Beef’s Meaty Profits Slow Effort to Boost Antibiotic-Free Production

Oregon cattleman Gary Bailey says business at his ranch has thrived in recent years thanks to growing consumer hunger for meat produced without antibiotics. But the 36-year-old has struggled in another role: recruiting fellow ranchers to leave the conventional beef market and join his rancher cooperative, Country Natural Beef, a supplier to Whole Foods Market Inc. Many of those conventional ranchers are already earning some of their biggest-ever profits. “With a real strong market like that, there’s just no advantage to going to a natural program,” says Tim Knuths, 56, a Madras, Ore., rancher who has rebuffed Mr. Bailey’s entreaties. The reluctance illustrates how sky-high cattle and beef prices are hampering efforts to get the beef industry to follow the sharp curbs by major chicken processors on the use of antibiotics on farms. Health and consumer groups as well as U.S. government agencies say widespread use of antibiotics in both human and animal medicine has hastened the development of antibiotic-resistant bacteria, posing risks to human health. With more consumers heeding those warnings, companies are increasingly eager to supply antibiotic-free meat. Tyson Foods Inc. and Perdue Farms Inc. are producing more antibiotic-free chicken, and McDonald’s Corp. announced in March plans to broadly curtail antibiotic use in its U.S. poultry. But changing antibiotics protocols is tougher in the beef business, livestock specialists say. Beef cattle typically live one to two years before slaughter, providing more time for disease exposure than for chickens, which often live only six weeks. Beef processors also generally have less control over how animals are raised. They typically buy cattle from a wide range of producers and middlemen, while major chicken processors sign growers to contracts to supply them alone. And financial incentives for cattle ranchers to switch to natural production haven’t been strong because prices for conventional cattle and beef have surged in recent years, driven by prolonged drought in the Southern Plains that shrank the nation’s herd in 2014 to its smallest in six decades. Natural, organic or grass-fed beef varieties—all of which are antibiotic-free—fetch more money, retailing for 30% to 80% more per pound than conventional meat. But ranchers also typically face greater costs and paperwork, and must undergo audits to demonstrate they adhere to animal-welfare, sustainability and other standards required by beef buyers or federal labeling rules...more (Subscription)