Study: Discontinuing antibiotics could cost cattle industry billions
- Eliminating metaphylaxis, or the mass administration of medicine to high health-risk cattle to eradicate or minimize disease outbreak, could cost the U.S. cattle industry as much as $1.8 billion annually, according to a study done by Kansas State University agricultural economists and veterinary medicine faculty.
- This treatment is used by 59% of U.S. feedlots for 20.5% of all cattle placed on feed, according to the U.S. Department of Agriculture.
- “We found that if metaphylaxis was not available for high health-risk cattle, it would reduce industry gross revenue by about 1%,” said Elliott Dennis, a Kansas State doctoral student who worked on the study. “That’s a sizable amount if metaphylaxis was not allowed to be used in feedlots on high health-risk cattle.”
Through the years, consumers’ insistence on clean labels has made its way into the protein market. As companies race to phase out the use of antibiotics, the cattle industry is giving pause to consider the financial ramifications of meeting this shopper demand.
Sales of antibiotic-free meat jumped almost 29% annually from 2011 to 2015, compared to about 5% for conventionally raised meat, according to Nielsen. From 2016 to 2017, that figure increased dramatically with the sales of no-antibiotics-ever meat growing 45% — while conventional meat grew 10%. This increase coincided with the Food and Drug Administration’s choice to ban the use of antibiotics solely for animal growth promotion.
While the retail price is often higher for meat and poultry without antibiotics, many consumers are willing to pay it. According to IRI, more than 30% of consumers say claims that food items are free of antibiotics, do not contain growth hormones and are pesticide- and fertilizer-free are important when making a purchase.
The concern about antibiotics stems largely from the reality that bacteria can become resistant to the antibiotic designed to kill it. When people consume or handle meat or poultry with resistant bacteria, they can become infected, and the traditional course of antibiotics may not be effective.
The industry has taken notice. The number of antibiotics and other antimicrobials used in food animals decreased in 2016, according to an annual report by the Food and Drug Administration. This marks the first decrease since the agency began reviewing how disease-fighting agents are used in cattle, swine, poultry and other products in the U.S.
Unfortunately, even with consumers paying higher prices, the cattle industry may not be able to recoup from the almost $2 billion financial strain that eliminating antibiotic usage would cause. In an industry where money is made by the pounds of meat sold, the 3% weight gain that small doses of antibiotics made was revolutionary. So not only does removing antibiotics from the daily routine make animals smaller, but discontinuing the use of antimicrobial drugs decreases feed efficiency, reduces production and raises prices for consumers.
However, if the cattle industry doesn’t comply with consumer demands, they may risk losing customers to companies like Tyson, JBS, Pilgrim’s Pride, Cargill and Perdue Farms, which have taken major steps to eliminate routine antibiotic use. Some customers may even move to plant-based protein which, with improvements in texture and taste, has become a burgeoning market.
Already the cattle industry has faced a 19% decline in beef consumption between 2005 and 2014, according to the Natural Resources Defense Council. In a survey conducted by Mintel in January 2017, more than a third of consumers cited price as the reason they ate less beef. Another 35% said they were eating other proteins, and more than a quarter cited health reasons.
If price is already in question, perhaps the cattle industry should take a page out of Sanderson Farms’ playbook — not just continuing to use antibiotics, but leading a frank discussion of the reasons behind this choice. Removing antibiotics from the equation and raising prices even further may be a difficult — if not destructive — pill to swallow for the industry.