Livestock Brace for Fresh Challenges Ahead; USDA Contemplating Trade Barriers Against Mexican Imports
Cattle Futures Step Up, Live Animal Imports Under Threat
It's a bullish week for live cattle futures, with prices steadily climbing and a strong presence from managed money in the market. The June contract closed $4.175 higher last week at $208.250, the August contract remained unchanged at $204.100, while the May feeder cattle contract soared $3.675 to close at $290.525. Cash trade held off until Friday, with the South coming in at $212-213 and the North at $217-218.
Meanwhile, tensions flare over live animal imports into the U.S. From Mexico, as Secretary Rollins sends a stern letter threatening restrictions if the country fails to cooperate in halting the spread of New World Screwworm. The deadline for action is set for April 30.
The USDA's National Wholesale Boxed Beef report shows an increase, with the Chc/Sel averaging $16.37. choice beef boxes were up $2.78 at $336.48/cwt, while select boxes rose $3.76 to $320.11. Weekly federally inspected cattle slaughter estimated at 555,000 head is 21,000 head below the week prior and 58,723 head less than the same week last year.
Politically speaking, the simmering feud between the U.S. and Mexico over the NWS outbreak could potentially impact trade relations. Mexico has pledged to up its control systems, though it's yet to cede full eradication control to the U.S. This standoff may escalate into trade restrictions on live cattle, bison, and equine imports, which could pose significant economic risks.
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On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view our website's Disclosure Policy.
Additional Insights:
- The U.S. temporarily halted live cattle and bison imports from Mexico in November 2024 due to the NWS outbreak but reopened the border in February 2025 under new inspection protocols.
- The resurgence of NWS poses risks, potentially costing the agricultural industry millions if the outbreak spreads to the U.S. Stresses in U.S.-Mexico trade relations compound the issue.
- Mexico has committed to strengthening its control systems to prevent the spread of NWS across its territory but hasn't agreed to give full control over eradication efforts to the U.S.
- The rise in cattle futures could potentially be influenced by the ongoing political tensions between the U.S. and Mexico over the New World Screwworm outbreak, as restrictions on live cattle imports from Mexico could pose significant economic risks for the industry and finance.
- The average price for choice and select beef boxes, as reported by the USDA, increased last week, yet the average rates in the cattle futures market remain to be seen, given the potential impact of trade restrictions on live animal imports.
- The futures market for cattle and other live animal imports (like bison and equine) could be affected by the USDA's efforts to cooperate with Mexico in halting the spread of the New World Screwworm, as a failure from Mexico to comply with the set deadline could result in restrictions.
