Over a nine-day period, a stunning series of developments that concluded with Zilmax™being temporarily removed from the U.S. and Canadian market shakes up the supply picture for U.S. beef.

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Capping An Eventful Nine Days, Merck Halts Zilmax™ Sales

Nine days in August offered up a stunning series of events regarding Zilmax™ (zilpaterol), a beta-agonist from Merck Animal Health. The sequence began Aug. 7, when Tyson imposed a ban on use of Zilmax by its fed-cattle suppliers. It ended nine days later when Merck, makers of the product, temporarily removed the product from the market.

Aug. 7 surprise

The episode began with a surprise announcement Aug. 7 by Tyson Fresh Meats that – effective Sept. 6 – it would no longer accept cattle fed Zilmax. The nation’s largest processor of fed beef said it was not instituting the ban due to food safety concerns, but concerns over animal welfare due to lameness issues observed in some animals arriving at Tyson processing plants.

The move sent cattle futures surging based on the expectation that the ban would reduce beef supplies coming to market in the next 12 months. At the time, Steve Meyer of the CME Group characterized it as a "reasonable expectation given the significant carcass weight gains that have been attributed to the inclusion of beta-agonists like Zilmax in feedlot rations. " He said the question was just how big of an impact the ban would have on beef tonnage. A big unknown, of course, was whether other packers would follow Tyson's lead.

Cargill, another among the top four U.S. beef packers, immediately provided an answer by announcing it wouldn’t adopt Tyson’s policy. That was followed a few days later by the last of the big four – National Beef and JBS – siding with Cargill.

Another question was whether Tyson feeders forced to stop the use of Zilmax would switch to Optaflexx™ (ractopamine), which Tyson hadn’t precluded. Optaflexx is a beta-agonist made by Elanco Animal Health, and is considered to be a less aggressive product. While no hard numbers are available, estimates are that around 70% of U.S. fed cattle were being fed one of the two products prior to Tyson's announcement.

Merck responds

Merck went on the offensive immediately upon Tyson's move, releasing a statement emphasizing its commitment to animal well-being. Merck cited the benefits and safety of Zilmax documented over a 30+ year history of research and development and rigorous testing.

A few days later, Merck added that it would “vigorously pursue all reported adverse events, whether or not they are deemed related to the product.” Central to this effort was its “Five-Step Approach to Ensuring Responsible Beef,” which Merck said it would operate in conjunction with independent experts.

The program would consist of a scientific audit to monitor the process of feeding of Zilmax, and would follow identified cattle from the feedyard to the packing plant to determine potential causes of lameness and other mobility issues during feeding, transportation, offloading and staging at the processing facility. Merck said it also would conduct a thorough review of potential compounding factors – such as nutrition, transportation and receiving facilities.

However, the next day, Aug. 16, the company announced it was temporarily suspending sales of Zilmax in the U.S. and Canada. Merck said it was doing so to ensure effective implementation of its five-step plan.

“This will allow sufficient time for the establishment of valid study protocols, identification of feeders and packers to participate in the audit, and creation of a third-party team to oversee this process and validate its results,” the release said.

K.J. Varma, Merck’s senior vice president of global R&D, said the temporary suspension “demonstrates our commitment to providing our industry partners with data that will reaffirm confidence in Zilmax. We sincerely regret that this situation creates business challenges for our customers but it is critical to ensure that this process is conducted appropriately and with rigorous scientific measures. After the five-step plan is completed, the results will be shared publicly."

The release also said Merck was accelerating its development of an animal health advisory board consisting of industry experts, producers, academics and company leadership “to promote an open dialogue on animal well-being and help shape and strengthen the company's animal health and well-being program in the future.”

Before Merck’s voluntary withdrawal of Zilmax, Glynn Tonsor, Kansas State University economist, characterized the situation as fluid. After all, nothing guarantees that Tyson, or the other three packers, won’t reverse their policies.

But Tonsor says Tyson’s announcement makes less beef volume a certainty in the coming months. “We’ll produce less, but how much less depends on how many people disadopt the use of Zilmax. Will Tyson be alone, and to go further, what portion of their recent suppliers will simply switch processing plants or move from Zilmax to Optaflexx?” he asks.

If such a switch occurs, Tonsor says the beef industry likely won’t see a huge reduction in beef volume. “At the margin, there’s said to be a better gain for Zilmax, but if Tyson’s suppliers just move to Optaflexx, I don’t think we’ll see aggregate projections impacted all that much,” he adds.

Tyson's letter to feeders

The main points made in the Tyson letter, which was addressed to “cattle feeders” with the subject line of “animal well being,” and signed by John Gerber, director of cattle procurement for Tyson Fresh Meats, were:

• “There have been recent instances of cattle delivered for processing that have difficulty walking or are unable to move. We do not know the specific cause of these problems, but some animal health experts have suggested that the use of the feed supplement Zilmax, also known as zilpaterol, is one possible cause. Our evaluation of these problems is ongoing but as an interim measure we plan to suspend our purchases of cattle that have been fed Zilmax.

 • “This is not a food safety issue. It is about animal well-being and ensuring the proper treatment of the livestock we depend on to operate. If you have any questions, please contact your Tyson Fresh Meats cattle buyer.”

The Tyson announcement came at a particularly curious time. With today’s relatively tight numbers and high feed prices, the additional weight per animal that beta agonists add to closeout weights have been exceedingly welcome. As Troy Marshall opines in BEEF Cow-Calf Weekly, “the reason the industry has seen such a major move toward the use of beta-agonists is the tremendous economic incentive to do so. Most of that weight gain ends up as carcass weight, and disproportionately in the retail case. That makes the value difference significant.”

In addition, at the time of the Tyson announcement, cattle producers were meeting in Denver to discuss the role and the industry’s position on the use of beta-agonists. Consensus seemed to be that the science and demonstrated safety behind these FDA-approved products supported their continued use, but any related animal well-being concerns should be investigated.

The CME Group’s Meyer points out that the situation underscores the times we live in.

“‘I’m using an approved product according to the label!’ is no longer an acceptable response to concerns over animal well-being. We economists would term approval and proper usage as ‘necessary but not sufficient’ conditions in today’s culture. Just as we no longer have the authority to ‘do what I darn well please’ with the animals we own, we also must judge the impact of approved, safe products on animal and human well-being and take actions appropriate for the times – whether we like it or not.”


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