U.S. Beef Prices Surge as Screwworm Outbreak and Trade Uncertainty Threaten Supply

The cost of beef in the United States has surged by over 20% since January 2025, driven by a combination of a livestock disease outbreak and looming trade disruptions, according to the U.S. Department of Agriculture (USDA). The crisis is intensifying as a screwworm infestation in Mexico spreads to the U.S., while negotiations over the 2020 United States–Mexico–Canada Agreement (USMCA) enter a critical phase.

Why Are U.S. Beef Prices Rising?

The immediate cause of the price spike is a parasitic screwworm outbreak that has decimated cattle herds in Mexico and now threatens the U.S. The USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed cases in Texas and New Mexico in June 2026, prompting Canada to ban live cattle imports from those regions. Mexico’s cattle population has dropped to levels not seen since the 1950s, exacerbated by prolonged drought, the agency said.

“The combination of disease and drought has created a perfect storm for the beef sector,” said Dr. Laura Martinez, a livestock economist at the University of California, Davis. “Imports from Mexico, which account for nearly 60% of U.S. cattle imports, have plummeted.”

How Is the USMCA Trade Deal Affecting Beef Supplies?

The USMCA, which replaced NAFTA in 2020, has long tied the U.S., Mexico, and Canada into a tightly integrated beef market. The agreement’s 16-year sunset clause requires a decision by July 1, 2026, on whether to extend the deal. President Donald Trump’s threat to withdraw from the pact has added uncertainty, with U.S. and Mexican negotiators set to meet in June 2026 to address agricultural trade.

“The USMCA has stabilized cross-border cattle flows for decades,” said Tom Johnson, a trade analyst at the Peterson Institute for International Economics. “If the deal collapses, the U.S. could face a 50% drop in cattle imports, driving prices even higher.”

In 2024, the U.S. imported 2.1 million head of cattle from Mexico and Canada, valued at over $3 billion. Imports from Mexico alone fell by 80% in 2026 due to the screwworm outbreak, according to USDA data.

What Happens Next in Trade Negotiations?

U.S. trade negotiators are focusing on agriculture, with beef as a central issue. The talks come as the Trump administration pushes for a more “transactional” approach to trade, prioritizing bilateral deals over multilateral frameworks. Canada, however, has opted out of direct negotiations, leaving U.S. and Mexican officials to address the issue alone.

“The U.S. is in a vulnerable position,” said Sarah Lin, a policy analyst at the Heritage Foundation. “Without the USMCA, Mexico and Canada could impose tariffs or non-tariff barriers, disrupting supply chains and raising costs for consumers.”

Trade experts warn that reverting to World Trade Organization (WTO) rules would allow Mexico and Canada to impose their own tariffs, potentially increasing beef prices by 15–20%. The USDA has already noted a 20% rise in ground beef prices since 2025, with further increases expected if the deal collapses.

How Do Consumers Stand to Lose?

The U.S. cattle herd reached a 60-year low in 2026, according to the USDA, as drought and disease reduced the number of animals available for slaughter. This has created a ripple effect across the supply chain, with packing plants struggling to meet demand and processors passing costs to retailers.

“We’re seeing a direct link between trade uncertainty and inflation,” said James Carter, a consumer economist at the Bureau of Economic Analysis. “If the USMCA isn’t extended, the average American could pay $5–$10 more per month on beef alone.”

Ranchers are also bracing for the worst. “We’ve seen what happens when a key market disappears,” said Mark Thompson, a Nebraska cattle farmer. “Last year, soybean prices collapsed when China stopped buying. We don’t want the same fate for beef.”

What’s the Path Forward?

With the July 1, 2026, deadline for USMCA renewal approaching, the stakes for the beef industry are high. The USDA has urged lawmakers to prioritize stable trade relations, while farm groups continue to lobby for the agreement’s continuation.

“The USMCA isn’t just about tariffs—it’s about the lifeblood of American agriculture,” said Rebecca Lee, a spokesperson for the National Cattlemen’s Beef Association. “If we lose this deal, we lose our competitive edge.”