NL,

You are right in thinking that most of the large poultry producers are vertically integrated. They bring in grain by rail cars and have their own mills. Additives, such as minerals, or Agrastim, are mixed into the feed at the mill. However, the percentage of Agrastim is so small compared to the volume of feed, something must be done to ensure that the Agrastim is proportionately distributed throughout the feed to effectively provide the average required dosage to each bird. For that reason, Agrastim is first placed into a "pre-mix" with something like ground corn or rice hulls. The pre-mix is thoroughly mixed. Then it is added to the large batches of feed in the mill. It has been determined that this process more evenly distributes the product.

Many mineral, or other additive companies, provide "pre-mixes" to poultry integrators to be added at their mills. It is my understanding that we have several pre-mix companies providing this service for us.

As far as Pilgrim's, or any other company being "reluctant to discontinue the anti-bios", I guess it depends on whose brother-in law- of the second assistant veterinary clinician you talk to. Bioagra's sales team has had contact with nearly every large producer in the industry. We are at various stages of discussions, and every integrator is different. One "so-and-so" at one company may express an opinion, but at this point, all is nothing but rumor.

Poultry integrators are extremely resistant to change. They work on EXTREMELY thin margins. A 2-cent savings per chicken translates into millions of dollars in savings per year for one integrator, and billions, when you are looking at the industry at a whole.

There is a "scientific" bias for antibiotics that is fueled by the pharmaceutical manufacturers. The bias sees "all natural" products as "unscientific" and sees them as a step backward. Making a change to an all-natural product, like Agrastim, is counter-intuitive for vets who have been schooled with a pharmaceutical solution for almost every disease.

As the integrators continue to test and re-test, they will, in my opinion, find the savings so compelling that they will be willing to make a change. The numbers don't lie. When increased profit potential is coupled with increasing consumer demand for all-natural products, and there is increasing governmental concern over antibiotic resistance, pressure is on the industry to make the switch.

It is very clear that Tyson, for example, is working very hard to eliminate all sub-therapeutic antibiotics in production, with the exception of coccidiostats that are not related to antibiotics used in human treatment. The marketing benefits are obvious. It is now just a matter of being convinced that Agrastim makes a significant improvement to the bottom line.

Many integrators and producers of, not only broilers, but also turkeys and ducks, are continuing to test Agrastim. As tests are concluded and the numbers are favorable, the number of test subjects is increased. It takes large numbers of birds, at a profit of two to three cents, to show significant improvement to the bottom line. That, in my opinion, is beginning to happen.

The number of producers and integrators, that are currently testing, represent a significant percentage of the entire industry. If only one of the large integrators were to put 25% of their birds on Agrastim, it would require our entire production output, and result in millions of dollars in sales. The upside potential is enormous, and our sales team continues to provide product to the industry, and monitor their testing.

-zties