The U.S. will allow beef imports from Paraguay for the first time in 25 years as shrinking cattle herds raise domestic prices and limit supply.

Beef exports from Paraguay were barred in 1997 due to concerns over the country's meat inspection system and the potential spread of foot-and-mouth disease. Earlier this year, the U.S. Department of Agriculture said audits revealed safety standard improvements and ruled beef could safely be imported from the country under certain conditions.

The ruling, which went into effect Dec. 14, has sparked broad criticism from U.S. ranchers who say safety audits are outdated and warn of potential consequences to the cattle industry. Highly contagious foot-and-mouth disease was eradicated from the U.S. in the 1920s and a resurgence would likely halt all livestock exports.

Livestock producers have called on the USDA to overturn the rule. U.S. senators introduced a bill earlier this month that would pause exports until a working group conducts a risk safety assessment.

"The U.S. should not extend our market to unsafe actors at the risk of the health and livelihood of U.S. agricultural producers or consumers," a group of U.S. representatives wrote in a letter to USDA Secretary Tom Vilsack in November. "An FMD outbreak in the U.S. would cause catastrophic damage to the U.S. economy and cut off access to vital export markets."

Reopening the beef trade with Paraguay also stands to further reduce demand for U.S. beef as ranchers contend with elevated production expenses and smaller cattle herds. Intense drought over the past few years has whittled down cattle numbers, raising consumer prices and decreasing appetite for U.S. beef at home and abroad.

The U.S. is importing record amounts of beef to offset rising consumer prices, cutting into the domestic market for local producers. The resumption of exports from Paraguay could lead to $24 million in yearly losses for producers, according to an analysis from USDA.