I was out of town, and didn't get to post last Friday, when Mexico pols drove beef futures at the Chicago Mercantile Exchange into the ground with a transparently political, phony banning of U.S. beef imports due to alleged failures in Country-of-Origin labeling regs.
Anyone with even the vaguest, most shallow, rudimentary knowledge of Mexico trade machinations, could see through this one a mile away. Everyone, that is, except the traders at the Merc, who were salivating at the opportunity to harvest some quick trading commissions at the expense of U.S. cattlemen.
Mexico has already caved, three days later, allowing imports back in from 21 of the 30 U.S. beef plants it banned imports from. The others will be approved shortly. What a farce!
It happens with Mexico all the time, and was definitely of the "ho hum, so what?" category. As the events a mere 72 hours later have proven, this was just one more dalliance by the tinhorn pols in Mexico, taking great delight in kicking sand in the face of the big United States of America.
We could all have a good laugh at Mexico's expense, if it hadn't been so costly for U.S. producers. The Merc peeled a chunk off futures contracts, which naturally spilled over into the cash cattle market. Some of the loss has been restored, as traders sought to earn even more commissions by driving prices back up to where they belong--once the ruse was uncovered.
The stench of the rot and decay at the Merc, and its stranglehold over U.S. cattle prices, is overpowering and cries out for reform. Don't hold your breath, though, with a Democratic president from Illinois who took big campaign contributions from the Merc, voted their way in the Senate, and will most likely leave everything just the way it is.
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