CEO says they’re watching the drought in California

Could the drought in California affect the price of your Big Mac?  Possibly.

Like many food companies of its kind, McDonald’s doesn’t own its food suppliers.  President and CEO Don Thompson says they rely in individual suppliers for their products.  One of the benefits of that, he says, is they can utilize their information on the drought situation.  “Typically we will do some commodity purchases ahead of time from a fixed contract perspective to try to have some of our supply levels met that we’re going to need in a year like 2014,” he says.  “In the critical areas like corn, soybeans, some of the feed based areas, and some of the dairy areas we do have some of the contracts formed.”

So how does that impact the company’s supply chain cost?  “We do some hedging from a fixed cost contract perspective to make sure that we have as much as of a consistent price level that we can,” he says.  “Then we’ll look to see what that means in terms of an increase as we move forward.  Right now we’ve estimated that our US food costs will be up somewhere between 1 and 2 percent on the year.”

From there, Thompson says it’s a little bit of a “wait and see” as to what happens with yields and production for individual crops.

McDonald’s exec discusses ‘sustainability’

langert-bob-mcdonalds-2McDonalds’ recent announcement that it plans to start purchasing verified sustainable beef by 2016 raised some eyebrows in the beef industry.  The individual in charge of social responsibility and sustainability for McDonald’s, Bob Langert, discussed those plans today at the Cattle Industry Convention in Nashville.  Following his presentation, Brownfield’s Ken Anderson visited with Langert about the company’s sustainability efforts and how they might impact cattlemen.

AUDIO: Bob Langert (12:52 MP3)

McDonald’s CEO shares farm visit experience

As McDonald’s Corporation works on their sustainability plans moving forward, president and CEO Don Thompson takes a hands on approach to learning about the animal husbandry practices used by some of their suppliers.

Following his keynote at this weekend’s Purdue Ag Alumni Fish Fry, Thompson talked about his visit to a beef farm in Ireland.  “Last year, I was over in Ireland with the Minister of Agriculture over there and we visited one of our (McDonald’s) farmers,” he says.  “In that case, we were walking around looking at the cattle and looking at the herd and looking at some of the ways the producer is moving forward and the responsibilities and relationships that the Irish government has with their farmers and NGO’s (Non-Governmental Organizations). It was pretty special.”

He says they try to utilize those relationships.  “What we’re also trying to do is capture some of those learnings and see if we can help lead some of the countries that don’t have the relationships that they have forward,” he says.  “What that does is pull in the farmers.”

After sharing his experience in Ireland with US cattle producers, Thompson says he was invited to visit US ranches and looks forward to doing so later this year.

AUDIO: Don Thompson, McDonald’s Corporation (1:17mp3)

McDonald’s CEO says farmers are part of the conversation

McDonald's president and CEO Don Thompson speaks at the 2014 Purdue Ag Alumni Fish Fry.McDonald’s president and CEO Don Thompson says there are three trends that are driving their business today.  Those are transparency, food quality, and sustainability.

Earlier this year, McDonald’s announced by the year 2016 they planned to only purchase “verified sustainable beef”.

As they work on their “Global Roundtable for Sustainable Beef,” Thompson says the best way to address the issue is to bring all parties to the table.  “The shots across the bow just don’t do anything,” he says.  “If we want to make substantial change and really move forward in sustainability – and for us, really focusing on as we talked about today, the strategic sourcing aspect of it, the food quality and transparency levels of it – if we want to move all of those things forward, it’s going to take all of us sitting at the table.”

He tells Brownfield farmers are a large part of that conversation, too.  “In the UK today, we have a much deeper down into the farm, farm education program,” he says.  “We’re really doing some things.  We’ve almost, I don’t want to say adopted farmers and farms, but it’s at that level where the interaction is that strong.  For some of the other markets, a market like the US, we really leverage some of our suppliers and producers and their relationships with local farmers.”

Thompson made his remarks at the Purdue Ag Alumni Fish Fry on Saturday.

AUDIO: Don Thompson, McDonald’s CEO (4:00mp3)

McDonald’s CEO to speak at annual Fish Fry

President and CEO of McDonald’s Corporation Don Thompson will be the featured speaker at the 2014 Purdue Agricultural Alumni Association Fish Fry.  Thompson, a Purdue alumnus will speak about the path he took from a Purdue engineer graduate to his current position, leading the world’s largest food service company.

