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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.
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.