Has Sanderson Farms changed course by phasing out some antibiotics?
- Sanderson Farms has decided to stop using antibiotics considered medically important for humans in disease prevention. In a release last week, the Laurel, Mississippi-based company said it will discontinue the use of gentamicin and virginiamycin in live poultry by March 1.
- The change came after an advisory board completed a study of Sanderson's antibiotics use. The study concluded there was no misuse of antibiotics and compared to other poultry producers, Sanderson's broiler chickens "have better than average health." But the board said discontinuing use of medically important antibiotics "could represent a responsible compromise."
- CEO Joe F. Sanderson Jr. said in a release the company and its veterinary team "are committed to the judicious use of antibiotics in our birds." The study criticized "raised without antibiotics" and "no antibiotics ever" programs, claiming that not giving chickens any kinds of antibiotics for any reason "could create unnecessary risks to animal welfare, an increased demand for feed grains and other natural resources, and significant, additional animal waste."
Sanderson Farms has been a tireless defender of antibiotics in poultry production and hasn't been afraid to run counter to prevailing practice in the industry. The company has sponsored advertising campaigns calling antibiotic-free labeling claims "marketing gimmicks designed to mislead consumers and sell products at a higher price."
This strategy didn't appear to harm the company's brand or reputation. The ad campaigns boosted its profile on social media, with Sanderson reporting a 125.7% increase in Facebook followers, 39.5 million Facebook video shares and 96,000 Facebook post shares.
At the same time, though, Sanderson indicated in January it had a "detailed contingency plan" in place to transition to antibiotic-free chicken within a year if necessary. Commissioning an advisory board to study its antibiotic use and make recommendations seems like a smart way to approach the issue and it also gives the company room to alter policy to align itself more closely with prevailing sentiment.
Another reason for Sanderson's policy shift may be increasing shareholder support for phasing out the use of medically important antibiotics. A proposal to do so garnered 43% of shareholder votes cast at Sanderson's annual meeting in February, up from more than 30% support in 2017. The proposal was filed by As You Sow, a California-based non-profit shareholder group.
As You Sow responded positively to Sanderson's announcement. "Although we haven’t reviewed the policy in-depth yet, we are very pleased that Sanderson Farms has chosen to take this step," Christy Spees, the group's environmental health program manager, said in a release. "As the last major U.S. poultry producer to take action to eliminate medically important antibiotics from their operations, this has significant implications for the industry and for public health."
Sanderson's main competitors have already moved to phase out the routine use of antibiotics. Tyson Foods replaced them with probiotics last year in its branded chicken products, while Pilgrim's Pride and Perdue have committed to reducing or removing antibiotics from their chicken supply.
Protein producers have a big incentive to make the switch. Sales of antibiotic-free meat jumped almost 29% annually from 2011 to 2015, compared to about 5% for conventionally raised meat, according to Nielsen. And while the retail price is often higher for meat and poultry without antibiotics, many consumers are willing to pay for it.
Meanwhile, pressures on the poultry industry have driven down Sanderson's earnings, with a 8.5% third-quarter revenue drop compared to the same period in 2017. The drop has been blamed on declining market prices and rising feed costs. The industry as a whole faces increased production and slowing demand caused by export tariffs. Agricultural analysts said more than 2.5 billion pounds of beef, pork, chicken and turkey are currently stockpiled, and U.S. domestic demand can't keep up with the supply.
Given Sanderson's overall pro-antibiotics stance, this change probably isn't the first step toward phasing out all antibiotics used in chicken production. Despite industry trends away from using them, the company seems to believe routine use — at least of those not considered medically important for humans — is the best way to limit pathogens and maintain healthy flocks. But if consumers and shareholders respond positively to their most recent change, the company might consider reversing its position in an even bigger way.
- Sanderson Farms Sanderson Farms, Inc. Announces Change in Antibiotic Use Program