By Tom Polansek
CHICAGO (Reuters) -The U.S. Department of Agriculture late on Friday walked back comments that it could resume imports of Mexican cattle before year-end holidays, after it suspended shipments last month due to the discovery of New World screwworm in Mexico.
The agency also said it approved a second round of emergency funding to block the flesh-eating livestock pest from entering the United States.
Lifting the import suspension would remove a barrier for the U.S. agricultural sector, as farmers and consumers prepare for rising prices and supply-chain disruptions if President-elect Donald Trump follows through on plans to slap tariffs on goods from Mexico and Canada.
"Shipments will likely resume incrementally after the New Year, with full resumption of live animal movements sometime after that," Dr. Rosemary Sifford, USDA's chief veterinary officer, said in a statement.
Jenny Lester Moffitt, USDA undersecretary for marketing and regulatory programs, previously told Reuters that some imports may resume as soon as this month.
"We could have some (imports) certainly before the holidays," Moffitt said in an interview, and more in January.
The USDA is tapping $165 million from the Commodity Credit Corporation to bolster the fight against screwworm in Mexico and Central America, Moffitt said. It approved $109.8 million last year.
The U.S. is working to block the pest that has spread through Central America because it can infest livestock, wildlife and in rare cases, people. Maggots from screwworm flies burrow into the skin of living animals, causing serious and often fatal damage.
Mexico identified screwworm in a cow in a southern state near the Guatemalan border in November, prompting Washington to halt imports.
To resume shipments, Mexico must set up USDA-approved holding pens where inspectors will check and treat Mexican cattle for screwworm before they cross the border, Moffitt said. USDA will start inspecting Mexico's pens soon, she added.
"While the United States continues to work very closely with Mexico and has agreed to protocols, it will take some time to implement these due to multiple steps needed to resume trade," Sifford said later.
U.S. meat companies and cattle feeders are eager for trading to restart after drought slashed the nation's herd to its smallest size in decades.
"They're just holding their breath right now," said Ron Gill, a Texas A&M University livestock specialist.
USDA's funds will aid the production and dispersal of sterile screwworm flies in Central America, Moffitt said. A Panama-based facility increased production to about 95 million sterile flies a week from 20 million over the past year, she said.
Sterile male flies are bred to mate with fertile female flies, so the screwworm population decreases until it eventually dies out. USDA said it eradicated screwworm from the U.S. in 1966 using this technique.