By Tom Polansek and Leah Douglas
CHICAGO/WASHINGTON, June 4 (Reuters) – U.S. feeder cattle futures surged on Thursday as ranchers and traders were on high alert for more potential cases of a devastating parasitic fly that eats warm-blooded animals alive.
U.S. Agriculture Secretary Brooke Rollins told reporters there were no further detections of New World screwworm in the area around a case in La Pryor, Texas, that the federal government confirmed late on Wednesday. The case was a blow to U.S. cattle ranchers who have been bracing for a domestic screwworm outbreak as the pest advanced north through Mexico over the past year.
“We’ve had a couple (reports) come through as possibilities,” Rollins said on a press call. “Certainly none that looked like the one we saw yesterday from La Pryor, but we are running that down.”
Rollins said earlier the U.S. Department of Agriculture believed it could contain the case, the first in Texas since 1966. Wider infestations could further shrink the U.S. cattle herd, which is the smallest in 75 years.
Screwworms are parasitic flies whose females lay eggs in open wounds and mucous membranes on any warm-blooded animal. Once the eggs hatch, hundreds of screwworm larvae use their sharp mouths to burrow through living flesh, eventually killing their host if left untreated.
“The New World screwworm sounds like something from a horror movie, but it’s real,” said Nate Sheets, a Republican nominee for Texas agriculture commissioner. “It is an agricultural emergency.”
VOLATILE CATTLE PRICES
Feeder cattle futures initially dropped on the Chicago Mercantile Exchange as traders worried the infestation could reduce consumers’ appetite for beef. Futures quickly turned higher, rallying by more than 3%.
The detection threatens Texas’ livestock industry, which could face up to $1.8 billion in estimated economic losses if screwworm spreads, experts said.
“We’re going to need to see how fast it spreads and how the consumer reacts,” said Matt Wiegand, commodity broker for FuturesOne. “Until we see a big demand impact from the consumer side, (cattle) numbers are still tight.”
U.S. cattle supplies dwindled after a persistent drought hiked feeding costs and forced ranchers to slash their herds. The decline has left meatpackers, such as JBS, Cargill and Tyson Foods, struggling to find enough animals to process in their beef plants.
The Meat Institute, which represents processors, urged USDA to consider allowing “low-risk” shipments of livestock for slaughter after the agency said it had frozen animal movement in an area around the case. Such shipments could include animals moving directly to slaughter from a farm that is not infested, the institute said.
USDA spent millions of dollars attempting to keep out the pest and has blocked imports of Mexican livestock for more than a year. U.S. ports of entry will remain closed to Mexican livestock until further notice, Rollins said. The infestation signals screwworm flies arrived in the U.S. anyway and will expand in wildlife populations, said Lee Haines, an associate research professor of biological sciences at the University of Notre Dame in Indiana.
“The burden falls hardest on farmers who must monitor animals scattered across vast open rangeland, often going unobserved for days at a time,” Haines said.
(Reporting by Tom PolansekEditing by Rod Nickel)
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