Could Screwworm Push Beef Prices Even Higher? | Cattle Market Alert

The biggest cattle threat in decades has now reached the United States.

New World screwworm has been confirmed in the U.S. at a time when the American cattle herd is already near multi-decade lows. In tonight’s Boots & Bushels, we break down what screwworm is, why cattle producers are paying close attention, and how it could impact cattle supplies, feeder cattle, beef prices, and the broader livestock market.

We also cover:
• Record cattle market volatility
• Weather threats across key production regions
• Wheat harvest concerns
• EPA biofuel mandates
• China demand questions
• Fertilizer and input cost pressures
• Upcoming USDA reports

This is Boots & Bushels, your daily look at the markets that feed America.

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Transcript

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The biggest cattle threat in decades is now tied directly to the price of beef. New World's Crew Worm has been confirmed in the United States. Cattle imports from Mexico are still disrupted. The U.S. herd is already historically tight, and that means this is no longer just an animal health story. This is a supply story. This is a beef price story. And this is now our producer margin story. This is Boots and Bushels, your daily look at the markets of Feed America. Most of you know this is my busy time of year, and because my podcast is a hobby and doesn't pay me, I still have to travel and work. Now, because this is my busy time, for the next few months I'll be posting every Monday instead of every day. Reporting from AP and Reuters says confirmed cases now include animals in Texas and New Mexico, with surveillance, quarantine work, and sterile flight response all moving quickly. And here's the part cattle producers are watching closely. This comes while U.S. cattle supplies are already tight. USDA's January cattle inventory put total U.S. cattle and calves at 86.2 million head, with beef cows down 1% from last year and a calf crop down 2%. So when screw worm shows up, the market is not reacting from a comfortable supply position. It is reacting from a tight one, and US has already had restrictions on live cattle movement from Mexico because of screw worm concerns. APHIS still lists cattle imports through southern border ports as suspended due to New World screw worm in Mexico. That matters because Mexican feeder cattle are a real part of the U.S. supply chain. When those animals are slowed, restricted, or shut off, feedlots lose flexibility. Packers lose future supply visibility, and consumers eventually see more pressure at the meat case. That doesn't mean screw worm alone caused beef prices to rise. Beef prices were already under pressure from years of drought, liquidation, high cost, fewer cows and fewer calves. But screw worm adds a new risk premium on top of an already tight cattle market. That's the connection. Not panic, not hype, supply risk, disease risk, and border risk. And a cattle herd that doesn't have much cushion left. USDA's economic research service already lowered its 2026 beef production forecast and said cattle prices were raised because supplies remain limited. Now adds screw worm. That's why the story matters for beef prices. If the outbreak stays contained, the market may calm down. But if cases spread or if quarantines expand, or if Mexican cattle flow stayed restricted longer, then this becomes another reason beef stays expensive. And for producers, this is where the story gets complicated. Higher cattle prices sound good if you're selling calves. But if you're buying feeders, running a feedlot, managing death loss risk, or dealing with movement restrictions, this is not simple. Record prices can help one side of the industry while squeezing another. And right now screw worm is adding uncertainty to every part of that chain. The second story is cattle market itself. Live cattle and feeder cattle have been trading at historically strong levels because the supply story has not loosened up. There are fewer cows, fewer calves, beef production is expected to tighten, and consumers are still paying up for beef. That's the foundation underneath this market. Screw worm didn't create the tight cattle cycle, it landed on top of it. That's why traders are watching this so closely. A disease scare in a well supplied market is one thing. A disease scare in the smallest cattle herd in decades is something very different. The third story is weather and planting. The market is watching wet areas across parts of the corn belt, the delta, and the eastern production belt. Rain can help crop early, but too much rain creates a different problem. It slows field work, delays spraying, it raises disease pressure, it can force replant decisions, and it can start chipping away at yield potential before the market fully prices it in. USDA crop progress showed corn planting was largely advanced by early June, but regional delays and wet field issues remain part of the story. That's the key. The national number can look decent while individual producers are still fighting mud, drowned out spots, delayed beans, late herbicide passes, or wheat harvest problems. The fourth story is wheat. Winter wheat harvest is moving, but the quality story is not settled yet. Rain in parts of wheat country can help fill grain earlier in the season, but when harvest gets close, repeated moisture can raise concerns over disease, test weight, sprouting, and harvest delays. For wheat