Beefing Up Profits: Strategic Plays in US Livestock as Mexican Imports Reopen

The U.S. beef industry stands at a crossroads. After a six-month suspension due to New World Screwworm (NWS) fears, Mexico's phased reopening of cattle imports beginning July 7, 2025, promises to reshape supply chains, price dynamics, and trade balances. For investors, this pivot presents a rare opportunity to capitalize on resilience in livestock and agribusiness stocks. The key lies in understanding how regulatory safeguards, shifting supply-demand fundamentals, and pest control innovations will drive value creation.

The Phased Reopening: A Balancing Act of Risk and Reward

Mexico's gradual resumption of cattle imports—starting with low-risk ports like Douglas, Arizona, and expanding through August 2025—reflects a cautious approach to mitigating NWS risks. Each phase includes stringent protocols: cattle must originate from NWS-free regions (Sonora or Chihuahua) or undergo pre-export inspections, while equines face a mandatory seven-day quarantine. These measures aim to prevent a resurgence of the parasitic worm, which previously caused a 5–7% contraction in U.S. feedlot supplies.

The phased approach ensures that supply disruptions, which drove fed steer prices to $214.51/cwt in 2025 (a 15% surge year-over-year), will ease—but not collapse. Analysts project a 5% dip in 2026 U.S. beef production to 25.14 billion pounds, as feedlots adjust to tighter supplies. This delicate balance of moderation creates a sustained pricing floor for livestock, benefiting companies exposed to premium beef demand.

Investment Opportunities: Where to Stake Your Bet

1. Meat Processors: Tyson Foods (TSN) and Beyond

Processors like Tyson Foods are poised to profit from higher cattle prices and stabilized trade flows. With Mexico's reopening, U.S. feedlots can avoid overextending feeding periods, preventing the “weight inflation” that inflated 2025 feed costs.

Tyson's vertically integrated model—spanning feedlots, processing, and retail—gives it a structural advantage. Analysts predict EBITDA margins could expand by 2–3% as input costs stabilize and exports rebound. Meanwhile, competitors like JBS (which operates U.S. feedlots) and Cargill (via its beef division) may also see tailwinds, though their global exposure introduces volatility.

2. Feedlot Operators: Capitalizing on Supply Tightness

Feedlot managers such as Cimarron Cattle Company (privately held) or publicly traded agribusiness ETFs like the Invesco Agriculture ETF (彭博代码：PAGG) will benefit from prolonged scarcity. The USDA's June 2025 data shows 4% of cattle now stay in feedlots over 150 days—the highest since 2020—a trend that extends revenue streams for operators.

Investors should prioritize firms with access to low-cost feed (corn, soy) and geographic proximity to reopened ports. The reopening's staggered timeline also favors companies with diversified sourcing, as they can pivot to Mexican imports without overexposure to NWS risks.

3. Pest Control Tech: Corteva Agriscience (CTVA) Leading the Charge

The NWS crisis has underscored the need for advanced biosecurity. Companies like Corteva, which develops biotech solutions for pest eradication, are critical to maintaining trade stability. The USDA's $21 million investment in Mexico's sterile fly production—a cornerstone of NWS containment—directly aligns with Corteva's expertise in biological controls.

Corteva's stock has underperformed agribusiness peers amid macroeconomic headwinds, but its pipeline of NWS-specific solutions positions it for a rebound. A successful containment effort by 2026 could unlock bipartisan support for agro-tech spending, further boosting its valuation.

Risks and Considerations

• NWS Resurgence: If sterile fly programs falter, trade could snap back to suspension. Monitor monthly USDA-Mexico containment updates.
• Global Beef Competition: Oceania's export growth (Australia, New Zealand) may cap U.S. beef prices.
• Tariff Volatility: U.S. trade policies with China and Canada remain uncertain, though Mexico's reopening reduces dependency on distant markets.

Conclusion: A Bullish Case for Select Plays

The Mexican import reopening is not merely a supply-side fix—it's a catalyst for sector-wide efficiency gains and premium pricing. Investors should lean into Tyson Foods for its scale, agribusiness ETFs for diversification, and Corteva for its role in safeguarding trade. With U.S. beef prices projected to stay elevated through 2026 and pest control tech entering its “golden age,” this trifecta offers a robust hedge against agricultural volatility.

Recommendation: Overweight Tyson Foods (TSN) and Corteva (CTVA), with a tactical allocation to PAGG for feedlot exposure. Stay nimble on NWS containment data—success here means steady returns; failure could trigger a sector-wide reset.

The cattle are back in the chute. Time to feed your portfolio.