By Ilena Peng
Shares of meatpackers Tyson Foods Inc. and JBS NV surged after the U.S. said it would resume cattle shipments from Mexico, easing a domestic shortage that has led to higher costs for their animals.
The U.S. Department of Agriculture said late Friday that it would start a phased reopening of cattle imports from Mexico, starting with an Arizona port of entry beginning Aug. 24. Shares in JBS jumped as much as 9.8%, the most in 11 months, while Tyson gained 7.5%.
Mexico used to send over a million head of cattle to the U.S. each year, largely of younger animals who are then raised and processed in the US. That trade has been largely halted since late 2024 to prevent the spread of the New World screwworm parasite.
The closure has added further pressure on meatpackers already suffering from tight cattle supplies, leaving them paying up to procure scarce animals and supporting higher beef prices. The companies have been reporting steep losses in their beef businesses as a result and have closed plants.
The return of those volumes “in the coming months is a clear benefit for beef processors in North America,” Barclays analysts led by Benjamin Theurer wrote in a note. “Combined with recent beef plant closures and a higher supply of cattle, animal prices are likely to come down and present less immediate pressure on North American players.”
Beefpackers were operating at a roughly $160 loss per head of cattle processed as of Monday, improving about 36% from last Thursday before the announcement, according to a measure of margins from HedgersEdge.
The move is the Trump administration’s biggest yet to ease the domestic cattle shortage, which has led to record-high consumer beef costs. Agriculture Secretary Brooke Rollins has previously said there is “no doubt” that closing the ports led to higher beef prices.
To be sure, the main driver of elevated costs is still in play. The US cattle herd as of July 1 grew modestly year-over-year for the first time in eight years, a sign that ranchers may be retaining more animals for breeding. But the herd is still near a five-decade low, and rebuilding it will be a years-long process.
Also, the reopening of the border raises the risk of a further spread of screwworm, as the flow of cattle increases from Mexico, where there are still nearly 2,000 active cases. That’s especially as the U.S.’s longterm plan to eradicate the pest hinges upon a sterile fly production facility in Texas that won’t come online until late 2027.
The deadly parasite was detected nearly two months ago in Texas, marking the first case in U.S. livestock in about five decades. About 40 cases have been detected since, remaining relatively contained within southern Texas.
The state’s producers “are trusting USDA protocols and requirements” to protect the livestock industry, which remains its “highest priority,” the Texas Farm Bureau said in a statement.
“If the risk changes and a full port closure becomes necessary again, we will not hesitate to advocate for it,” the organization said.
The USDA had attempted a phased reopening of ports to Mexican livestock a year ago, but abandoned that plan shortly after.
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