By Tom Polansek
CHICAGO (Reuters) - Sanderson Farms Inc (O:SAFM) by March will stop using antibiotics vital to fighting human infections to prevent diseases in chickens, the company said on Friday, becoming the last major chicken producer to step away from the drugs.
The move by the third largest U.S. poultry producer addresses concerns that the overuse of antibiotics in chickens may diminish their effectiveness in fighting disease in people.
It is a turnaround for Sanderson Farms, which has run commercials defending its use of antibiotics and fended off shareholder proposals advising it to curb use of the drugs.
Sanderson shares were up 1.6 percent at $114.50.
"Sanderson Farms is late to the game, but better late than never," said Matt Wellington, director of the antibiotics program for U.S. PIRG, a public interest group.
Laurel, Mississippi-based Sanderson Farms decided to halt its use of antibiotics for disease prevention after commissioning an independent study of its production practices. It found that change "could represent a responsible compromise to better preserve efficacy of antibiotics important for human health," according to a company statement.
Chief Financial Officer Mike Cockrell declined in an interview to say how much the change would cost.
Sanderson Farms will stop using an antibiotic called gentamicin to keep chicks healthy in its hatcheries and another called virginiamycin in its feed.
Eliminating gentamicin will increase the mortality rate for baby chicks in their first week of life, Cockrell said, adding that the company will work to reduce the losses.
Scientists from the World Health Organization and other groups have warned that the use of antibiotics to promote growth and prevent illness in healthy farm animals contributes to the rise of dangerous antibiotic-resistant "superbug" infections, which kill at least 23,000 Americans each year.
Sanderson Farms will still use antibiotics to treat and control diseases.
Cockrell said there is no science linking the use of antibiotics in farm animals to antibiotic-resistance in humans. The company decided to change its practices amid worries about such a link, though, he said.
Sanderson Farms can offset some of the costs of increased mortality in chicks by cutting back on marketing campaigns that explained the company's use of antibiotics, said Jeremy Scott, an analyst at Mizuho.
"It's a big pivot for the company," Scott said.
U.S. meat company Tyson Foods Inc (N:TSN) has stopped using antibiotics to produce its retail line of chicken. All chicken sold under the Perdue Farms brand is also from flocks that have never been given antibiotics, according to the company.