The markets are watching the screwworm situation happening in Mexico. Steps have been taken, but R-CALF warns an outbreak would be devastating for the U.S. cattle industry.
CEO Bill Bullard says he has been watching the situation since the beginning. He has been following a study by the Wildlife Conservation Society that followed outbreaks of the screwworm in other areas. He says their findings show that if the right action is not taken, it could quickly get out of hand.
“If the spread is allowed to advance unchecked, it is highly likely to follow the cattle trafficking route through Guatemala’s Maya biosphere reserve and into Mexico. And the article further states that once the screwworm crosses the border, controlling its spread within Mexican territory will be challenging. Past experiences have demonstrated the complexity and cost of eradicating these pest efforts in Mexico and the U.S. in 1991 exceeded 955 million in today’s currency. So what this information tells us is that we have a very serious threat of the introduction of a very serious foreign animal pest that has already spread to Mexico from South America.”
Right now, the U.S. still has an import ban on live cattle coming from Mexico. Economists warn this could cause more volatility moving forward.
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One trader said the products entering the U.S. are primarily grind and trim, noting that the volume and type of beef, on its own, should not cause a major disruption. However, he says fund traders are reacting heavily to headlines rather than market realities.
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