Beef prices face pressure from cattle disease and trade talks

U.S. beef prices are facing fresh pressure as disease, drought and trade uncertainty hit a tightly linked North American cattle market. Agricultural economists Andrew Muhammad and Charles Martinez said the strain could further raise costs for shoppers already paying more for ground beef.

Muhammad, a University of Tennessee agricultural economics professor, and Martinez, an assistant professor of agricultural and resource economics, wrote in The Conversation that ground beef has risen by more than 20% since January 2025, citing CBS News. They said the price jump comes as the U.S. cattle herd has fallen to levels last seen in the 1950s, partly because of drought.

The economists said a screwworm outbreak in Mexico has added another supply shock. They wrote that the parasite has spread into the United States, with cattle cases found in south Texas and New Mexico, prompting Canada to ban live cattle from the affected region.

Trade deadline adds another risk

The price pressure is unfolding as the United States, Mexico and Canada approach a July 1, 2026, deadline tied to the United States-Mexico-Canada Agreement. Muhammad and Martinez said the three countries must decide whether to extend the pact for another 16 years or allow it to shift into annual reviews before its scheduled 2036 expiration.

President Donald Trump warned before U.S. and Mexican trade meetings on June 16 and 17 that Washington may decline to renew the agreement and could withdraw from it, according to the economists. They said Canada has so far stayed out of those talks, while U.S. and Mexican negotiators have taken up agriculture, including beef.

The current pact replaced NAFTA and took effect in 2020, after being negotiated during Trump’s first term. Muhammad and Martinez said beef was exempt from tariffs Trump placed on Canada and Mexico in 2025, keeping cattle and beef trade moving under the agreement’s rules.

A regional cattle system

The economists said cattle and beef production in the three countries operate as a highly integrated market. They said U.S. processors rely on feeder cattle from Mexico and slaughter-ready cattle from Canada, while U.S. producers also export beef products and fed cattle to Mexico.

Nearly all U.S. cattle imports come from Canada and Mexico, Muhammad and Martinez wrote, citing U.S. Department of Agriculture trade data. Those imports totaled about 2.1 million head in 2024 and were worth more than $3 billion, compared with about 32 million cattle slaughtered in the United States that year, according to USDA data cited by the economists.

They said the steady flow of animals helps stabilize U.S. supply and prices even though imports are a small share of total slaughter. That flow weakened in 2025, when live cattle imports fell by more than half, and deteriorated further in 2026 as young cattle imports from Mexico dropped by more than 80% because of the screwworm outbreak, according to data cited by the economists.

Beef trade also runs in both directions. Muhammad and Martinez said Mexico was the third-largest market for U.S. beef exports in 2025, at more than $1.3 billion, while Canada ranked fourth at $874 million. They said Canada and Mexico were the second- and third-largest beef suppliers to the United States, with combined exports worth more than $5 billion.

If the United States leaves the trade pact, Muhammad and Martinez said North American commerce would likely fall back to broader international trade rules. That could allow Canada and Mexico to impose tariffs and other barriers, including stricter inspections, more paperwork and quotas, they said.

The economists said such disruptions would be costly because cattle may cross borders more than once before reaching consumers. They said slower trade could mean fewer imported cattle, tighter U.S. beef supplies and higher prices for consumers.

This story draws on original reporting from Fortune.