Tyson Causes Surge in Cattle Prices

Cattle prices at 5 month high after Tyson halts the purchase of Cattle fed the drug Zilmax

By Victor Santiago, Farms.com

Tyson Foods has fueled a rise in cattle prices with their decision to temporarily halt the purchase of cattle that were given the growth stimulating supplement Zilmax. Tyson’s decision came after animal-health experts suggested that Zilmax likely caused some cattle to become lame and unable to walk according to Tyson spokesman Gary Mickelson. Cattle futures jumped the most in 15 months and caused the price of cattle to hit a 5 month high of $1.28 a pound for October delivery.

Zilmax is produced by New Jersey pharmaceutical giant Merck & CO. Inc. The main purpose of the drug is to increase feed efficiency. Steve Kay, the editor of Cattle buyers weekly says that the drug is given in the last month of the animal’s life and helps it gain between 11 to 15 Kg of lean tissue. In a public corporate email, Merck said, “data and research showed that the behavior and movement of cattle fed Zilmax is normal”. Tyson has stated that its beef is safe and that the issue was about animal well-being not food safety in the following statement; “It is about animal well-being and ensuring the proper treatment of the livestock we depend on to operate.”

Tyson is the biggest U.S. meat processor and therefore a big market mover. It is estimated that up to 80% of cattle are finished with Zilmax or the alternative Optaflexx, the latter of which is restricted in China and Russia. Zilmax is used globally including in South Korea, Canada, Mexico and South Africa.

The halt of purchasing Zilmax fed cattle is effective September 6, 2013, which gives producers time to not feed Zilmax before sale.