It has the potential to become one of the more vigorous and divisive debates seen in the Australian beef industry in years.
At some point soon, Australia is likely to have to make some tough decisions about whether it supports the adoption of the use of the growth-promoting productivity tools, beta agonists, within the beef industry.
In this special report, Beef Central can confirm that global animal health company MSD (Australian business division, Coopers) has lodged an application seeking the registration for the use of its beta agonist product, Zilmax, for use in beef cattle in Australia.
The key issue boils down to weighing up the considerable productivity benefits that stand to be gained by using beta agonists in Australian grainfed production systems, against the potential impact on international market access for Australian beef.
There is no doubt that beta agonists produce colossal performance gains in intensively fed cattle. In the US, where the products have been registered for use since 2006, somewhere between 70pc and 90pc of fed steers and heifers receive the compounds in their ration.
Uptake in the US was modest in the first few years after registration, but processors are now actively ‘pulling the product through’ the supply chain, a source close to the Australian Zilmax registration application told Beef Central.
Why? In no small way, beta agonists have heavily underpinned recent US domestic beef supply. In recent discussions with Beef Central, industry analyst Len Steiner identified the use of beta agonists as a critical reason why the US beef industry had been able to maintain such high volume production levels, despite a national herd size that has collapsed to 40-year lows.
An advocate for the introduction of beta agonists for beef production in Australia says the accumulated benefit at both feedlot and abattoir level (discussed in greater detail elsewhere in this special report) could amount to $60-$70 in extra value per animal.
MSD lodged its registration application for Zilmax several months ago, but the slow process could easily take another 12-18 months to finalise. That allows plenty of time for Australian industry stakeholder groups across all sectors to have a look at the implications, and have input into the registration process, it’s backers say. Other interest groups including retailers and consumer groups will apparently also be consulted.
It is understood that the process is currently moving from a ‘preliminary screening’ stage to the start of full Australian Pesticides and Veterinary Medicines Authority (APVMA) review.
That process will involve detailed scrutiny not only of the human health aspects associated with Zilmax, but also animal welfare, environmental and perhaps most crucially, potential impacts on Australia’s international trade access.
Another animal health company, Elanco, is understood to have started an Australian registration application for its Optaflexx beta agonist product earlier, before discontinuing it. There is some industry speculation that that process may now re-activate.
Behind the scenes, industry leaders have already acknowledged the potentially explosive nature of the discussion that lies ahead. Divergent views could well emerge not only between sectors, but within sectors, discussions with senior industry stakeholders suggest.
“The opportunity to use beta agonists in grainfed beef will not suit all Australian supply chains, but the intention is to make it available for those that wish to take advantage of its benefits. The systems are already in place to ensure that users would not put at risk any of Australia’s hard-won export beef markets,” a source close to the registration process said.
The Australian pork industry already has access to a beta agonist product, Paylean (based on ractopamine, the cattle equivalent used in the US being Optaflexx).
However the trade access implications are far broader for the Australian beef industry than for pork, because close to 70pc of Australian beef ends up in export markets, while pork exports are very limited. And crucially, some significant – potentially enormous – beef export markets will not accept imported beef from cattle treated with the compound.
Currently, total bans apply, or have applied, on US beef exports to Russia, Taiwan and the EU because of the possibility it contains beta agonist. China also bans the use of beta agonists, although its current total ban on US beef is based primarily on food safety concerns surrounding BSE.
Since March 1, China has required a third-party verification that US pork entering the country is free of beta agonist. In the past, US pork has been refused entry when trace amounts have been found. In total, some 160 countries worldwide do not support the use of the compounds.
Taiwan has since lifted its US ban, while applying an MRL (maximum residue limit). Japan and Korea are going through the same process.
International standards agency Codex last July adopted Maximum Residue Limits (MRLs) for ractopamine following lengthy debate and a narrow 69-67 vote by member countries. However US consumer lobby groups including the Centre for Food Safety have filed citizens’ petitions asking the US Food and Drug Administration to review the recently-adopted Codex standards for beta agonist MRLs.
Despite the Codex approval, the EU, Russia and China have all vowed to continue their bans on the feed additive.
