Texas Standard: Remind us why the New World screwworm has so many ranchers and others in the beef industry concerned.
Well, it is a devastating pest if it’s endemic in a country or among a cattle population or wildlife population.
And we have seen now for the last, oh, 15, 18 months or so that the New World screwworm has come up out of the Darien Gap in Central America and migrated again north through Central America and into southern parts of Mexico and spread north with the cattle trade into central and northern part of Mexico.
And that raises an alarm among both Mexican cattle producers and cattle producers in the U.S. that this pest might reinvade after a 50- or 60-year absence and cause a problem with regard to the health and safety of our cattle herds.
Well, explain just how integrated the U.S. and Mexico are when it comes to cattle.
A lot of the cattle feedlots in the southwest of the U.S. — New Mexico, Arizona, even over into California, Texas — have relied for 60 or 70 years on a supply of feeder cattle out of Mexico… A lot that has been to fill seasonal supplies when native cattle aren’t available.
So, they can dig into that Mexican feeder channel and fill those supplies, to fill those feedlots, to raise the winter wheat pastures and actually on our soil, add value to those cattle and they go then into our beef supply chain.
Yeah, so real heavy dependence on that. And I understand one feedlot in Texas is closed because cattle from Mexico can’t cross the border. What happened?
Well, Lubbock feeders did announce their closure and they’ll feed their existing inventory, which isn’t going to last very long. And they said they’re going to close.
And one of the reasons that we assume, and it hasn’t exactly been stated by the owners and managers of Lubbock feeders, but the figures are pointing towards a the supply from Mexico that’s exacerbated, obviously by a shortage of feeder cattle throughout the U.S., of the native cattle.
We have the lowest inventory of beef cows in the U.S. — the lowest in something like 60 or 70 years — and we just don’t have as many feeder cattle around, period, coming out of a U.S. cow/calf operation. Couple that with the closure of the Mexican border and the feedlots across, especially the southwest, are short of cattle. And to keep a feedlot open, you have to have cows.
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Well, how worried are the folks you spoke to about additional feedlots closing?
Yeah, I’ve talked to traders and feedlot owners in the Southwest, actually from California to Texas and every parts in between, and they’re concerned that the lack of cattle, feeder cattle in general, again exacerbated by the closure of the border with Mexico, they can’t find enough cattle to keep their feed yards open. Some are running at 60% capacity. 80% to 90% is normal.
I mean, really, they want to be full, but that’s not practical year-round. But at 60% of capacity, these guys just can’t make it because they have to have cattle in the pipeline to feed them those fed cattle to the packing plants. And the cattle are just not there and it’s tough being profitable.
So is there an argument to be made that perhaps closing the border to all cattle from Mexico is overkill? I mean, there are certain border states in Mexico, like Sonora and Chihuahua, where we don’t have the New World screwworm detected.
Correct. And the people I’m talking with, the feeders and the cattle traders, are saying that there’s really not a whole lot of science-based reasons to keep that border closed because of the screwworm threat.
That Sonora and Chihuahua are isolated and there are barrier zones between areas that have screwworm or have active cases of screwworm — in some cases up to 700 miles away — that are not affecting the population, the cattle populations in Sonora and Chihuahua. And they believe that because there’s little or no threat of the screwworms infecting their cattle and thus crossing the border, that the border should be open and it’s more political than it is scientific.
Well, in the little time we have left, what does this mean for ranchers and others in Mexico in the beef industry?
Well, it’s obvious what’s happening in Mexico is that they’re ramping up the cattle-feeding industry in Mexico. We have reports that tremendous amounts of U.S. corn are being shipped across the border south to fill these feedlots with corn for feed.
And we also have reports with the existing feedlots in Mexico are bursting up the seams with cattle and they’re building new feedlots as we go.
The other part of that is that the meatpacking industry in Mexico is wrapping up and I’ve explored this with some of my reports in Beef Magazine, that they’re building more processing plants and in effect what’s happening then is the Mexicans will feed these cattle, they will process them, they’ll put the meat in boxes or swinging carcasses and that meat will come north across the border.
So what’s happening then is the Mexicans are able to add value to those cattle and at the same time when U.S. feeders and packers sorely need more cattle to fill their pipelines.
