"Our evaluation of these problems is ongoing," it said.

Tyson buys about one in four of all U.S. cattle for slaughter. Reuters reported that the likely outcome of the ban will be less meat for consumers at higher prices.

"If you take Zilmax out of the equation coupled with the cattle herd at its lowest in 61 years due to last year's drought, it would mean less beef at higher prices to consumers," said Chicago-based Oak Investment Group president Joe Ocrant who also trades cattle futures at the exchange there.

Zilmax, a beta agonist, is used in the beef industry to promote weight gain and leanness in meat. It has become a popular additive and is used with an estimated 20 to 50 percent of U.S. cattle. Reuters reports that while on Zilmax, cattle can gain weight 4 percent more efficiently, adding 20 pounds or more to the average steer before it is slaughtered. Without the use of the additive, adding that extra weight to the steer would require and extra 240 pounds of feed per animal.

There are feed additive alternatives to Zilmax like Optaflexx, which Tyson has not banned, analysts noted.

"While the carcass gains are not as significant as with Zilmax, it is fair to say that cattle weights may not decline as much as some expect today," Steve Meyer, president of Paragon Economics in Des Moines, told clients is a daily newsletter. "If other packers continue to accept Zilmax-fed cattle, the overall impact ... will be more limited."

Source: Reuters