Meat processors like Tyson Foods Inc. (TSN - Analyst Report) will have to eliminate the use of antibiotics on their livestock following a voluntary guideline issued by the U.S. Food and Drug Administration (FDA). According to the rule, the food processors should gradually phase out the use of antibiotics, used to enhance growth of their livestock.
The regulatory watchdog has given a 90-day grace period to the meat producers to let the authority know if they will comply with the rule. The meat processors will get three years to completely phase out the use of antibiotics on their livestock.
Some of the antibiotics which are injected to the livestocks are also administered to humans to treat infections. As a result, humans who consume the antibiotic-treated meat products become antibiotic resistant and they do not react to the medicine when they are infected.
The FDA feels that the antibiotics have been overused by meat processors for more than half a century. The FDA ruling will also require drug manufacturers to stop listing certain antibiotics as effective in promoting animal growth. Henceforth, farmers would require to present prescriptions from veterinarians for purchasing any antibiotic to ensure proper usage of the drugs.
Most restaurants like McDonald's Corp. (MCD - Analyst Report) , The Wendy’s Company (WEN - Analyst Report) and Yum! Brands Inc.'s (YUM - Analyst Report) KFC have stopped purchasing meat of animals that were given antibiotics for non-therapeutic uses.
Tyson has already started reducing the use of growth-enhancing antibiotics on its livestock. In early 2013, it launched 100% antibiotic-free Nature Raised Farms brand. It has further enhanced the brand with the addition of a line frozen products — Individually Quick Frozen.
Tyson claims that live poultry operations use only FDA-approved pharmaceutical compounds. They may include antibiotics that are administered under the direction of a licensed veterinarian in compliance with the FDA protocols. The Zacks Rank #3 (Hold) meat processor, however, promises to become more responsible in the use of antibiotics in its conventional meat products.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »