This story will almost certainly drive the price of beef up (futures are rising at the open this morning), as cattle will not grow as heavy or large without Merck’s Zilmax® in their feed. It is highly unlikely to affect Merck’s stock price, as the sales decline will not be material in view of Merck’s nearly $50 billion of annual revenue.
From the Bloomberg story, overnight — then, a bit:
. . . .“Some animal-health experts have suggested that the use of the feed supplement Zilmax, also known as zilpaterol, is one possible cause” for the animals being unable to walk, according to a letter sent by Springdale, Arkansas-based Tyson to cattle suppliers. The “interim measure” is effective Sept. 6, and the “evaluation of these problems is ongoing,” according to the letter provided yesterday by Tyson spokesman Gary Mickelson.
“This is not a food-safety issue,” according to the letter. “It is about animal well-being and ensuring the proper treatment of the livestock we depend on to operate. . . .”
Just the same, we will keep you posted. Zilmax was also linked in late 2010, to racehorse trainers’ allegedly illicit efforts to improve muscle mass and speed, in thoroughbred racing.