The economic potential of growth-promoting agents in beef

Profitability in beef farming, as in most other sectors of agriculture in New Zealand, is under pressure. Without having recourse to price fixing on world markets, farmers can only relieve the pressure by cost reducing or income enhancing management practices. One such practice which is widespread in most of the beef producing nations of the world, is the administration of anabolic or growth promoting agents (GPAs) to beef cattle. New Zealand farmers have had relatively limited opportunity to take advantage of this technique. Concern on the part of some importing nations, particularly within the EEC, regarding the possibility of harmful residues in meat and other tissues of animals treated with anabolic agents has prompted the New Zealand government to adopt a conservative attitude towards licensing anabolic hormones as GPAs. Some synthetic oestrogens derived from stilbene which have anabolic effects were permitted as veterinary remedies only, but these were banned outright in 1981. At present only one GPA (RALGRO®, distributed in New Zealand by Wellcome (NZ) Ltd) is fully licensed for use in New Zealand. As the concern over residues has been reduced by experience, trial results and product development, acceptance of GPAs in most countries has spread. In 1984 only Italy, the Netherlands, Greece, Algeria and the Canary Isles specifically ban imports of meat from animals treated with anabolic hormones. Section 20 of the 1983 Third Country Veterinary Directive of the EEC effectively applies the same ban to all EEC member states, but it has been suggested (McKenzie, 1983) that an EEC review of GPAs currently under way could result in a wider range of the products which are currently available being approved. The United States, which is the major purchaser of New Zealand beef, places no limitations on the production or importation of beef treated with registered GPAs. However more than half of the beef offals exported from New Zealand are destined for EEC member states. Therefore, EEC regulations pertaining to GPAs are relevant to New Zealand beef production. Two companies have recently applied to the Ministry of Agriculture and Fisheries for the right to market GPAs under license in New Zealand. These are Elanco Products (NZ) and Co., and Syntex Laboratories (NZ) Ltd., intending distributors of COMPUDOSE@ and SYNOVEX® respectively. Provisional licenses to carry out field trials have been granted, with full licensing dependent upon a satisfactory outcome of the trials, and upon the terms of any new directives which may arise from the EEC review. It therefore seems possible that a range of growth promotants will shortly be available, which may assist the New Zealand beef fanner to increase the productive capacity and profitability of his enterprise. Many of the large number of published trial results evaluating the performance of beef animals treated with growth promotants have compared the carcase returns from treated and control animals, but these trials have most often been carried out in intensive farming situations (mainly feedlots) in which at least a portion of the total dry matter (DM) consumed is in the form of high energy concentrates. In a feedlot situation, feed is a variable input. In a grazing situation, the composition and availability of feed are determined primarily by climate, season, and the area and physical capability of land, as well as by management decisions. Management of the feed resource in a feedlot does not therefore require the same judgements concerning the timing of utilisation, or distribution and interactions between different classes of livestock, as on a pastoral farm. The difference between intensive management systems and the pastoral management usually practised in New Zealand is such that economic evaluations of performance in one system may have limited application to the other. Increasing production by physiological modification of livestock, as an alternative to breeding or environmental change, is receiving increasing emphasis in New Zealand. Examples of this type of modification include the administration of growth promoting and fertility inducing compounds to farm animals. But the experience of some farmers, and some trial results indicate that realising the profits suggested by the distributors of these compounds, without adapting management policy to accommodate a change in productive capacity, can be elusive. A recent article in the New Zealand Farmer on the wide range of income effects from use of fertility inducing drugs in ewes is a case in point. The extent to which growth promotants can enhance either the productive capacity or the profitability of beef grazed from weaning to slaughter, as a secondary enterprise on a New Zealand sheep beef farm has not, to the knowledge of the author, been clearly established. This Discussion Paper is intended for farmers and people involved in agricultural extension work. It has a two fold purpose: Firstly, it identifies some of the factors which interact in determining the profitability of growth promotants as a production enhancing technique, and then tests their possible impact on a whole farm basis. Secondly, it examines the sensitivity of profits where growth promoting agents are used, to changes in one parameter affected by management policy; namely, availability of feed. It is hoped that this study will provide an illustrative example, of which the principles may be applied to other types of physiological modifier