Sort & Cull

Last Friday, Nov. 22, Mexico's Chief Veterinary Officer notified the USDA's Animal and Plant Health Inspection Service (APHIS) of a positive New World screwworm (NWS) finding in a cow in Chiapas, a southern Mexico state near the Guatemala border.

News of the screwworm finding didn't spread until Monday morning, but had a riveting effect on the feeder cattle complex. APHIS officially stated, "Given the severity of the threat from NWS, APHIS is restricting the importation of animal commodities originating from or transiting Mexico effective immediately and pending further information from Mexican veterinary authorities on the size and scope of the infestation."

(Click here to access the full stakeholder announcement from APHIS: https://www.aphis.usda.gov/… and more about the screwworm at https://www.aphis.usda.gov/…)

At this point, few details are known about the situation, but from a domestic feeder cattle standpoint -- the sky is the limit if Mexican feeder cattle imports are going to be restricted for the unforeseeable future.

As of Nov. 21, the USDA's Mexico Livestock Imports/Exports report shared that thus far through 2024 there have been 1,195,702 head of Mexican feeder cattle imported into the United States -- which is 13% more than what had been imported at this time a year ago. For perspective, Canadian feeder cattle imports for the year as of last week have only totaled 137,040 head -- which is down 12% compared to a year ago.

At the start of Nov. 25, the feeder cattle complex was trading anywhere from $3 to $4 higher as the news spread rapidly. However, as the day traded on, the buzz throughout the complex simmered, and although the feeder cattle market continued to trade higher, it wasn't as wild as it had been at the start of the day.

Last week, the feeder cattle complex was well supported as the January feeder cattle contract gained $7.08 throughout the week, the March feeder cattle contract gained $7.47 throughout the week, and CME feeder cattle index closed Friday afternoon at $254.54.

Collectively, this shows the immense support the market was already receiving and given the current state of the U.S. beef cowherd inventory and the fact that beef cow herd hasn't began rebuilding yet, feeder cattle supplies in 2025 will be slim yet again. And, as a result of this fundamental reality alongside the news of cattle import restrictions out of Mexico, feeder cattle prices are likely going to jolt higher until import restrictions are eased.

For anyone who was feeling glum about not marketing their calves earlier this summer when the market appeared to have made its yearly top, another promising opportunity may have just stumbled its way upon you.

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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