The cattle market hit records numbers on May 12, with August feeder cattle futures reaching highs of $306.85.
Not to be attributed to just one thing, this $6.50 surge is likely due to tandem effects of both the lowering of tariffs with China, as well as the USDA’s decision to close the southern border again because of concerns with New World Screwworm.
“Markets are way up today if you looked at the futures, but it’s hard to sort out how much of that is due to Mexico,” says Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist. “Probably the bigger part of it is the stock market and all the tariff related stuff that’s going on.”
What’s ‘Normal’ For Animal Imports v. Today?
So far in 2025, a total of 197,844 head of feeder cattle have been imported since the border reopened, down 60% year over year for the year-to-date. In 2024, a total of 1.25 million head of feeder cattle were imported, with none in the last five weeks of the year, says Peel in his weekly market report.
“On an annual basis, the number of feeder cattle we bring in from Mexico is equivalent to 3.5% of our calf crop,” Peel adds. “It’s not insignificant, but it’s not a huge, huge factor either.”
Peel says reducing the supply of cattle coming in has fairly big effects on cattle businesses who rely specifically on that source of cattle, much of which would be in the Southern Plains region.
“Folks who historically utilize those cattle, obviously are directly impacted, and they have to try to find other sources of cattle, but, again, the overall numbers are not big enough to be a major market mover,” he says.
Additionally, Peel says the majority of cattle coming into the U.S. from Mexico were spayed heifers due to drought liquidation.
John Hepton, Wilder Cattle Feeders in Idaho, says he has fed Mexican cattle in the past, but doesn’t have any in yards currently, so it’s not a supply issue for him, but he pays close attention to the futures.
“Feedlots aren’t getting those cattle from Mexico and they’re pulling feeder cattle farther away,” Hepton says. “It’s definitely having an impact on the price of feeders and the availability of feeders, which is going to have an impact on the amount of cattle that are placed on feed that end up at the processors. We’re already short as is.”
As a feedlot owner, risk management has always been a part of his business model, which helps as the markets climb.
“It looked like we were kind of hitting close to a high when the feeder futures got to three bucks,” he says. “We added some hedges and risk protection at that level then you wake up Monday morning and the market’s up four bucks, and you’re making margin calls because of an outside influence in the market. It’s just the way it is.”
Markets Shape Herd Size Dynamics
Hepton says he has heard from people in the industry that herd expansion is starting in places, but he’s not sure to what degree, which would put less heifers on feed.
“If you’re a cow-calf producer, it helps you price wise,” Hepton says. “We were already the highest prices in the history of the world and now it’s higher again. Producers will continue to get more for their calf crop coming up. Whether that changes their decision to save more heifers or not has always been more about forage availability than anything.”
He says time will tell if producers keep saving heifers as they will be giving up a big check.
“I think that’s part of the reason why there hasn’t been a lot of expansion yet; they are worth so much that it’s hard to hard to not sell them.”
Hepton points out other factors work together to determine what the industry does. He says there will be signals to continue to produce cattle.
“If we don’t get in a drought, the cow herd will eventually increase,” he says. “Also, if you get to a price point where demand backs off, first it’ll back off on the meat sales, then the fed cattle price, then feeder cattle price, and finally at the cow-calf level. In time, capitalism always works. If people can’t afford beef, that’s going to be the real driver of a change in this market, I think.”
Border Closure Aims to Limit Exposure To Pest
While the change in markets has gained industry attention, Peels says the USDA decision to close the southern border is very much a veterinary issue to make sure the New World Screwworm stays out of the U.S.
“The pest moves with cattle, potentially, if they have it,” he says. “And of course, flies can just move, and they’re going to move in conjunction with cattle. Stopping the movement of the cattle is the first step in containing it. Then you use the sterile fly program to eradicate it and start hopefully pushing it back farther south.”
Your next read: U.S. Suspends Mexican Cattle, Horse and Bison Imports Over Screwworm Pest
