Tyson, JBS Shares Rally on USDA Plan to Resume Mexican Cattle Imports

Shares of major U.S. meatpackers Tyson Foods (NYSE:TSN) and JBS (JBSS3) rallied on Monday following a U.S. Department of Agriculture announcement that it will resume cattle imports from Mexico. Tyson Foods stock climbed 6.3%, while JBS shares rose 8.6% on the news.

Alleviating Supply Pressures

The market's positive reaction stems from the expected impact on domestic cattle supplies. The resumption of imports is anticipated to ease a shortage that has increased costs for processors like Tyson and JBS.

Prior to a halt in late 2024, Mexico was a significant source of livestock for the U.S., sending over a million head of cattle annually. This trade primarily consisted of younger animals that are then raised and processed within the United States.

Details of the Phased Reopening

The USDA stated that it will begin a phased reopening of imports starting August 24 at the Douglas, Arizona port of entry. The agency will evaluate this initial phase before considering the reopening of additional ports in Santa Teresa and Columbus, New Mexico.

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The decision to restart imports is contingent on Mexico's adherence to a previously agreed-upon Joint Action Plan. Every animal entering the U.S. will be subject to a full USDA inspection to ensure it is free from the New World screwworm parasite, the original reason for the import ban.

Background and Safeguards

The U.S. suspended the trade in late 2024 as a protective measure against the New World screwworm. "The closure of the Southern ports of entry for the last year has been a tough but necessary action to control the spread of NWS in Mexico and protect the American livestock industry," said U.S. Secretary of Agriculture Brooke L. Rollins in a statement.

According to the USDA, the Mexican states of Sonora and Chihuahua are considered the lowest-risk areas due to established inspection programs and their distance from the parasite's prevalence in southern Mexico. The agency noted the closest active case detected on July 22 was approximately 325 miles from the Douglas port of entry.