producers, this is not just about bushels, it's about quality. A crop can be there on paper and still lose value if test weights fall or quality discounts show up. That's what traders will be watching as more combines roll. Our first story is biofuels. The EPA finalized renewable fuel volumes for 2026 and 2027, with total renewable fuel volumes set at 26.81 billion gallons for 2026 and 27.02 billion gallons for 2027, according to Farm Bureau's summary of the rule. That matters for corn and it matters for soybean oil, and it matters for long-term demand. EPA said the rule supports American corn and soybean oil used in biofuel production. For producers, this is one of the few demand side stories that gives the grain market something firmer to lean on. Weather can move prices fast, exports can disappoint. But biofuel policy creates a demand floor, traders have to keep in the equation. The sixth story is China. Corn soybean markets are still watching export demand. The crop can look fine, the balance sheet can look manageable, but if China is quiet, grain markets struggle to build a strong demand story. That's especially true for soybeans. Weather can create rallies, USDA reports can move acres, but China demand is still one of the biggest swing factors in whether a rally has legs. Right now, traders are not just asking how big the crop might be, they're asking who's going to buy it. The seven stories fertilizer and input cost. This is not always the flashiest headline, but it matters to margins. Fuel, fertilizer, chemical, repairs, interest, land rent. Those costs don't disappear just because grain prices soften. Any renewed volatility in nitrogen, phosphate, or global fertilizer trade becomes another squeeze point. For producers, the danger is not just one input. It's the stack, lower crop prices, higher cattle feed cost, weather risk, borrowing cost, and fertilizer uncertainty all hitting at the same time. That's what makes margins feel tighter than the board alone would suggest. Our eighth story is USDA report positioning. Markets are now moving toward the next major acreage and supply demand updates. That matters because June is when traders start arguing over planted acres, prevented planting, early yield potential, crop conditions, and whether USDA needs to adjust the balance sheet. This is where weather and paperwork meet. A few million acres shifting between corn, soybeans, wheat, or prevent plant can change the tone quickly. And with weather problems scattered across different regions, the market is going to be sensitive to any sign that the acreage mix is not what traders expected. So here's the big picture tonight. Agriculture isn't dealing with one story. It's dealing with several pressure points at once. Screwworm is the headline because it threatens livestock health, cattle movement, beef supply, and consumer prices. The cattle market is already tight because the herd is small and beef production is limited. Weather's creating regional crop concerns. Wheat harvest is moving into quality risk window. Biofuels are offering some demand support. China remains the big export question. Input costs are still squeezing margins, and USDA reports are getting more important as traders try to figure out how much risk is actually in the crop. But the lead remains cattle. Because screw worm changes the conversation. This is no longer just a story about high beef prices. It's now a story about whether supply chain can stay protected while the cattle herd is already stretched thin. And until the market knows this outbreak is contained, cattle and beef are going to carry more risk than they did two weeks ago. Weather's becoming a market story again. The biggest threat over the next seven days is severe weather across the plains and upper Midwest, where repeated rounds of storms could bring hell, damaging wind, tornadoes, and localized flooding. Iowa, Minnesota, Nebraska, and the Dakotas will be areas to watch closely. At the same time, a major heat wave is expected to develop across the eastern United States later this week. For producers, the biggest risk remains storm damage, excess moisture, and harvest delays in wheat country. Corn, soybeans, wheat, cattle, hog, and crude oil were all lower than a week ago. Grain markets have been pressured by favorable weather forecasts and fund liquidation, while cattle markets have pulled back from record highs as traders react to screw worm headlines and profit taking. Crude oil also fell sharply over the past week, removing some inflation pressure from the commodity sector. Corn has been one of the biggest losers, dropping roughly 30 cents in just a week as traders bet on improving crop conditions across much of the corn belt. Soybeans lost around 40 cents, wheat fell roughly 16 cents, and feeder cattle gave back more than 10 cents after setting record highs earlier this spring. Corn futures were trading near 418 per bushel. Soybean futures were trading near 1116. Live cattle closed near 236.33 per hundredweight, down 533. Feeder cattle closed near 350 25, down 365. Lean hogs closed near 9610, down $1.13. Crude oil closed near $91.30 per barrel, essentially unchanged on the day. Green markets remained under pressure as traders continued to focus on generally favorable crop weather, while cattle futures pulled back sharply despite ongoing concerns around the screw worm outbreak. Feeder cattle, live cattle, and lean hogs all finished lower, while crude oil was little changed. That's boots and bushels. I'll be back again Monday.