Feeder cattle supplies just got a little tighter.
The US Animal and Plant Health Inspection Service over the weekend clamped import restrictions on cattle and bison from Mexico after a case of New World Screwworm was confirmed in a cow in Chiapas state, which is near the Guatemalan border.
The US hasn’t had a reported case of screwworm since 1966, but in the last two years, it has spread north of a barrier throughout Panama and into Costa Rica, Nicaragua, Honduras, Guatemala and now Mexico. AHPIS is releasing sterile flies through aerial and ground release at strategic locations around Central America, Morning Ag Clips said.
EFFECT ON MARKETS
The immediate market effect isn’t known, said Tyler Cozzens, director of the Livestock Marketing Information Center in Denver. APHIS hasn’t defined “restrictions” yet, he said.
Are they regional; are they numerical; are they a total cutoff? There are several things about APHIS’s response that are unknown.
The news was said to have bumped feeder cattle prices, but feeder cattle futures at the CME were only moderately higher Monday. The APHIS restrictions were expected to remain in place for about a month, but with no firm deadline, the implication is that they could be extended.
The US doesn’t import much meat from Mexico, but feeder cattle from there make up a not-insignificant percentage of US fed cattle.
A Google search revealed that over the last 25 years, an average of 1.15 million head of cattle were imported from Mexico each year, representing about 3% to 5% of the overall cattle market.
The problem for the US feeder cattle market currently is that the US cattle herd has been declining since 2019, and feeder cattle supplies have been declining with the declining birth rate.
BACKGROUND
NWS is a serious pest that can damage all warm-blooded animals. The flies lay their eggs in and around any open wound, and the larva consume living tissue, causing serious infections.
A proactive approach of releasing sterile flies is used by the USDA to prevent infection.
Morning Ag Clips said the flies normally don’t travel more than a couple miles if there are suitable host animals in the area.
A market analyst said the relatively sedentary nature of the flies means seeding with sterile flies may make a difference in the infection rate.
But Morning Ag Clips said infections can be difficult to detect in the early stages. The eggs are creamy and white and are near the edges of superficial wounds.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.15 per cwt to $187.58, compared with last week’s range of $185.00 to $190.15 per cwt. FOB dressed steers, and heifers went for $290.89 per cwt to $291.06, compared with $290.32 to $295.19.
The USDA choice cutout Monday was up $2.30 per cwt at $309.71 while select was up $1.67 at $273.74. The choice/select spread widened to $35.97 from $35.34 with 95 loads of fabricated product and 31 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $330.59 per cwt, and 50% beef was $78.39.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged to down $0.07 at $1.35 to $1.54 a bushel over the Dec corn contract and unchanged in Kansas at $0.25 over Dec, which settled at $4.24 3/4 a bushel, down $0.00 3/4.
The CME Feeder Cattle Index for the seven days ended Friday was $254.72 per cwt, up $0.18. This compares with Monday’s Jan contract settlement of $255.47, up $1.17.