By Kylie Madry and Heather Schlitz
MEXICO CITY/CHICAGO (Reuters) -U.S. cattle futures soared to record highs on Monday after Washington suspended cattle imports from Mexico over a flesh-eating parasite, which Mexican President Claudia Sheinbaum denounced as unfair.
New World screwworm maggots burrow into open wounds on cattle and other animals, often killing their host within weeks. Though screwworm has been eradicated in the U.S. since 1966, the U.S. agriculture department warned there was a risk of re-introduction.
The import suspension threatened to increase U.S. beef prices by further tightening the supply of cattle, already at its lowest in decades.
All cattle futures contracts, traded in Chicago, hit lifetime highs following the halt.
“Cattle are on fire,” said Dan Norcini, independent livestock analyst.
The parasite was detected in cattle herds in southern Mexico in November, prompting the USDA to temporarily stop imports.
On Sunday, U.S. Agriculture Secretary Brooke Rollins said she was suspending livestock imports again through the southern U.S. border due to the pest’s “unacceptable northward advancement”. She added that the suspension would be in place on a “month-by-month” basis.
Mexican Agriculture Minister Julio Berdegue said the measure would last 15 days, which Sheinbaum repeated in a regular press conference.
The U.S. typically imports more than a million cattle a year from Mexico. U.S. cattle supplies have dwindled and beef prices soared after drought reduced grazing lands and caused ranchers to slash their herds in recent years.
Chicago Mercantile Exchange June live cattle futures ended the day 2.15 cents higher at 216.825 cents per pound, and August feeder cattle futures settled 6.075 cents higher to 306.375 cents per pound.
“The border closure will create economic harm for U.S. farmers and ranchers, and create supply chain disruptions,” the National Cattlemen’s Beef Association said. “The costs will be far less than if New World screwworm crosses into the United States.”
“We hope that this measure, which we consider unfair, will be lifted very soon,” Sheinbaum said.
Washington and Mexico reached an agreement last month on the handling of the pest, though the U.S. said the efforts were not enough.
(Reporting by Kylie Madry in Mexico City, Heather Schlitz and Tom Polansek in Chicago; Editing by Aida Pelaez-Fernandez and Cynthia Osterman)
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