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Part 2: McDonald's USA beef buyer visits with Agriculture Online

Agriculture.com Staff 01/31/2006 @ 1:11pm

(Part 1 of this series can be found in the Agriculture Online Markets section.)

Following a recent interview with McDonald's USA's beef buyer and a company spokesperson, Agriculture Online presents the final segment of a two-part series on how U.S. cattle producers should view the company's 2006 sales strategy, which highlights chicken, as well as other impacts to U.S. beef interests.

Agriculture Online spoke recently with Robert Cannell, McDonald's USA's director of supply chain and leading beef buyer. Joining Cannell in a question-and-answer session is Danya Proud, McDonald's USA spokesperson.

Q: McDonald's has a huge influence on the U.S. cattle industry based on the amount of your purchases. For example, because you are such a huge beef buyer, if you support source verification it would behoove the cattle industry to comply. Does source verification have enough value to McDonald's USA? And how much would you be willing to pay per pound for source verified beef?

Cannell: Source verification is very important to us. We are out there actively working with the cattle industry, the government, all the players that have a stake in the game. It's more important for the U.S. beef industry than for McDonald's specifically. You mentioned we are a big beef buyer and that's true. But, what affects the beef industry effects us. Our perspective is this, source verification, animal ID, is an important tool in the future so the beef industry can protect itself from whatever the next issue that might come up would be. We look at source verification more as a need for the industry than a need for McDonald's.

Q: Though U.S. beef production from year to year is staying steady, producers are seeing prices for beef products stay relatively high. Chicken production is going up, but the prices of chicken products are going down. If the U.S. cattlemen raise more beef, will they see the value of their products decline?

Cannell: That's a lot of speculation when you have to rely on cattle cycles and such. Knowing where things will go is a crystal ball I wish I had.

Q: What can a U.S. cattle producer do to get more of their product sold through McDonald's USA? Should they produce more lean beef, niche beef products? What advice do you have for them?

Cannell: The bottom line is, U.S. beef is the highest quality and safest beef of any other in the world. I think U.S. producers are doing a fantastic job of producing the type of beef that either the typical U.S. consumer or our export customers are looking for. Producing beef specifically for McDonald's may not be the best proposition for anyone. We use a lot of beef, but the steaks and the roasts and what the consumer is looking for is there as well. For me to say the U.S. producer needs to be making any changes is not fair from my perspective.

Q: Statements from McDonald's on U.S. BSE firewalls has concerned the cattle industry, calling into question the safety of U.S. beef supply. The company statements may have been sparked by activists concerns, according to one cattle industry spokesman. How does McDonald's balance sound science on BSE in responding to consumers' concerns and activists' concerns?

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