It’s not over-stating the point to say that Australia has received enormous benefit in international trade over the past two years because of bans placed on US and other exporting countries that permit beta agonist use. Australia’s exports to Russia, China and the EU have all surged, mostly at the expense of the US.
Unlike the US pork industry, most US beef suppliers could not supply ractopamine-free beef, US analyst Len Steiner suggested recently. “China has now become the fourth largest buyer of Australian beef, with Australian shipments there up 35-fold compared to a year ago,” he pointed out.
Beef Central’s monthly columnist Steve Kay, writing earlier this year in his industry newsletter, US Cattle Buyers Weekly, suggested that Russia’s market access bans imposed from February 11 had by May cost the US livestock industry US$155 million. USDA estimates apportioned US$97m of that to lost US beef export value and US$58m in lost pork exports. Russia was previously a $550m a year market for US meat.
Russia has also threatened to ban imports from Mexico and other beta agonist-using beef export countries including Canada and Brazil, because it believes they, also, cannot guarantee supply of product free of the compound. It has been widely interpreted that Russia’s ban is motivated far more by protectionism than by any abiding concern for the well-being of Russia’s citizens, however.
Importantly, US commentators at the time Russia imposed its February 11 ban said that US producers would continue to use the feed additives, because “the economic benefit of using them (in the US beef production system) far outweighs the loss in value of exports to Russia.”
Agriculture departments in the US and Canada have said they have no intention of starting beta agonist-free certification programs in beef. It would take tens of millions of dollars to institute large-scale segregation of carcases exposed to the compound from those that were not, authorities said. US packers would have to completely reconfigure their plants, which most would not be prepared to do, just to be able to ship to Russia.
Some observers say a beta agonist ban in the EU could begin to resemble its 25-year ban on the use of HGPs – which remains in place even after the World Trade Organisation ruled in favour of the US and Canada’s claim that HGPs are safe, and that the ban should be lifted. A similar scenario might play out with the EU and Russia over ractopamine bans, even if the US at some point wins a WTO case over their safety.
Key arguments against adoption
Early reaction to the prospect of registration of beta agonists in Australia has been mixed, with some stakeholders absolutely opposed to their introduction, and others strongly in support.
In essence, the debate comes down to simple cost versus benefit: does the potential productivity/competitiveness advantage in using the additives outweigh the perceived risk in market access, compromised tenderness, and harming Australia’s clean & green status?
Some large stakeholders, including the Australian Lot Feeders Association, are yet to form a policy on their use. Even within the feedlot sector, which stands to benefit most directly from beta agonist adoption, opinions appear to be divergent.
At least part of that may be explained by feedlots that are part of vertically-integrated export supply chains holding a somewhat different view than those that are dedicated to custom-feeding for external clients, for example.
The Australian Meat Industry Council, representing export and domestic processors, has an official policy opposed to the introduction of the feed additives, on the basis of market access risk.
Cattle Council of Australia plans to discuss the beta agonist issue at its council meeting next month. ALFA members will receive a briefing at their upcoming BeefWorks technical seminar near Toowoomba.
The main concerns raised by opponents to the introduction of beta agonists to Australia, and the responses from advocates are outlined below:
As described in the introduction to this report, there are market access issues in importing countries like Russia, China and the EU, which either ban the importation of beef produced using the additives, or have outright bans on beef-producing countries that use them.
Even within the Australian domestic market, it is questionable whether Coles, and perhaps also Woolworths, would support their use. Coles has already banned Paylean (ractopamine) in its pork supply chain, but unlike HGP, has made little noise about it.
Advocates say Australia has proved in discerning and closely-scrutinised markets like the EU that it can successful partition non-HGP EU-accredited cattle and manage them effectively through the supply chain. A similar process would be applied for beta agonist treated/free cattle, to allow Australia to continue to service international markets that do not accept treated beef, while also gaining the productivity benefits of providing the additive to other grainfed cattle. Unlike the US which has no mandated individual animal traceability system, Australia’s NLIS would play a strong role in achieving that.
Canada, Mexico and Brazil – which all permit the use of beta agonists – are putting management programs in place in order to regain access to the Russian export market.
One suggestion is that the commercial beta agonist products if released in Australia would only be made available for sale to NFAS registered feedlots, already heavily underpinned by quality assurance and audit procedures.
