Chipotle to begin using antibiotic-treated beef as supply of naturally-raised cattle diminishes

(http://www.bloomberg.com) After years of touting naturally raised meat, Chipotle Mexican Grill Inc. is changing its standards to allow beef treated with antibiotics into its restaurants amid a supply shortage.

The restaurant chain will use meat from cattle treated with antibiotics because of an illness, which it previously didn't allow. Chris Arnold, a spokesman for Chipotle, said the company still won't use beef from animals that had been given antibiotics to prevent disease and promote weight gain.

This change comes as U.S. beef production is expected to hit a 21-year low next year, threatening to raise the price of beef.

"The change was really rooted in the belief that it's not the use of antibiotics for the treatment of illness that is the problem," Arnold said later in an interview. "The problem is the copious amount of antibiotics that are used to promote growth."

Almost 100 percent of beef sold at Chipotle's restaurants last year came from naturally raised cattle, compared to about 80 percent to 85 percent this year. "Every year we need 20 to 25 percent more of everything than we did the year before, and the beef supply isn't keeping up as well," Arnold said. Despite this, he claims that the change wasn't motivated by the company's need to increase its steak supply.

Chipotle is also trying to find new cattle suppliers and is even considering using different cuts of meat in an effort to meet the demand for natural beef.

Some Chipotle diners may be worried about the company's decision to sell beef treated with antibiotics, said Bryan Elliott, an analyst at Raymond James Financial Inc. "There would seem to be a risk that a portion of their customer base would be concerned about this," he said. "And a portion of that portion could be very upset."