| CHICAGO, Sept 23
CHICAGO, Sept 23 The Chicago Mercantile Exchange
will no longer accept delivery of cattle fed the growth additive
Zilmax on Oct. 7 to conform with exchange guidelines for
deliveries against CME live cattle futures, said CME in a
statement on Monday.
The guideline will be implemented beginning with October
deliveries on Oct. 7, the CME managing director of Commodity
Research and Product Development, David Lehman, told Reuters on
"We are letting the market know these Zilmax cattle no
longer are merchantable in our view from a contract
specification perspective because they will not be accepted by a
majority of our approved slaughterhouses," Lehman said.
The exchange based its decision after two major packers
discontinued purchases of Zilmax-fed cattle, with the
possibility that others may follow suit, the exchange said.
Tyson Foods Inc, the country's biggest meat
processor, in August informed cattle feeders it would not buy
Zilmax-fed cattle after Sept. 6 amid worries about cases of
cattle with difficulty walking.
Cargill Inc, the United States' third largest meat
producer, on Sep. 30 halted purchases of cattle given the
Although there was no direct link to use of Zilmax, focus on
the additive prompted manufacturer Merck and Co to
suspend Zilmax sales in Canada and the United States to conduct
Terms of CME's live cattle futures require that cattle
received during the delivery process be "merchantable" (or
healthy and not crippled or sick) and readily salable into
normal commercial marketing channels.
"This notice clarifies that cattle which have been fed
additives which prohibit them from being purchased for slaughter
under current commercial practices imposed by major cattle
slaughter facilities are unmerchantable and are to be excluded
from the delivery unit," according to the exchange's statement.