The initiators of the registration process are going to considerable lengths to ensure there are robust systems are designed to manage the use of beta agonists in Australian supply chains, before the broader industry scrutiny gains momentum.
Australia’s export market dependence:
While beta agonists are widely used in the US beef industry, the US is nowhere near as heavily trade-exposed as Australia is, exporting just 10pc of its beef production compared with Australia’s 70pc. That means decisions over the use of beta agonists in the US are coloured far more by domestic market acceptance, than any views held by export customers, opponents point out.
Adding to that, the days of Australian exporters selling grassfed or grainfed fullsets to Japan are long gone. Body parts are broken up and separated, heading in a multitude of directions. That trend would add enormous difficulty in overlaying a beta-agonist management program in Australia, critics say.
The counter-point to that is that industries using beta agonists overseas – the pork industry in the US is a good example – appear to successfully segregate treated and non-treated carcases to the satisfaction of international customers.
Damaging Australia’s clean & green image:
The introduction of beta agonists would generally undermine Australia’s ‘clean and green’ status in world markets, critics suggest. Advocates for Zilmax introduction say the concerns about damaging that ‘image’ are unfounded. Beta agonists came out of human medicine, and there is no scientific evidence that they are harmful to humans. If the product is used within its MRL, a human would have to eat 3.5 tonnes of beta agonist-fed beef to absorb the same amount of the compound that a child with asthma would, if used as a therapeutic human drug. A little like the GM crop debate, where consumer perceptions are changing over time, perceptions about beta agonists will do the same, advocates say.
Impact on meat quality:
There is no question that the use of beta agonists negatively impacts on meat quality via reduced tenderness and marbling. By nature of its action in enlarging the diameter of muscle fibres, Zilmax produces somewhat higher degrees of toughness in laboratory shear-force testing.
However the critical point is that highly credible research work at Texas Tech University and elsewhere suggests that most of that tenderness difference dissipates through the ageing process. US tests showed after 14 days ageing that the impact diminishes significantly – to the extent that consumers cannot pick it, and it can only be observed at laboratory level. USDA reports also suggest there has been little or no impact on US beef tenderness, generally, that can be attributed directly to beta agonist use.
MSD is considering commissioning MSA consumer taste test trials in Australia, in advance of the product registration process to see if this result is replicated under Australian conditions.
Potential impacts on animal welfare:
There has been some international discussion about potential animal welfare impacts. For example, in a self-authored article, “Heat Stress and Lameness in Fed Feedlot Cattle is Detrimental to Animal Welfare”, Dr Temple Grandin suggests that a heat stress episode she observed in indicus-infused feedlot cattle in the US was likely to be linked to bulking-up as a result of beta agonist use.
Key arguments for adoption:
Advocates for the use of beta agonists present a set of equally strong and well-argued facts to build a case for adoption, however:
Improved carcase weight, yield:
Class 2 beta agonists typically produce 6-8kg liveweight gain, and 10-14kg carcase weight gain over non-treated control animals, independent trials show. Carcase meat yield typically improves by 1.25-1.5pc. Discussing the impact of beta agonists in the US recently, US analyst Len Steiner said US cattle carcase weights exploded last year, in part due to the increased use of beta agonists.
Australia is giving away a huge competitive advantage in productivity loss against the US grainfed beef industry in international markets like Japan and Korea in not having access to beta agonists. Productivity gains of $60-$70 per animal are possible, through live weight and carcase weight improvements, leanness, feed conversion and meat yield listed above.
No evidence of human health issues:
In a similar vein to HGP bans in the EU, there appears to be no scientific basis for bans on beta agonists on human health grounds.
Better environmental outcomes:
In terms of environmental impact, advocates point to the efficiencies in production outlined above, as evidence of more beef being produced from less grain, less water and producing less carbon GHG footprint. Like HGPs, beta agonist manufacturers suggest there is an environmental dividend in their use.
Since the Australian registration application was initiated, MSD has started a process of engagement and education across key stakeholders within the Australian beef supply chain. It would be unfair to suggest that the company is simply ‘standing at the feedlot gate, trying to sell product,’ one key feedlot sector stakeholder told Beef Central.
- An explanation of beta agonists and how they work can be accessed here.