Tyson Foods, Inc., America"s second-largest beef processor, has announced it will suspend purchases of cattle fed the beta-agonist zilpaterol, marketed by Merck under the brand name Zilmax.
In a letter to cattle feeders, Tyson indicated it would stop accepting cattle fed the growth enhancer on September 6, 2013, as an interim measure while the company reviews animal welfare concerns related to the product.
According to Reuters, rumors of Tyson"s action sparked a sharp rally in Chicago Mercantile Exchange cattle futures on Wednesday. Removing Zilmax from feed rations would bring down the weight of cattle, resulting in less available beef and likely drive up beef prices.
Tyson"s letter to feeders said, "There have been recent instances of cattle delivered for processing that have difficulty walking or 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 is one possible cause."
Merck Animal Health issued a statement that reiterated that the benefits of Zilmax are well documented and the company noted the product has undergone rigorous testing over a 30-year period.
"Merck Animal Health has offered technical assistance, both internal and external experts, to help Tyson to understand what is behind the instances at its facility," the company said. "Merck Animal Health is confident in the extensive research and data behind the product and the fact that its safety has been well demonstrated."
Tyson"s website shows that it has 26 percent of the U.S. beef market and it processes 132,000 head of cattle per week. Shares of Tyson jumped to all-time highs this week after the company reported on Monday that strong meat demand drove a bigger-than-expected jump in quarterly profit.