U.S. Hopes Rule Change Will Aid Beef Trade
Comment of the Day

March 12 2012

Commentary by Eoin Treacy

U.S. Hopes Rule Change Will Aid Beef Trade

This article by Alan Bjerga for the Washington Post may be of interest to subscribers. Here is a section:
It would also open the United States to imports from countries where domestic restrictions may not match the standards set by the Paris-based World Organization for Animal Health, said Colin Woodall, a lobbyist with the National Cattlemen's Beef Association in Washington. The United States, the world's third-biggest beef exporter, after Australia and Brazil, has more to gain from encouraging exports than from import competition, he said.

The United States exported $11.9 billion worth of red meat last year, more than double the $5.4 billion in imports, USDA data show. Cargill "fully supports the updating of USDA's rule," spokesman Michael Martin said in an e-mail. Tyson Foods referred requests for comment to the cattlemen's beef group.

The American Meat Institute, a trade group representing meatpackers including Tyson and JBS Swift & Co., said it had not seen the plan. Still, "using internationally recognized, science-based standards as the basis for trade facilitates exports and imports," benefiting consumers and producers, President J. Patrick Boyle said in an e-mail.

Eoin Treacy's view The EU is also currently discussing a rule change that would allow US beef into Europe; further opening up the global market for red meat. Feeder cattle has been among the best performing futures contracts over the last couple of years. It broke upwards to new highs in late 2010 and has found support in the region of the 200-day MA on successive occasions. It is currently overbought and susceptible to the next reversion toward the mean.

Tyson Foods found support in the region of the 200-day MA from late February and a sustained move below $18.50 would be required to question potential for additional upside. Sanderson Farms is outperforming.

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