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Sanderson Farms gears up for vote on antibiotic-free chicken

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Top officials with Sanderson Farms Inc. are recommending shareholders reject a vote to switch to antibiotic-free (ABF) chicken next month, insisting there’s an oversupply of ABF chicken, the change would prove too costly and studies show these policies do little to reduce the threat of antibiotic resistance. 

As You Sow is spearheading the Feb. 15 vote at the next shareholder meeting, asking the third largest poultry producer to phase out the use of medically important antibiotics for disease prevention, the company reported in Jan. 16 filings with the Securities Exchange Commission (SEC).

“Shareholders request that Sanderson Farms adopt an enterprise-wide policy to phase out the use of medically important antibiotics for disease prevention in its supply chain. Shareholders further request the company publish timetables and measures for implementing this policy,” the proxy statement said.

But Sanderson Farms said the policy should be rejected as its board of directors is monitoring this issue and that any production changes should be made by company management.

The poultry company suggested there’s market saturation of ABF chicken as another reason against the move.

Sanderson Farms remains the only major company not to pledge to curb the use of medically important antibiotics. Tyson Foods and Perdue Farms have eliminated certain antibiotics, and major restaurant chains have adopted policies to supply only ABF chicken.

“ABF products are more expensive to produce and appeal primarily to shoppers at high-end specialty stores,” Sanderson Farms said. “We do not market our product to these kinds of stores or to restaurants that have adopted ABF menu items. Further, we believe the market for ABF products is currently oversupplied, and supply and demand dynamics have worsened,” the proxy statement said.

Sanderson Farms said it does market to retail grocery stores and the big bird deboning market, both of which have a small percentage of ABF sales.

If the proposal passes, the change would prove costly since withholding antibiotics leads to higher bird mortality rates, requires more feed as they are grown to produce the same supply of processed meat, and would undermine Sanderson Farms’ sustainability efforts, top officials stated.

“Moreover, scientific studies on bans of antibiotics in food animals have concluded that such bans have not decreased antibiotic resistance in humans.”

This is not the first time the company has faced a shareholder demand for antibiotic policy changes.

As You Sow pushed for action in 2016 and received only 30% of the vote.

The group is more optimistic a policy can pass this time around, however, and the poultry company said it has developed a contingency plan to transition operations to ABF within a year if shareholders approve the change.

Sanderson Farms is also fighting a legal challenge from advocacy groups alleging their products should not be able to use the “100% Natural” claim because they contain certain antibiotics.

And the company was told by the National Advertising Division (NAD) last year to stop advertising that “raised without antibiotics” claims on product labels is a marketing gimmick.

 

  

 

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