Mexico Ban Tightens U.S. Supply Just as Summer Demand Picks Up

This wasn’t on most traders’ bingo cards.

In early May, the USDA shut the gates on live cattle coming in from Mexico. The culprit? New World Screwworm, a nasty parasite spotted in the south. It’s a health issue, but now it’s turning into a supply story too.

And with cattle numbers already tight in the U.S., this could become a bigger deal as summer wears on.

The Feeder Supply Just Got Thinner

Mexico typically ships close to a million head north each year, mostly lightweight feeders heading for U.S. lots. Now, with the border closed, that flow is frozen. No timeline for reopening yet, and USDA forecasts are already adjusting.

The May WASDE pulled back on U.S. beef production for the back half of 2025. The reason? Fewer slaughter-ready steers and heifers, thanks to the missing Mexican supply.

This comes as the U.S. herd sits at its lowest level in a decade. Droughts, high feed costs, and producer fatigue have kept expansion in check. So when a key source of feeder calves suddenly disappears, even temporarily, it doesn’t take much imagination to see how the math changes.

Prices Firming Into Familiar Territory

Live cattle futures didn’t immediately react, but that’s changed. By mid-May, front-month contracts were ticking higher. USDA even bumped its price forecast based on “tight fed cattle supplies.” There’s some momentum now, but it’s been a slow roll.

That lines up with what we normally see this time of year. Prices for live cattle often strengthen from spring into early summer. Grilling season, more demand, less cold storage, the usual reasons. What’s different this year is the added squeeze in supply.

Watching the Feeders, Carefully

This isn’t a moonshot rally, and there’s still caution in the market. Beef demand is good, but the economy’s not exactly humming. There’s also some producer hesitancy, and rightfully so, after a few years of whipsaw moves.

Still, if this border issue drags on, feeder cattle in particular could stay well bid. Some buyers are already adjusting sourcing plans, trying to lock in domestic supply before it gets more competitive.

This Isn’t Just a Weather Story Anymore

We’ve had droughts, feed volatility, and even packer bottlenecks before. But losing Mexico as a source of cattle? That’s different. The border has long been a quiet pressure valve. Now that it’s closed, the entire flow gets disrupted.

It doesn’t mean cattle have to spike, but it adds a real support layer under this market. One that didn’t exist a few months ago.

Keep an eye on how long this ban lasts. Until then, pricing looks likely to stay firm. And for those who trade with a time decay edge, this could be one of those quiet opportunities that sneaks up while the rest of the market looks the other way.

Mexico Ban Tightens U.S. Supply Just as Summer Demand Picks Up

This wasn’t on most traders’ bingo cards.

In early May, the USDA shut the gates on live cattle coming in from Mexico. The culprit? New World Screwworm, a nasty parasite spotted in the south. It’s a health issue, but now it’s turning into a supply story too.

And with cattle numbers already tight in the U.S., this could become a bigger deal as summer wears on.

The Feeder Supply Just Got Thinner

Mexico typically ships close to a million head north each year, mostly lightweight feeders heading for U.S. lots. Now, with the border closed, that flow is frozen. No timeline for reopening yet, and USDA forecasts are already adjusting.

The May WASDE pulled back on U.S. beef production for the back half of 2025. The reason? Fewer slaughter-ready steers and heifers, thanks to the missing Mexican supply.

This comes as the U.S. herd sits at its lowest level in a decade. Droughts, high feed costs, and producer fatigue have kept expansion in check. So when a key source of feeder calves suddenly disappears, even temporarily, it doesn’t take much imagination to see how the math changes.

Prices Firming Into Familiar Territory

Live cattle futures didn’t immediately react, but that’s changed. By mid-May, front-month contracts were ticking higher. USDA even bumped its price forecast based on “tight fed cattle supplies.” There’s some momentum now, but it’s been a slow roll.

That lines up with what we normally see this time of year. Prices for live cattle often strengthen from spring into early summer. Grilling season, more demand, less cold storage, the usual reasons. What’s different this year is the added squeeze in supply.

Watching the Feeders, Carefully

This isn’t a moonshot rally, and there’s still caution in the market. Beef demand is good, but the economy’s not exactly humming. There’s also some producer hesitancy, and rightfully so, after a few years of whipsaw moves.

Still, if this border issue drags on, feeder cattle in particular could stay well bid. Some buyers are already adjusting sourcing plans, trying to lock in domestic supply before it gets more competitive.

This Isn’t Just a Weather Story Anymore

We’ve had droughts, feed volatility, and even packer bottlenecks before. But losing Mexico as a source of cattle? That’s different. The border has long been a quiet pressure valve. Now that it’s closed, the entire flow gets disrupted.

It doesn’t mean cattle have to spike, but it adds a real support layer under this market. One that didn’t exist a few months ago.

Keep an eye on how long this ban lasts. Until then, pricing looks likely to stay firm. And for those who trade with a time decay edge, this could be one of those quiet opportunities that sneaks up while the rest of the market looks the other way.