Jay Akridge, Dean of Purdue Agriculture says they are very excited to have Thompson as the featured speaker.  “He is an exceptional leader, a Boilermaker, a member of our Board of Trustees and CEO of the world’s leading food service retailer,” he says.  “His message will be one our College of Agriculture alumni, friends, and stakeholders won’t want to miss.”

The annual Purdue Agricultural Alumni Association Fish Fry is February 1, 2014 at the Marsh Blue Ribbon Pavilion on the Indiana State Fairgrounds.  Tickets are $25 and go on sale November 1st.

A link to the order form can be found HERE.

 

 

McDonalds says “Thank You”

McDonalds has been running these billboards, as well as “thank you” newspaper and radio ads, in Iowa and Nebraska this summer. This billboard sits along Interstates 35-80 in Des Moines.

Iowa McDonalds billboard 7-13

(Photo courtesy of the Iowa Soybean Association)

 

McDonald’s releases gestation stall plan

McDonald’s has announced a ten-year plan to work with pork suppliers to phase out of the use of gestation stalls in its U.S. pork supply.

The fast food giant says its plan is to source all pork for its U.S. business from producers that do not house pregnant sows in gestation stalls by the end of 2022.

As an interim step, by 2017, McDonald’s says it will only buy pork from producers who “share (our) commitment to phase out gestation stalls.”  The company says it will work with producers and suppliers to develop needed traceability systems that will verify pork sourced from non-gestation stall supply chains.

The president of the National Pork Board, Everett Forkner of Richards, Missouri, says he is disappointed in McDonald’s announcement. 

Forkner says McDonald’s decision could put significant pressure on smaller farmers who use gestation stalls to care for their animals and could force many of them to leave the business.

The Humane Society of the United States applauded McDonald’s announcement, but said it would have preferred a shorter time frame for the phase-out.

Pork Board CEO discusses McDonald’s ‘gestation stall’ decision

That recent announcement by McDonald’s—made jointly with HSUS—that it wants to transition its pork supply away from farmers who use conventional sow gestation stalls seemed to catch many in the pork industry by surprise.   In an interview with Brownfield prior to the start of the National Pork Industry Forum in Denver, National Pork Board CEO Chris Novak gave us his thoughts on McDonald’s decision.

AUDIO: Chris Novak (3:16 MP3)

 

McDonald’s is a topic at Pork Forum

At this week’s National Pork Forum in Denver, pork producers are discussing several issues of importance to the pork industry.

One of those is the recent announcement by McDonald’s that it wants to transition its pork supply away from farmers who use conventional sow gestation stalls.

National Pork Board CEO Chris Novak says that, in discussing that decision with McDonald’s, they emphasized that pork producers are committed to providing the best care to each and every individual animal.

“That’s a message we’ll continue to take to McDonald’s and to every other food company,” Novak says, “and we’ll hope that their decisions that they make in the future are based on sound science—and what’s truly best for the animals–as opposed to simply making decisions that may be based only on consumer perceptions and/or threats of intimidation.”

Novak says that, while he doesn’t expect McDonald’s to reverse its decision, he hopes they take a closer look at the welfare advantages and disadvantages of various production systems.

“At this juncture, certainly, we would expect them to move forward, as they’ve made a public announcement—to the extent that I think the details have to be worked out,” Novak says.

“I think McDonald’s needs to understand the percent of production today that’s coming from the various types of swine production barns.”

It has been estimated that between 60 to 70 percent of sows in the U.S. are currently housed in gestation stalls.

The Pork Forum runs through Saturday in Denver.

AUDIO: Chris Novak on Pork Forum topics (10:36 MP3)

 

Nebraska ag leader reacts to McDonald’s announcement

Pete McClymont is the president of a Nebraska livestock coalition called We Support Agriculture.  The group was formed in 2011 to increase public awareness of the advantages of modern livestock production systems and threats posed by radical animal rights organizations.

At the Nebraska Governor’s Ag Conference in Kearney, we asked McClymont for his thoughts on the recent joint announcement by McDonald’s and The Humane Society of the United States in regards to gestation stalls in pork production—as well as the bill in Congress that would dictate the size of cages for egg-laying hens. 

McClymont says those are “disappointing” developments.

AUDIO: Pete McClymont (3:00 MP3)