Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tyson Foods, Inc. (TSN), Smithfield Foods, Inc. (SFD): Merck & Co., Inc. (MRK) Buried by Industry Beef

Like a pebble rolling downhill and starting an avalanche, the decision by Tyson Foods, Inc. (NYSE:TSN) to stop buying cattle fattened with the steroid-like drug Zilmax has caused a rockslide that may create reverberations throughout the corporate agricultural food chain.

Not only has Tyson Foods, Inc. (NYSE:TSN)’s decision caused pharmaceutical giant Merck & Co., Inc. (NYSE:MRK) to suspend the sale of the drug in the U.S. and Canada, but now the third-biggest meat processor, Cargill, has said it will also stop buying cattle that have been injected with Zilmax.

Merck & Co., Inc. (NYSE:MRK)

Tyson Foods, Inc. (NYSE:TSN) suspected the drug was causing its cattle to have difficulty walking. Zilmax bulks up cows by as much as 24 to 34 pounds just before they’re led to slaughter, which Merck & Co., Inc. (NYSE:MRK) naturally contends is safe. It says it has 30 years of research behind it to prove its efficacy, and the FDA chimes in that it’s safe for human consumption, too. Of course, now along with the Agriculture Dept., it is investigating whether it’s really as safe as it has said.

The ball really got rolling against Zilmax — or the rocks really started sliding — after Smithfield Foods, Inc. (NYSE:SFD) banned the use of the similar drug ractopine in its cattle, which was developed by Eli Lilly & Co. (NYSE:LLY) subsidiary Elanco Animal Health. When used on hogs, the drug is called Paylean; for cattle it’s called Optaflexx. While Smithfield’s move might have had more to do with its sale to a Chinese meat processor, a deal that occurred a week after Smithfield Foods, Inc. (NYSE:SFD) made the announcement — its use is banned in many countries of the EU as well as China and Russia — it doesn’t seem to really herald a new thinking by meat producers that maybe all was not well in the industry.

As noted, some contend Smithfield Foods, Inc. (NYSE:SFD) was really just paving the way for its sale and Tyson Foods, Inc. (NYSE:TSN) says it rejected the drug for animal safety reasons, not human health. As for Cargill, its announcement came after Merck & Co., Inc. (NYSE:MRK) had already halted sales of Zilmax.

Still, the moves do raise awareness of what exactly we’re doing to the animals we consume. Although I’m not against consumption of beef, pork, and other animals — I love seeing steaks cooking on the grill — whenever possible, I prefer mine to be grass-fed and not artificially fattened by growth hormones or other chemicals.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.