South Korea halted its imports of beef from the US on Wednesday, provoking a drop in cattle futures on the Chicago Mercantile Exchange.
Futures slated for December delivery were down 0.40 percent to $131.93 per pound on the CME, as a beef shipment originating from the US and under the custody of JBS S.A. (JBSAY) was found to contain the feed supplement Zilmax.
Christian Mayer, an advisor with Northstar Commodity Investments Co. in Minneapolis, Minnesota, told Bloomberg that “South Korea has been known to be picky at times,” and predicted a fairly serious backlash.
However, two of the largest cattle processors in the US, Cargill Inc. and Tyson Foods (TSN) have also recently refused to take shipments of beef that is shown to contain the supplement, so it is not entirely clear if South Korea is having one of its occasional bouts of “picky,” or if the country’s regulators are simply adhering to the nation’s zero-tolerance laws regarding hormones in livestock.
Furthermore shipments of Zilmax, produced by pharmaceutical giant Merck & Co. (MRK) , have already been suspended by the drug-maker itself since mid-August of this year in the US and Canada, after cattle who had consumed feed containing the supplement displayed great difficulty walking or even just standing.
With December futures down, Merck was also off by about 1.2 percent in midday trading to $47.20, while Tyson Foods was up over 2 percent to $28.90 per share.
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