Wednesday, 9 April 2014
Tough Times Ahead For Zilmax
Merck wants to test its new animal feed additive Zilmax by feeding it to 240,000 cattle of United States. However, they are facing strong opposition from Cargill- giant meat manufacturer, as it doesn’t want to mix animal fed with drugs. This would be the one of its kind and biggest test ever in order to re-introduce weight increasing drugs in Canada and Unites States of America. This test would cost around $500 million.
Many feedlot owners are hesitant to take a part in this drug experiment until they receive green signals from slaughterhouses to buy drug-fed cattle.
"I'd be happy to sign up, just as soon as Merck tells me who is going to pay me after they're done," said a feedlot owner in Texas. "It's been a horrible time, with the drought. I can't afford to give away a steer, let alone hundreds."
Cargill and Tyson Foods, two of the largest beef processors, were adamant in shifting grounds towards Zilmax. Both of them account for 37% of beef processing daily.
As per the Reuters report, Tyson annulled feeding Zilmax when it discovered that it results in missing hooves in cattle fed with the drug. Tyson’s officials said that they do not plan to lift the ban until Merck proves the drug to be safe. Further, they want affirmative answers from markets in Asia and other key markets for buying the products.
However, Merck was confident about the safety of Zilmax. It has also got clearance from FDA. Zilmax has been out of market since August 2013 and hence, rivals have captured considerable amount of market share.
Nonetheless, animal additive market is poised for growth in future. Allied Market Research analysts observed that global animal additive market would reach 20 billion by 2020. This is something investors would smile about.