Meat Processing's Chickens Coming Home to Roost

German statesman Otto von Bismarck is reputed to have once remarked, "If you like laws and sausages, you should never watch either one being made." He might have added raising chickens to that list, too.

While there is a lot to be commended in modern meat processing, much of it would make the individual consumer cringe if he wasn't so separated from his food's source. There's a growing trend, however, to end some of the more egregious practices, such as gestation cages for hog farming and the use of steroid-like drugs on cattle.

Source: Wikimedia Commons.

The FDA is now calling on farmers to voluntarily limit their use of antibiotics on chickens to "medically necessary" situations because of a rising fear that the practice is leading to the development of antimicrobial resistance. Just as the overuse of herbicides and pesticides is leading to the creation of superweeds and superbugs that are resistant to the toxins -- thus requiring the creation of even stronger, more potent toxins to be spread on crops -- the overuse of antibiotics, which have the side effect of fattening up birds before slaughter, is creating a similar explosion in microbes resistant to the drugs.

While the backlash in the U.S. against producers engaging in such practices is only just beginning to grow, Yum! Brands (NYSE: YUM  ) witnessed firsthand how quickly a situation can get out of control after its KFC division in China was found to be selling chicken that received excessive levels of antibiotics, and it was discovered that the company had known about it for years and did nothing. The Chinese chicken joint suffered a year-long meltdown in sales that still hasn't abated.

Now the revolt against these artificial means of fattening animals has hit our shores as well, and companies that ignore the trend do so at their peril. Last month, Chick-fil-A said that within five years all the chicken served at its more than 1,700 restaurants will be antibiotic-free. A week later, chicken processing giant Perdue began promoting its Harvestland band of antibiotic-free chickens, while Tyson Foods (NYSE: TSN  ) has offered that choice since at least 2007. In comparison, Chipotle Mexican Grill started serving antibiotic-free meat a decade ago, but offers a more vague commitment to serve such meat "whenever possible."

Tyson, as one of the largest meat processors, has been in the forefront of many of the movements toward more humane treatment of animals, as well as healthier fare, though at times it's had to be prodded. For example, its decision to reject cattle injected with Zilmax, the Merck drug used to fatten them up before slaughter, only came about after cows were reported unable to walk anymore; other processors like Cargill and JBS had already stopped its use.

Similarly, Smithfield Foods only stopped using the similar drug ractopine after it announced it was going to sell itself to a Chinese meat processor -- such drugs are prohibited in China.

That there's a problem with chicken in the U.S. should come as no surprise. According to Pew Charitable Trusts, 7.7 million pounds of antibiotics were sold for human use in 2011; almost 30 million pounds were sold for meat and poultry production. Even the National Chicken Council, which says antibiotic-laced chicken is safe, admits perception is reality, and is working to phase out the use of antibiotics to promote growth by 2016.

The modern U.S. meat processing industry has largely avoided many of the problems that have decimated its foreign counterparts. Mad cow disease, foot and mouth disease, avian flu, and porcine epidemic diarrhea virus (PEDv) have mainly been kept to a minimum due to generally healthy practices. But we see outbreaks of these diseases becoming increasingly common -- PEDv, for example, has struck across the hog belt since first being identified here in the U.S. last year.

Whether more natural processing methods can minimize such hazards is open for debate, but it's clear that a growing percentage of the population is rejecting at least the more extreme measures the industry uses. Companies like Tyson Foods, Chick-fil-A, and others that take a proactive stance should benefit from a grateful public.

Hatching an idea for growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2862251, ~/Articles/ArticleHandler.aspx, 8/29/2014 8:05:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement