Juvencio killed Don Lupe for not allowing Juvencio's animals to graze on his land and for ultimately killing an animal that had wandered across the fence. We learn by the end of the story that this is an extremely brutal murder and all for a feud over whether or not the animals could cross into Don Lupe's land, which had much more and better grass.
The murder itself tells us a lot about Juvencio and his sense of morality. In his statement that he had to kill Don Lupe, we see that he feels justified in his action. He truly believes that Don Lupe was in the wrong and that killing Don Lupe for killing an animal was his only option.
We see no form of redemption for Juvencio throughout the story. He shows no remorse for his deed, and in the end he begs for his life but never admits to himself or to the colonel that he may have been wrong to kill Juvencio.
There are many possible reasons why Juvencio felt he needed to kill Don Lupe. It's likely that his animals were all he had and were his primary mode of making a living. We also know that the feud had been ongoing, and there were several days of opening and closing the fence leading up to the murder. Finally, we can see a sense of honor in Juvencio's memories. Not only had Don Lupe killed an animal, but he had offended Juvencio's honor and fanned the flames of this ongoing and quickly escalating feud.