By Ian Berry and Jesse Newman
CHICAGO--National Beef Packing Co. and JBS SA (JBSAY, JBSS3.BR)
said Monday they would not change their cattle-buying practices
after rival Tyson Foods Inc. (TSN) announced last week it would
stop processing animals fed with a widely used animal
supplement.
Tyson sent a letter to cattle suppliers on August 7 saying it
would stop accepting cattle fed with Zilmax--which promotes weight
gain--after receiving animals at some of its beef plants that had
difficulty walking, or unable to move. The announcement sparked a
rally in CME live-cattle futures as traders said the move could
lead to tighter beef supplies.
After days of silence, National Beef Packing, a private company
based in Kansas City, Mo., and one of the country's largest
meatpackers, issued a brief statement Monday afternoon.
"National Beef places a high priority on animal welfare with
cattle in our facilities and we do not plan to change our
cattle-procurement practices," the company said.
Meanwhile, Brazilian-based JBS, the world's largest meat
processor, said it has noticed similar problems to those cited by
Tyson, and added it will continue its current approach of
"extensive monitoring" of animals at its plants.
JBS hasn't been able to identify a cause, JBS spokesman Cameron
Bruett said in an interview. He said the company has a "heightened
interest" in the matter, but would continue to accept animals fed
with the supplement.
"It has caught our attention and it's not something we want to
happen," Mr. Bruett said. "We're always concerned with the
well-being of animals."
The companies follow a move by rival Cargill Inc., which on
August 8 said it would continue to accept cattle fed with
Zilmax.
Although Tyson's move to ban Zilmax, produced by Merck & Co.
(MRK), initially led to a rally in cattle futures, analysts said
the ultimate impact on cattle and beef prices could be limited
unless Tyson and its competitors announce broader bans. Some
feedlot operators are likely to switch to a competing product named
Optaflexx, which is less potent than Zilmax but strong enough to
mitigate the impact on supplies, analysts said. Optaflexx is made
by Eli Lilly & Co.'s (LLY) Elanco unit.
--David Kesmodel contributed to this article.
Write to Ian Berry at ian.berry@wsj.com and Jesse Newman at
jesse.newman@wsj.com
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