The U.S. Department of Agriculture has announced a phased reopening of the southern border to Mexican cattle imports beginning Aug. 24 at the Douglas, Arizona port of entry. The border closed in May of last year to prevent the spread of New World screwworm. For cattle feeders, the announcement marks an important step toward rebuilding supplies after months of restricted imports. Texas Cattle Feeders Association Chairman Laphe LaRoe says many feed yards have felt the impact of the closure, since the U.S. typically imports over 1 million head of cattle from Mexico every year.
“From a feed yard standpoint is, about 15% of the inventories within the TCFA area were dependent upon the Mexico cattle. There’s some individual feed yards that were as much as 50 to 65% of their population was cattle that were coming from old Mexico. So, you know, in general, it sure hurts some of the feed yards. And if you just go all the way back to thinking about, you’ve got that many less cattle with that much more buyer attention, then the purchase prices of all of the cattle just gets higher and higher.”
LaRoe says reopening the border will provide relief in the cattle supply, but it won’t immediately return the market to normal. Imports will resume gradually under strict inspection.
“The thing about, you know, this border opening is it’s a staged reopening. It’s just one port. And it’s not going to be, there’s not going to be a flood of cattle that are going to be coming across from old Mexico. It, you know, it’s, you’ve got stringent protocols, and it’s going to be slow getting things going. But it, you know, eventually given us the ability to normalize our businesses, gives us some comfort.”
While the industry welcomes the reopening, protecting the U.S. herd from New World screwworm remains the top priority. LaRoe says USDA’s phased approach is designed to keep that risk low.
“The lion’s share of those cattle that are coming across from old Mexico, they’re feeder cattle. So they’re going to end up in a feed yard facility. There, you know, certain times of the year in the fall, then some of the lighter cattle, they may go out on wheat pastures and all of the above. But there’s, I mean, the reason why the border got opened is there’s a really high level of confidence that we’re, you can, it’s not a zero, complete zero risk, but there’s a lot of confidence that we have this situation under control. And if you just look at it from a geographic standpoint, you know, Douglas is in the state of Sonora and, you know, they’ve been screwworm-free since this deal started.”
Even as imports resume, LaRoe says producers shouldn’t expect a sudden shift in cattle supplies or beef prices. He says market fundamentals are still driving the industry.
“The supply of these cattle is not gonna be so drastic that it’s going to, it’s gonna have a major effect. As we all see the, all our futures contracts and all of those, they’re relatively sensitive to news, and you will see some knee-jerk reactions. But then the fundamentals kick back into play. And, you know, we, since we had the announcement, you know, we, the board was down pretty hard on Monday, and we’ve been in recovery mode since then. And so it, there’s times that fundamentals will usually kick back in and trump what the news is.”