Please ensure Javascript is enabled for purposes of website accessibility

Meat Processing's Chickens Coming Home to Roost

By Rich Duprey – Mar 3, 2014 at 3:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Use of antibiotics to fatten chickens is ruffling feathers.

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 (YUM -0.07%) 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 (TSN 0.69%) 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.

Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Chipotle Mexican Grill. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.