U.S. Agriculture Secretary Brooke Rollins announced on Wednesday that the Department of Agriculture is preparing to reopen the Santa Teresa, New Mexico port of entry to livestock trade next week. This port is considered the largest for Mexican cattle shipments into the U.S. and its reopening follows months of closure due to concerns about the spread of the New World screwworm parasite. Rollins is expected to travel to New Mexico to inspect the port, with a target reopening date of September 24 if all preparations are in order.
This reopening is part of a phased approach, with cross-border livestock trade with Mexico having already resumed in late August at the Douglas, Arizona port. While the Douglas port has been processing approximately 800 to 900 head of cattle per day, the Santa Teresa port, despite its larger capacity, is expected to start slowly, potentially limiting initial flow to 750-800 head per day. This gradual approach allows officials to acclimate to new protocols and procedures that have been implemented to prevent the reintroduction of the screwworm.
The news had a significant impact on cattle futures. Chicago Mercantile Exchange (CME) cattle futures fell sharply on Wednesday, with December live cattle futures ending down 3.150 cents to 220.200 cents and October cattle settling at 218.450 cents. This decline in "deferred feeder cow futures" reflects market adjustments in anticipation of increased supply. Analysts also noted that cattle futures will be under further pressure ahead of Friday's USDA Cattle on Feed Report, which is expected to show 11.268 million cattle in U.S. feedlots as of September 1, a 1.7% increase from last year.
The reintroduction of Mexican cattle is expected to eventually provide relief to feedlots in the Southern Plains, which have faced regional pressure on cattle availability. Initially, heavier cattle are moving across the border and will go directly into feedlots for quicker finishing. While it may take several months to see appreciable numbers, the assurance of additional cattle supply helps businesses prepare and manage their operations, despite some market uncertainty about consumer demand for high-priced beef given current economic conditions.
