CHICAGO (Reuters) - New World Screwworm, a devastating parasite that eats cattle and other wild animals alive, is traveling north from Central America to Mexico and has crept past biological barriers that kept the pest contained for decades, experts said.

Washington halted cattle imports from Mexico in May, citing the insect's spread further into Mexico, about 700 miles from the Texas border. With the U.S. cattle herd already at a multi-decade low, the closure could further elevate record-high beef prices by keeping more calves out of the U.S. cattle supply.

What is New World Screwworm?

Screwworms are parasitic flies whose females lay eggs in wounds on any warm-blooded animal. Livestock and wild animals are usually the victims. Once the eggs hatch, hundreds of screwworm larvae use their sharp mouths to burrow through living flesh -- feeding, enlarging the wound and eventually killing their host if left untreated.

When screwworms infect a cow, a tiny scrape, a recent brand or a healing ear tag can quickly become a gaping wound, carpeted with wriggling maggots that put the entire herd at risk of infestation. Screwworms were eradicated from the U.S. in the 1960s when researchers began releasing massive numbers of sterilized male screwworm flies who mate with wild female screwworms to produce infertile eggs.

Why does this matter to U.S. consumers?

The U.S. typically imports over a million cattle from Mexico every year. The import suspension will likely contribute to rising beef prices by tightening the supply of beef cattle, which dwindled after drought forced ranchers to slash herds.

U.S. beef prices likely also got a boost from a separate import suspension from Mexico over screwworms that lasted from November to February, experts said, and upward pressure on prices should persist through summer grilling season. Mexican cattle are usually fed and fattened on U.S. farms for five to six months before slaughter, and a diminished slaughter rate can elevate beef prices.

Though the fly is hundreds of miles away from the border, any outbreak in the U.S. would further tighten the cattle supply and put other livestock and household pets at risk. Screwworms will even feed on humans if they can, said Dr. Timothy Goldsmith, a veterinary medicine professor at the University of Minnesota. Homeless people would be especially vulnerable to infestation because they sleep outside and have less access to hygiene products and medical care, Goldsmith said.

What is being done to control the outbreak?

A factory designed to breed and sterilize screwworms in Panama is releasing 100 million sterile flies every week, but experts say more factories need to come online quickly to choke off the fly's spread north. 

Screwworms cannot fly more than 12 miles on their own, but they can cover large distances while burrowed inside their hosts, said Sonja Swiger, entomologist at Texas A&M University. The flies have already passed through the narrowest stretches of land in Panama and Mexico, meaning exponentially more sterile flies need to be released to control the outbreak. 

On Tuesday, the U.S. Department of Agriculture announced it would invest $21 million to convert a fruit fly factory in Mexico to produce sterile screwworms. The agency said the border will likely re-open to cattle imports by the end of the year.

How could this impact American cattle ranchers?

The USDA estimated a screwworm outbreak would cost the Texas economy $1.8 billion in livestock deaths, labor costs and medication expenses. After decades of eradication, most cattle ranchers no longer have the experience or tools to diagnose and treat screwworm. Infestations can be cured, but treatment involves removing hundreds of larvae and thoroughly disinfecting wounds, a time-consuming, pricey and labor-intensive process.

"This is a pest we don't want back. This is a bad thing," said David Anderson, livestock economist at Texas A&M University. "I can't imagine having to deal with that. It's gross."