Screwworm worries and worse

The Mexican state borders Texas, and reported eight active NWS cases on the 15th. A total of 11 confirmed cases have been reported in Tamaulipas since December 30th. There was even a report (that turned out to be erroneous) on Friday that NWS was discovered in the U.S. state of New Mexico.

As cattle markets reacted in lock-step with the news, both fed cattle and feeder cattle futures fell on the bearish media reports.

“When you’re seeing this many cases, this fast, it tells you there may be established (as opposed to transient) screwworm fly populations in Tamaulipas,” said Texas agriculture commissioner Sid Miller in a statement. “Texas producers need to stay on high alert along our border.”

Beyond the futures

Underlying the immediate market impacts, there’s speculation that long-term structural changes in Mexico’s beef industry are afoot. The country faces the immediate task of absorbing the million head or so of feeder calves that would have otherwise entered the U.S. over the last year—and into 2026.

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What was once seen as a short-term ban on feeder cattle exports is expected to drive long-term growth in domestic beef processing. Mexican producers are already looking to add value to their own feeder cattle and export beef instead of cattle.

Correspondingly, USDA’s Foreign Agricultural Service is forecasting Mexico’s beef production to rise 6% in 2026. Increased domestic demand and higher expected exports are also predicted.

The meat processing sector in Mexico is experiencing significant growth in large-scale production facilities aimed at meeting rising demand, according to IMARC, a global consulting group that specializes in modeling food production trends.

“The Mexican market is poised to see improvements in the efficiency and quality of meat products,” added IMARC. “This expansion indicates Mexico is growing its role as a key player in the meat processing, further bolstering its competitive position in the global market.”

Francisco Jaraleño, president of the Mexican Meat Council, stated that its 114 members have committed to annual investments of nearly $1 billion (USD) into new and expanded processing plants. They’re also investing in processing efficiency, regulatory compliance measures, development of new products, and worker training.

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With the increased number of feeder cattle to dispose of, the Mexico beef industry has another supply situation beating on its southern door.

From late 2025 into early 2026, the smuggling of cattle from Central America into Mexico has not yet slowed, according to sources inside Mexico. And the illicit cattle trade remains a major link in the spread of the NWS.

A perfect trifecta

Point to the drug cartels that are heavily involved in what has become known as “narco-ranching” and it’s easy to see why few in Mexico want to dive very deep when talking cows.

As part of an InSight Crime investigation , it’s estimated that as many as 800,000 head of cattle have been trafficked annually into the country from Guatemala in recent years.

InSight Crime is a think tank and media outlet that’s willing to bore into organized crime in Latin America. Over the past year, it’s provided some of the most credible information available about the cow trade emanating out of Mexico and Central America.

“Criminal organizations smuggle cattle north from Guatemala, Honduras, and Nicaragua into Mexico,” reported InSight. “Many arrive emaciated, in poor health, and lacking the proper identification (ear tags) or health documentation.”

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While smuggled cattle are “laundered” into Mexico’s cattle supply chain, they also serve as a shield for cocaine traffic.

InSight said the cattle become “legal” immigrants when they get an electronic ear tag. The black market for these ear tags is the third prong in a lucrative business.

Between January and June 2025, InSight reported just over 500,000 non-compliant electronic ear tags were detected in cows coming into Chiapas, Mexico from Guatemala. An official ear tag costs around $2.50 USD—black market ear tags can be sold for as high as $50 by corrupt government officials.

Ranchers interviewed in Veracruz and Chiapas told InSight that cattle smuggled from Guatemala are sold for an average of about $400 per head.

But as those cattle move north and gain “legitimate” identity—as well as weight and condition—under current cattle and beef prices, their value begins to soar far past the price they brought at the border.

The question, though, is just how long this flow of illicit cattle can continue. Cattle industry analysts in the U.S., Mexico and Canada are doing the math and wonder if the flood of cattle is about to become a trickle.

Meanwhile the question posed by InSight Crime is if the Mexican government has the political will to address the problems associated with the illicit cattle trade.

“But its (Mexico’s) immediate response capacity is limited,” said Antonio Ortiz-Mena, a professor at Georgetown University who specializes in international political economy. “This issue requires close coordination with security, enforcement, and international cooperation agencies.”

One proposed solution, Ortiz-Mena noted, is to modernize Mexico’s livestock traceability system by incorporating technologies that are harder to counterfeit, including electronic chips or GPS devices that track cattle movements in real time.