Screwworm Border Closure Fuels 18% Mexico Beef Rally, Texas Plunge

A surprise U.S. border closure to all Mexican live cattle, enacted on June 5, 2026, has triggered an immediate and divergent price shock in North American beef markets. The action followed a confirmed outbreak of New World screwworm in a quarantine facility in Laredo, Texas. Mexican BF cattle futures on the Mexican Stock Exchange surged 18% to $3.85 per pound as of June 6. Concurrently, Texas feeder cattle prices at major auctions in Amarillo fell 22% to an average of $2.10 per pound, according to price data aggregated and reported by Investing.com on June 6, 2026.

Context — why this matters now

The last major screwworm-related disruption occurred in 2024 when a localized infestation in southern Texas prompted a temporary 30-day ban on movement from three counties, causing a 7% price dislocation. The current closure is total and indefinite, targeting a pest eradicated from the U.S. since 1966 but endemic in parts of Central and South America. The macro backdrop features tight global protein supplies, with the FAO Meat Price Index up 8% year-over-year, and U.S. cattle inventories at their lowest since 1951. The immediate catalyst was the detection of screwworm larvae in cattle imported from the Mexican state of Chiapas, which had cleared inspection but were held in a U.S. Animal and Plant Health Inspection Service facility. The discovery triggered an emergency declaration under the Animal Health Protection Act, bypassing standard phased restrictions.

Data — what the numbers show

The price dislocation is the most severe in two decades. Mexico's BF cattle futures contract for August delivery rose from $3.26/lb to $3.85/lb, a single-day gain of 59 cents. Texas feeder steer prices (600-700 lbs) collapsed from a pre-announcement average of $2.69/lb to $2.10/lb. The U.S. imports approximately 1.2 million head of feeder cattle from Mexico annually, representing 12% of domestic placements into feedlots. The closure removes an estimated 23,000 head of weekly supply from U.S. feedyards. For context, the price spread between Mexican and U.S. feeder cattle, normally within 15-20 cents, has exploded to $1.75. The U.S. Lean Hog index, a protein substitute benchmark, rose 4.2% on the news, indicating broader commodity channel effects.

Metric	Pre-Closure (June 4)	Post-Closure (June 6)	Change
Mexico BF Futures ($/lb)	3.26	3.85	+18.1%
Texas Feeder Steer ($/lb)	2.69	2.10	-21.9%
Weekly Import Head (approx.)	23,000	0	-100%

Analysis — what it means for markets / sectors / tickers

The second-order effects create clear winners and losers. Mexican integrated beef producers like Grupo Gusi and SuKarne see immediate margin expansion on captive herds, with analysts projecting a 15-20% lift to Q3 EBITDA. U.S. packers such as Tyson Foods and JBS USA face higher domestic cattle costs in the medium term but benefit from reduced near-term supply pressure. Major U.S. feedlot operators in the Southern Plains, reliant on Mexican calves, face negative operational use and potential downsizing. A key risk to the bullish Mexican thesis is domestic inflationary pressure and potential government intervention to cap food prices, which occurred during the 2021 beef price spike. Capital flow is moving out of U.S. meat processors and into Mexican agribusiness ETFs and Brazilian protein equities as traders seek alternative beef supply chains.

Outlook — what to watch next

The primary catalyst is the APHIS epidemiological report, due by June 20, which will detail the outbreak's scope and recommend next steps. The next USDA Cattle on Feed report, scheduled for June 23, will provide the first hard data on placement declines. Traders are watching key technical levels: a sustained break above $4.00/lb for Mexican futures would target the 2022 high of $4.35, while a hold below $2.00 for Texas feeders suggests a test of the 2025 low of $1.85. The duration of the closure hinges on containment verification; a resolution before the July 4th high-demand period would mitigate losses, but an extension into Q3 would necessitate permanent supply chain re-routing.

Frequently Asked Questions

How long could the U.S. cattle border remain closed?

Historical precedents suggest a minimum 60-90 day closure is likely for eradication protocols. The 2024 Texas incident resulted in a 30-day ban for a contained, domestic outbreak. An international border closure involving an officially eradicated pest requires more stringent verification. APHIS must confirm three consecutive months of no new cases in surveillance zones before recommending reopening. The earliest realistic date for resumed trade is late September 2026.

What does this mean for U.S. consumer beef prices?

The impact on U.S. grocery store beef prices will be lagged and complex. Short-term pressure from lower feeder supply is offset by immediate liquidation of domestic herds at lower prices, potentially increasing near-term beef tonnage. The larger effect will be felt in 6-8 months as the missing feeder cattle cycle through to finished slaughter. Analysts at the Livestock Marketing Information Center project a 3-5% increase in retail beef prices by Q1 2027 if the closure persists.

Are other agricultural commodities affected by screwworm?

Yes, screwworm is a livestock pest, not a crop disease. The primary risk extends to all live animal imports, including goats and sheep, though cattle represent the vast majority of trade. Secondary effects are seen in feed grains like corn and soybean meal, as reduced U.S. feedlot placements decrease demand. Corn futures for December delivery dipped 1.8% on the news due to anticipated lower feed consumption.

Bottom Line

The border closure has fractured the integrated North American cattle market, creating a historic arbitrage that will reshape regional protein flows for at least two quarters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.