Ground beef prices have climbed more than 20% since January, as a screwworm outbreak spreading from Mexico tightens cattle supplies and the July 1 deadline for renewing the USMCA trade deal adds a layer of uncertainty for ranchers and consumers. The jump in costs comes at a time when betting markets see an 80% probability that the Federal Reserve will hold off on any rate cuts — meaning no relief from borrowing costs for producers or shoppers.
Why ground beef got more expensive
Since the start of 2025, the price of ground beef at grocery stores has risen by over a fifth. The main reason: fewer cattle. A screwworm outbreak, which began in Mexico and is now moving north into the United States, has forced ranchers to cull infected animals and limit movement of herds. Screwworm larvae burrow into living tissue, and an infested animal often dies if untreated. The outbreak has reduced the number of cattle available for slaughter, pushing up wholesale prices that get passed to consumers.
On top of that, cattle supplies were already tight before the outbreak. Drought in parts of the Great Plains had cut into grazing land, and higher feed costs had prompted some ranchers to reduce herd sizes. The screwworm problem hit just as the industry was starting to rebuild.
The border threat and containment efforts
U.S. agriculture officials have stepped up inspections at ports of entry from Mexico, where the screwworm has been spreading for months. The pest, which can also infect pets and wildlife, has been detected in several southern Texas counties. Quarantine zones have been set up, and livestock movement within those areas is restricted. Ranchers are being told to check animals daily for signs of infestation — swollen wounds, visible larvae, or unusual behavior.
The USDA has not yet released a full estimate of economic losses, but the combination of culled animals and restricted trade is already showing up in the price data. Mexico is the largest source of U.S. beef imports, and any disruption there ripples through the entire market.
A trade deadline that could change everything
July 1, 2025, is the date the United States-Mexico-Canada Agreement must be renewed or it expires. Renegotiations have been slow, with disagreements over rules of origin, digital trade, and agricultural standards. If the deal lapses, tariffs could snap back on a range of goods, including beef. That would raise costs further for U.S. importers of Mexican cattle and potentially block Canadian feeder cattle from entering the U.S. market — another source of supply.
Trade analysts say the odds of a last-minute deal are about even, but the clock is ticking. The White House has not signaled whether it will seek a short extension or push for major changes. For ranchers already dealing with screwworm, the uncertainty means they cannot plan ahead.
What the Fed has to do with it
Higher beef prices are part of a broader stickiness in food costs that complicates the Fed's rate decisions. Polymarket, a prediction market, currently gives an 80% chance that the central bank will make zero rate cuts in its next few meetings. That would keep borrowing costs high for farmers who need loans for feed, equipment, or new cattle. It also means consumers facing pricier ground beef won't get help from cheaper credit.
The combination of biological outbreak, trade deadline, and tight monetary policy leaves little room for error. The next milestone is July 1 — and whether the USMCA gets renewed or not will shape how the rest of the year looks for everyone from the feedlot to the dinner table.
