USMCA review could change beef flow in North America

The review of the United States-Mexico-Canada Agreement (USMCA) begins a new phase in trade negotiations between the three countries and is monitored by the beef sector, which assesses possible impacts on the flow of trade in North America.

The expectation is that the first bilateral meeting between the United States and Mexico will take place in the week of July 20, in Mexico City, with topics related to agribusiness at the center of the discussions.

For part of the North American livestock industry, the review of the agreement represents an opportunity to strengthen domestic production. The CEO of R-CALF USA (one of the main associations of independent cattle ranchers in the United States), Bill Bullard, stated that replacing the trilateral model with separate negotiations could correct problems that, according to him, have persisted since the creation of NAFTA (North American Free Trade Agreement).

"The pursuit of separate trade agreements with Canada and Mexico represents an opportunity to correct the serious deficiencies of NAFTA and USMCA, which have contributed significantly to the chronic contraction of the U.S. livestock industry," he highlighted in a statement.

Bullard added that the entity's expectation is that the new agreements will prioritize American producers, reinforce the country's food security and re-establish more favorable conditions for the United States livestock industry.

However, analysts assess that market reality limits the adoption of more restrictive measures. According to Rodrigo Dutra, market analyst, the moment requires caution, but it does not yet represent a rupture in commercial relations.

"For now, preferential tariffs, rules of origin and protections remain in force normally. The immediate focus is the next bilateral round between the United States and Mexico, when agricultural issues should be on the agenda, including pressure from American producers for tariff quotas, a proposal that Mexico has already publicly signaled that it rejects", he pointed out.

The analyst highlights that the USMCA review takes place precisely in the worst scenario for cattle supply in the United States in decades. The most recent projections from the USDA (United States Department of Agriculture) indicate a further reduction in beef production in 2026, while expectations for imports remain high, reflecting the need to supply the domestic market.

"The United States depends on Canada and Mexico to meet its demand for meat for processing and ground beef. This creates a structural contradiction that gives both countries an important bargaining chip in negotiations."

Another factor influencing the scenario is the restriction on trade in live cattle between Mexico and the United States due to sanitary reasons related to the outbreak of the screwworm fly, known as New World Screwworm. Even so, Mexico has been expanding its participation as a supplier of processed beef to the American market.

In the analyst's assessment, the greatest impact for global exporters will depend on possible changes to the rules of origin or the adoption of tariff quotas.

"If Washington manages to impose more restrictive rules on Mexico during the USMCA review, the most likely effect will not be a reduction in total imports from the United States, but rather a replacement of suppliers. In this scenario, Brazil, Australia and Argentina could gain additional space in the American market, as long as they can compete on price."

Data from the first quarter of 2026 show that Brazil led the supply of beef to the United States, followed by Australia, both expanding shipments to meet the growing demand for lean meat destined for processing, a segment in which American production cannot completely supply domestic consumption.

"What is at stake is the design of trade rules for the next ten years, precisely at a time when the United States itself is more dependent on imports than in any recent period. This dependence tends to limit the space for tougher protectionist measures in the beef sector, even if the political discourse remains firm."

The analyst also adds that any change in trade rules in North America could alter global beef flows, mainly to Brazil.

Milk market in Brazil seeks gradual price recovery in 2026

Source: CNN