As the summer grilling season gets underway, Americans are finding beef increasingly out of reach due to soaring prices. The cost of beef has been on the rise since early 2026, and recent developments threaten to push prices even higher. A screwworm outbreak in Mexico has spread to the United States, exacerbating existing challenges such as drought, which have already reduced cattle herds to levels not seen since the 1950s.
Adding to the turmoil, trade negotiations between the U.S. and Mexico, which began on June 16-17, 2026, have introduced a new layer of uncertainty. President Donald Trump has hinted that the U.S. might not renew the United States-Mexico-Canada Agreement (USMCA)potentially withdrawing from the deal altogether. This uncertainty comes at a critical time for the beef industry, which is deeply integrated across the three countries.
The Interconnected North American Beef Market
The North American beef market is a highly integrated system, shaped by decades of trade agreements. The North American Free Trade Agreement (NAFTA)established in 1994, laid the groundwork for seamless trade between the U.S., Canada, and Mexico. In 2026, NAFTA was replaced by the USMCA, which introduced new provisions, including a 16-year sunset clause and mandatory reviews every six years.
Beef, along with other agricultural products, was exempted from the tariffs that Trump imposed on trading partners in 2026. The USMCA’s provisions have been crucial for maintaining a steady flow of cattle and beef products across borders. The U.S. imports young “feeder” cattle from Mexico and mature “fed” cattle from Canada, which are then processed in U.S. packing plants. Conversely, the U.S. exports beef products and fed cattle to Mexico to meet consumer demand.
This integration is vital for stabilizing supplies and managing prices. In 2026, the U.S. imported around 2.1 million head of cattle from Mexico and Canada, valued at more than US$3 billion. Although this number is small compared to the total 32 million head slaughtered in the U.S. that year, the steady flow of imports helps maintain a balanced market.
The Impact of the Screwworm Outbreak and Trade Talks
The screwworm outbreak has had a devastating impact on cattle herds. In 2026, live cattle imports plummeted by more than 50%, and the situation worsened in 2026 as young cattle imports from Mexico collapsed by more than 80%. The parasite has now been detected in cattle in south Texas and New Mexico, leading Canada to impose bans on live cattle from these regions.
The current trade talks go beyond beef to encompass broader agricultural issues, including rules of origin, labor and environmental standards, and digital trade. However, beef remains a key sector in these negotiations. In 2026, Mexico was the third-largest market for U.S. beef exports, exceeding $1.3 billion, while Canada was the fourth-largest market at $874 million. On the flip side, Canada and Mexico ranked second and third among countries exporting beef to the U.S., with combined exports exceeding $5 billion.
The Potential Consequences of Exiting the USMCA
If the U.S. exits the USMCA, the consequences could be far-reaching. North American trade would likely revert to more basic international rules, allowing Mexico and Canada to impose their own tariffs. This could raise costs for producers, processors, and ultimately, consumers. Additionally, nontariff barriers such as stricter inspections, more paperwork, and potential quotas on U.S. exports could slow down trade.
Given that cattle often cross borders multiple times during production, even small delays can create significant disruptions. The result could be less efficient supply chains, fewer imported cattle, tighter U.S. supply, and higher prices. Some U.S. ranchers are already bracing for a worst-case scenario, drawing parallels to the challenges faced by soybean farmers when a key export market disappeared.
“We can’t lose demand for our products,” one rancher remarked. “Look what happened with soybeans last year when China quit buying.”
As the July 1, 2026 deadline for extending the USMCA approaches, the stakes are high. The outcome of these trade talks will not only shape the future of the beef industry but also have significant implications for consumers across North America.
