Laura Mahecha
Director, Agrochemicals
The U.S. beef industry is undergoing one of its most volatile periods in recent years. With historic supply constraints, import disruptions, and an intensifying screwworm crisis along the southern border, beef prices have surged sharply over the past two years. These fluctuations are not just reshaping the economics of beef production; they may also shift patterns of production and animal pesticide use, including parasiticides and insect control products critical to livestock health.
In this blog, we take a closer look at current market pressures and how they could reshape demand for livestock pesticides, and what stakeholders across agriculture and animal health should prepare for next.
Import Restrictions Are Tightening Cattle Supplies and Driving Beef Prices Up
The U.S. cattle supply has fallen to its lowest level in 75 years, with the USDA reporting just 86.2 million head in early 2026. This sustained supply decline, combined with border closures linked to New World screwworm detections in Mexico, is sharply restricting feeder cattle imports, historically, a key source of U.S. supply. Mexican feeder cattle imports, normally exceeding 1.2 million head annually, have been cut off because of screwworm-related border closures. The USDA projects significantly lower beef production in 2025 and 2026 due to tight inventories and reduced slaughter volumes. Import restrictions are expected to remain in place through 2026, with no reopening timeline.
These pressures have fueled sharp price escalation across the value chain:
Ground beef hit $6.69/lb in December 2025, up 19.3% YOY and 72% since 2020, according to Food Ingredients First
Wholesale beef prices are expected to rise another 6.9% in 2026, according to Food Ingredients First.
Cattle price forecasts continue climbing due to tighter supplies. With fewer cattle entering the system and domestic herds slow to rebuild, cost pressures will likely persist well into 2027.
New World Screwworm Crisis: A Disease Threat With Pesticide Implications
The screwworm outbreak in Mexico and Central America is not only driving border closures but also elevating scrutiny on livestock pest control. The New World screwworm’s proximity to the U.S. border (reported within 200 miles) has heightened biosecurity concerns. The outbreak triggered the shutdown of Mexican livestock imports and forced emergency federal action. In an effort to alleviate price pressure, the U.S. is increasing its beef imports from Argentina, Brazil, and Australia, as Mexican cattle imports are restricted.
This is important for pesticide suppliers because heightened disease prevention efforts traditionally increase demand for:
- Topical and systemic parasiticides
- Fly control products
- Insect growth regulators (IGRs)
- Environmental insecticides for barns and feedlots
Given the market volatility, high beef prices could have impacts on cattle pesticide use in two main ways.
1. Higher animal value typically leads to more consistent pesticide applications. Cattle producers have an incentive to protect high value animals, so when cattle prices soar, producers have a stronger financial motivation to:
Prevent parasite-driven weight loss
Minimize disease risk
Maintain feed efficiency
Enhance carcass quality
Reduce morbidity/mortality losses
2. Cost pressures may reduce spending elsewhere. Conversely, elevated feed, labor, and capital costs may cause some producers to delay routine treatments, shift to lower-cost pesticide products, reduce environmental insecticide applications, or consolidate the product usage of multispecies.
As price volatility continues, market segmentation may widen between cost-conscious small operations and larger, more risk-averse feedlots.
Rebuilding a national cattle herd takes 3–5 years, and signs point to slow progress. This slow process could boost production-animal pesticide volumes over the long term. Replacement heifer numbers remain low, with the USDA reporting continuing declines through 2025–2026.
Drought recovery and pasture conditions will dictate whether producers feel confident enough to retain breeding stock. As herd rebuilding eventually ramps up, this means more animals on the ground and, therefore, increased pesticide demand. We expect to see growth in:
Calf-focused parasiticides
Cow-calf fly and tick control
Pasture-based insect control products
Over the next year, we expect these trends to translate into elevated pesticide demand in response to screwworm threats and heightened pest awareness. There may also be a strong market for premium parasiticides as cattle value remains historically high. There could also potentially be increases in environmental insecticides in feedlot regions.
Over the next several years, herd rebuilding will drive sustained pesticide volume growth; border restrictions will continue to shape supply and pest control practices, and producers may return to routine integrated pest management as markets stabilize.
Kline’s Pest Control in Production-Animal Health U.S. 2026 study will be published later this year and will address these market forces and their expected impact on the market. The research is based on surveys of animal production farms and facilities in the United States and in-depth interviews with pest control product suppliers, end users, distributors, trade associations, government agencies, and other industry participants. The study provides a comprehensive overview of the market for pesticides that are used to improve animal health in the beef, dairy, egg, poultry, hog, and sheep production industries. This report provides details on demand, trends, developments, and business opportunities. For more information, please contact us.
