter of fiscal year 2010. Revenues for the first quarter were $78.6 million up 0.7% reflecting a decrease in pounds sold of 3.1% and an increase in sales price for poultry of $0.013 per pound as compared to the same period of fiscal 2010.

Quoted market prices for products for the first quarter of fiscal 2011 versus the same period last year were mostly down with the exception of boneless breast which increased 9.1%, and breast tenders which increased 7.7%. Wing markets decreased 11%, drums decreased 17%, leg quarters were 19% lower, and whole birds without giblets were quoted 7.3% higher.

Cost of sales for the first quarter of fiscal 2011 decreased 4.9% as compared with the same period last year, from $71.7 million to $68.2 million. Feed ingredient prices for broilers processed in the first quarter of fiscal 2011, which represented 36% of the total cost of sales, decreased 8.5% as compared to the first quarter of fiscal 2010.

A statement from the company read, “This quarter marked the successful completion of the company's transition of its Pine Mountain Valley plant to a deboning facility which has provided Cagle's with the opportunity to market products in the boneless institutional and further processing areas while we continue to exploit fast food and deli product markets at our Collinsville complex. This transition involved expenditures of approximately $5 million for fixed asset and working capital to support the new product lines and has increased pounds processed at Pine Mountain in excess of 20%.

“Our shifting product mix and excellent margins on existing products have provided a good return for the company and it's stakeholders for our first quarter of fiscal 2011. We expect protein markets to continue to be strong for the remainder of this summer supported by low cattle and hog inventories and limited expansion of poultry supplies.”

Source: Cagle’s Inc.

Valley Meats would like to not be confused with Valley Meat

Valley Meats LLC of Coal Valley, Ill., announced that a recent recall of one million pounds of ground beef patties and bulk beef products involved an unrelated but similarly named company, Valley Meat Co. based in Modesto, Calif.

Valley Meats LLC company officials asked that the record be clear that their operation is not facing a USDA recall. The U.S. Department of Agriculture last week ordered Valley Meat Co. of Modesto to recall potentially contaminated beef (E. coli O157:H7) patties and ground beef in California, Texas, Oregon, Arizona and internationally.

Valley Meats LLC noted in a statement that the company has recently employed the Test-and-Hold system for finished ground beef verification sampling and the SANOVA disinfectant system to continuously spray the surfaces of fresh raw materials used to produce ground beef products.

Source: Valley Meats LLC