What screwworm’s appearance in U.S. cattle could mean for beef prices this summer 

The arrival of the invasive New World screwworm in Texas, a parasitic fly whose larvae burrow into the flesh of living warm-blooded animals, could exacerbate existing inflation pain for Americans already grappling with high beef prices. 

Carmen Smith and her fiancé, Jim, relocated to San Diego County from North Carolina in late 2024. They’ve managed to hold the line on the higher California cost of living in general, but she notes beef prices have gone up since last year and fears they will probably climb even higher now. 

“We’re going to be eating more chicken and seafood, though I’m not a fan of the latter,” Smith said. 

“I already go meatless three times a week, but my fiancé is going to have to give up his steak for a while,” Smith said. 

Consumers received a bit of relief from the just-released consumer price index report, which tracks inflation across a wide range of goods and services. Ground beef prices fell -1.27% in May, according to the CPI report, but that did come after a 2.7% gain in April, and beef prices remain up 12.9% year over year.

Trading down to more affordable cuts of meat is how Americans have dealt with past periods of beef inflation, said Goran Haiem, founder of Destination Wagyu, a high-end beef brand based in Los Angeles that offers a subscription service delivering premium Wagyu beef directly to consumers and restaurants. Their most popular product is a $175 ribeye. 

“Chicken has always been the value substitute for beef,” Haiem said.  “What I can see is promotions on things like chicken, ground beef, and cheaper beef cuts. The more premium cuts of beef will be more likely to see price increases,” Haiem said. 

Haiem doesn’t expect the higher prices to end anytime soon, given the effect of the historically low cattle supply in the U.S., but if the outbreak is contained quickly, already volatile beef prices may at least stabilize at current levels.

“We are at a 75-year low right now on U.S. cattle herd, and this does not help because screwworm further disrupts ranchers expanding their herd,” Haiem said. 

The screwworm can cause painful wounds that can become life-threatening without treatment, and the pest poses a risk to livestock, wildlife, pets and, in uncommon cases, people. Despite the health and economic concerns, government officials and industry executives have said there is no threat to the food supply or public health. 

Colin Woodall, CEO of the National Cattlemen’s Beef Association, the industry’s largest and oldest trade group, emphasized the safety of the nation’s beef supply and said the screwworm’s arrival was not a surprise. 

“We have been anticipating this for some time. It is not a shock to the supply. It is a pest, and like many other pests, we deal with it,” Woodall said, adding that ranchers have products available to treat cattle and keep them healthy. 

“This will not have an overall impact on the beef supply,” Woodall said. He pointed to a similar bout with the fly in the 1960s, noting that there are far more tools to combat it this time around. 

Last December, the U.S. Food and Drug Administration granted conditional approval for a Merck Animal Health pour-on treatment for the prevention and treatment of New World Screwworm. That is one among many treatment options on the market, some of which the USDA has expedited access to amid the current concerns.

“We have products that can go in and kill the pest,” Woodall said. Unlike avian flu, which spreads from bird to bird and forces farmers to eliminate entire flocks, he said there is no scenario in which the screwworm triggers a mass culling of cattle. 

“This is not a virus, it’s not a disease, it’s just a little pest, a larva that lands in a calf’s wound, for example, and it can be treated,” U.S. Department of Agriculture Secretary Brooke Rollins said in an interview on CNBC’s “Squawk Box” this week. 

Friction has emerged between the Trump administration and Texas state officials this week, with Rollins on Monday calling Texas Agriculture Commissioner Sid Miller “unserious” after he criticized the USDA’s response to the threat.

While treatments can work case by case, medication cannot eradicate the screwworm.

Woodall said the best defense against the flies is the release of sterile males into the wild. “That is the best technology we have. Put sterile flies into the wild — the female fly mates once in her life, and she mates with a sterile male, and that stops the spread,” Woodall said.

Some 500 million sterile flies need to be released per week to halt the spread, far more than the roughly 100 million per week currently deployed. A sterile fly facility is currently under construction in Texas, which will enable the U.S. to ramp up production. He expects capacity to reach 500 million per week by 2027. 

Cattle farming costs will rise

But the current situation means added cost for cattle ranchers, who must absorb additional labor, veterinary fees, and monitoring expenses. 

“All of that comes out of your bottom line as a producer, so there will be a significant economic impact to cattle farmers,” Woodall said.

Any price increases ultimately occur after the beef leaves the farm. “Beef demand is at a 40-year high. If you are a rancher in Texas today, you don’t get to determine what the price of steak is,” Woodall said. 

Brandon Parsons, an economist at Pepperdine Graziadio Business School, predicts higher beef prices for consumers but said that, at least so far, consumers haven’t flinched. If prices keep climbing, trade-downs will follow. What is happening with beef right now, Parsons said, is straight out of college economics textbooks. 

“When supply contracts and demand stays relatively stable, prices increase, and that’s Economics 101 — and it’s exactly what we’re seeing,” Parsons said, noting that consumers have not backed away from beef even as supply shrinks. 

While tariffs that impacted beef prices have recently relaxed, the damage has already been done, with the pricing pain compounded by the smallest cattle herd in 75 years due to prolonged droughts in several regions, Parsons said, and the suspension of cattle imports from Mexico. 

The suspension of live cattle imports from Mexico has effectively removed an estimated 1.2 million head of feeder cattle from the annual supply chain, sending feeder cattle futures to record highs. The supply curve has already shifted far to the left, and the screwworm threatens to push it even further. 

“The screwworm outbreak is a possible severe supply shock at a time when the beef supply is already historically low,” Parsons said. “Given that this possible screwworm outbreak could lead to a larger supply shock on top of an existing supply shortage, prices could increase further,” he added. 

How all of this plays out in the grocery aisle remains somewhat uncertain, and will depend in part on how badly consumers want that steak or roast. He predicts grocers will raise beef prices, but said it may not be as dramatic as the recent inflationary spike seen in egg prices (which have since come down dramatically), since eggs tend to be more price-inelastic due to their role as a baking staple. 

“Although there are other meat substitutes, many people prefer beef, which will keep demand relatively stable,” Parsons said. However, there will come a point where people start substituting chicken for beef or buying lesser cuts, which will limit how much grocers can raise prices without reducing quantity demanded, he added. 

“Despite supply-side constraints and record-high retail prices, U.S. consumers have shown some price insensitivity to beef price increases so far — but there is a price point at which substitution increases,” Parsons said.

Chicken and pork are the direct beneficiaries when the price of one good rises and consumers tend to shift toward substitutes. Overall inflation and its impact on consumer disposable income will also play a role in these decisions, he said. 

For some, disposable income for beef is already dwindling. 

Judi Gawor, a senior living on a fixed income in Hendersonville, North Carolina, is among those watching the current screwworm situation closely. “I definitely fear beef prices will rise even more than they already have due to the screwworm debacle,” Gawor said, noting that in today’s world, she thinks any excuse to raise prices on commodities will cause it to happen. “If beef prices continue to escalate, we’ll be eating a lot of chicken” she said. 

—Annika Kim Constantino contributed to this report.