The southern U.S. border has been closed to livestock imports from Mexico for more than a year, thanks to the New World Screwworm marching northward through Mexico. With very tight cattle supplies in the U.S., what would be the effect of reopening the border on cattle numbers in America? Scott Varilek, a broker with Kooima, Kooima, and Varilek Trading, said it appears that Mexico has begun processing the cattle it had been sending to the U.S.
And we’ve had this Mexican border shut for over a year now, and that’s kind of entering back into the market a little bit here, and just the thought that that’s really negative if it opens. But what’s happened, since that’s been an entire year, is they’ve figured out a way to actually just slaughter those cattle in Mexico. They already have the labor. They don’t have nearly the hoops to jump over that we do in the United States. They can just run 24/7, have three shifts, and keep on moving.”
He thinks Mexico processing its own cattle might change the flow of beef between the North American neighbors.
“I kind of feel like they’ve fixed this problem on their own down there, so maybe they’re not even so quick to push to reopen this border? So that’s kind of an interesting take that we’re having right now, is, okay, maybe we’re just going to be getting beef from Mexico rather than the actual cattle themselves? So that’s been entering the market.”