Merck‘s (MRK) Zilmax is a growth additive that can add more than 30 pounds to cattle, but the drug has been decried by animal rights activists, who say it hurts the animals. Now one beef packer has decided to stop purchasing cattle fed the drug.
By refusing to use cattle raised with Zilmax, Tyson Foods (TSN), the largest U.S. beef packer, could potentially boost its exports to countries like Russia and China, which have banned other growth additives in livestock. The company purchases about 25% of all U.S. cattle used in beef production — 132,000 cattle per week, Reuters notes.
Tyson’s move could also spell higher beef prices for U.S. consumers, since cattle producers will have to spend more on feed to raise the same amount of beef. Cattle country is already experiencing a prolonged drought that has boost beef prices in recent years.
However, no other large U.S. beef packers have yet joined Tyson in the ban.
Zilmax’s popularity among cattle producers has climbed as feed costs have risen. But animal rights activists say it harms cattle, who find the added weight stressful.
Shares of Tyson climbed slightly in Monday morning trading.