REFILE-UPDATE 3-South Korea suspends some U.S. beef imports over feed additive
* South Korea says detects zilpaterol in U.S. beef
* Halts some U.S. beef imports from unit of JBS USA
* A blanket ban in place on feed additives in Asia, Europe
* Concerns about how growth enhancer entered supply chain
SEOUL/CHICAGO Oct 9 (Reuters) - South Korea has suspended some U.S. beef imports after detecting the cattle feed additive zilpaterol in meat supplied by a unit of JBS USA, raising concerns that the controversial animal growth enhancer may still be in the supply chain weeks after Merck & Co halted sales of Zilmax, the top-selling zilpaterol-based drug.
The South Korean claim of zilpaterol-tainted beef is the first to come to light since Merck suspended sales of Zilmax on Aug. 16 amidst concerns about its impact on the health of cattle. However, a Merck spokeswoman told Reuters the company has not recalled supplies of Zilmax already on the market at the time it suspended sales, so it is possible some cattle feeders still are dispensing Zilmax to their animals.
"Our decision to temporarily suspend Zilmax in the U.S. and Canada did not require that customers return product to us," said Merck spokeswoman Pam Eisele in an email to Reuters.
Eisele noted that the Food and Drug Administration and other worldwide regulatory agencies have reviewed comprehensive data on the use of Zilmax in cattle and concluded that, when used according to label directions, the beef from cattle fed Zilmax is safe to eat and poses no safety risk to humans.
Zilmax, which contains the active ingredient zilpaterol, is given to cattle during the last few weeks they are in feedlots and has a three-day withdrawal period before the animal is slaughtered. Unwanted residue of the drug could linger if those guidelines are not properly adhered to, livestock economists said.
Some veterinareans have said trace amounts of zilpaterol linger longer in organs, such as kidney and lungs, which are not popular in the United States but are widely consumed in Korea and other Asian countries.
South Korea is among a number of Asian countries, including China, that ban feed additives such as zilpaterol due to concerns about the side effects of these drugs. Many European countries also ban the import of zilpaterol-fed beef. However, South Korea does accept imports of beef fed with a related variety of beta-agonist drug, ractopamine.
A JBS spokesman and the U.S. Department of Agriculture could not immediately be reached for comment about the finding from South Korea.
It is rare for importers to accidentally receive meat that is fed with unwanted drugs because meat packers and processors have "hugely controlled programs" to separate different meats destined for customers with different requirements, said Keith Belk, a professor at the Center For Meat Safety and Quality at Colorado State University.
"These are all auditable programs," he said. "It would be pretty rare for them to mislabel a box."
If South Korea received meat from cattle that should not have been fed zilpaterol, "somebody screwed up," Belk said.
The South Korea action came amidst a government shutdown that has led to uncertain trading activity in livestock markets, and response in the Chicago Mercantile Exchange live cattle market was subdued.
Traders this week have mainly focused on the ongoing partial U.S. government shutdown in which U.S. Department of Agriculture livestock price information, which is crucial for producers and packers to price hogs and cattle and for investors making trading decisions.
At 11:58 a.m. CDT (1658 GMT) CME live cattle futures for October delivery were down 0.325 cent per lb 127.950 cents, and up from an early morning low of 127.850 cents.
"That's (South Korea) a secondary issue. The government shutdown and fallout from the debt ceiling situations, which could hurt beef demand, are responsible for the weakness in the market right now," said Rich Nelson, chief strategist with Allendale, Inc in McHenry, Ill.
Feed additives have been under the spotlight since a video appeared in the United States in August, showing animals struggling to walk and with other signs of distress after taking a growth drug.
South Korea's food ministry said it had halted imports from a work site at Swift Beef Co, a unit of food processing firm JBS USA Holdings Inc, and asked the United States to investigate the cause of the contamination which was found in 22 tonnes of meat.
The ministry said it had strengthened scrutiny of U.S. beef since Taiwan had also detected zilpaterol in U.S. beef last month.
Taiwan's Food and Drug Administration said it had asked the importer of the contaminated cargo to destroy or send back the meat.
"As of now, we don't clearly know when we will complete examining U.S. beef from Swift Beef Co. We plan to inspect all of the meat from the company," said Ahn Man-ho, vice spokesman for the food ministry in Seoul.
"If we find further zilpaterol in U.S. beef or in any other meat, we will take a similar action."
Brandon Depenbusch, who oversees research for Innovative Livestock Services, which runs feed yards in Kansas and Nebraska said Zilpaterol residue is more likely to be found in so-called variety meats, like organ meat, than in prime cuts.
"If they did find it, it would probably be in those variety meats," he said. "That would be easier for me to swallow. It'll be more concentrated in the liver or kidney."
Depenbusch said that according to Merck, zilpaterol detected in South Korea was 10 to 20 times less than what the FDA has established as safe in the United States.
Sterling Smith, a Citigroup futures specialist in Chicago, said South Korea has a long-standing reputation for being particular about its food supply, particularly with regard to feed additives and vaccines.
"Any sort of additive, they've always been very quick to push the button when they've had a problem with imports of that," said Smith.
Because this was specific to one particular company and a specific unit of the company, it is possible that they (South Korea) would replenish that product from another JBS plant or buy it from one of their competitors, he said.
South Korea imported 75,426 tonnes of U.S. beef from January to September, with 4,697 tonnes coming from Swift Beef.
PRESSURE TO CURB ADDITIVES
Merck on Aug. 16 suspended sales of its highly popular Zilmax drug while it carried out an audit of how it was being used in cattle. Merck said it remained confident in the safety of the product, which had sales of $159 million last year in the United States and Canada.
U.S. meat producers will have to shun additives to stimulate growth if they want a bigger stake in the fast-expanding market in Asia, industry officials say.
"China will not change its stance on lean-meat drugs," said Kong Pingtao, deputy secretary general of the Chinese Association of Animal Science and Veterinary Medicine in Beijing.
The withdrawal of Zilmax in the United States was also likely to make it more difficult for Merck to convince livestock farmers in Australia, the world's No. 3 beef exporter, to use the product. China is a large market for Australia-raised beef.