Amid all the discussion and debate around the issue of Zilmax (zilpaterol hydrochloride) over the past two weeks, one thing is clear: The product performs as advertised in terms of boosting carcass weights and lean-meat yield. So when Tyson announced on August 7 it would place a moratorium on purchasing cattle fed Zilmax due to animal-welfare concerns, followed by Merck Animal Health temporarily suspending sales of the product on August 16, speculation arose as to how the reduction in beef production would affect markets.
And indeed, fed-cattle futures and boxed-beef prices have moved higher, with anticipation of shorter beef supplies probably playing a role.
However, industry reports suggest the impact of removing Zilmax from finishing programs, while significant, might not be as dramatic as some have speculated.
In USDA’s Livestock, Dairy and poultry Outlook report last week, the agency speculates that impacts on beef supplies could be mitigated by feeders switching to the alternative beta agonist product – Optaflexx (ractopamine hydrochloride) – and by lower corn prices allowing feeders to cost-effectively feed cattle to heavier weights. The USDA report was issued after Tyson’s decision but before Merck announced its suspension of sales.