KILKENNY, Ireland (DTN) -- In four short years, McDonald's has gone from having a vague idea about buying some nebulous thing called "sustainable beef" to selling Angus burgers carrying Canada's sustainability logo in restaurants in that country. It's the first commercial taste consumers are getting of work that started in 2014. And it's coming soon to the U.S. market.
In the U.S., McDonald's is working on projects aimed at building a supply of beef that can meet metrics being established by the U.S. Roundtable of Sustainable Beef (USRSB). Those metrics are in a public comment period. Currently, the corporation is part of two pilot programs in the U.S. with ranchers, researchers and others across the supply chain.
In an interview with DTN/The Progressive Farmer, McDonald's Corporation's Townsend Bailey, director of supply chain sustainability, and Keith Kenny, vice president of sustainability, noted while Canada is the first commercial success for the beef sustainability program, there's much more ahead.
Those two pilot programs in the U.S. are going into their second seasons in 2019.
In one program, McDonald's is working with researchers from universities, including Arizona State University, Texas A&M, Michigan State, New Mexico State and Colorado State, to look at how certain intensive grazing practices store carbon and create biodiversity in soils and forages.
The program was launched in the Southeast, and data has been collected all summer across 10 ranches in the states of Alabama, Mississippi, Kentucky and Tennessee. The ranchers, some of them neighbors, have comparable soil types. They are paired up, with one operation using conventional grazing practices and the other a form of adaptive multi-paddock grazing, commonly known to producers as "mob grazing."
"McDonald's has committed $4.5 million in matching funds, and $2.7 million of that has been matched," reported Bailey. "We have a goal of publishing the data from this project in December 2019. This is not only about how grazing systems can impact carbon sequestration in soils, but about other soil health areas, including water retention, minerals and forage nutritional values off the soils."
He added that there is also a social element to the work, with a goal of understanding economics and motivations behind producer decisions about grazing management.
The second project is in affiliation with Oklahoma's Noble Research Institute. Bailey said the full beef chain is engaged. Cow/calf producers from Texas and Oklahoma who are members of Integrity Beef Alliance are providing animals to Beef Marketing Group feedyards in Kansas, where they are fed out. The cattle will be processed at a Tyson plant. The beef then moves to Golden State Foods, where it will be made into patties for use by McDonald's.
"We are using U.S. Roundtable metrics, even though they aren't finalized yet," noted Bailey of cooperators in the project. "As we go through the process, we are getting feedback from participants, which we are putting into the public comments. It's one thing to come up with a metric, but theoretically, when you have to answer and validate it, it gives you another perspective. This has been a great way to provide real-life input into the metrics."
He said that, in the first year of this program, 29 producers sold cattle into it, adding up to about 2,300 head -- 91,000 pounds of beef sold for hamburgers. There were no breed specifics. While the beef sells in the U.S. market, it has not been differentiated at this point.
Kenny, who has been with the company 30 years, added that McDonald's commitment to sustainability and its ability to work at this level is in part thanks to the suppliers the company uses.
"We have the position to drive a changing supply chain because we have a relatively small number of suppliers," he explained. "As McDonald's grew around the globe, a lot of our U.S. suppliers came with us, which was one of the big reasons McDonald's was able to grow so fast. Some of our suppliers have been with us 40 or 50 years. If you ask them to invest in a sustainability initiative, which is a long-term commitment, a supplier can only do that if they know you are going to be their customer and they will see a return. This takes a commitment from everyone."
Bailey added that the company is encouraged by the work in the U.S. and says it's been critical to have everyone at the table to share the data that's being generated.
"The cow/calf guys get to see how their calves performed in the feedyard, and on the rail. It hasn't been without bumps along the way, but the bumps have been the best learning experiences for us all," noted Bailey. He added that the second generation of calves for the program were born in March. They will be about 8 months of age when they move to the feedyard.
One of the biggest questions around the idea of selling beef into a market focused on sustainability is what, if any, additional monetary value will be placed on the animals. In the case of Canadian sustainable beef, producers there have seen quarterly credits ranging from $10 to $20 per head. That system is quite different from the one in the U.S., because it is an audited program -- which U.S. producers have made clear they don't want. But that won't stop the premium question from coming around.
Neither Kenny nor Bailey was able to give any definitive answers on the subject. Asked if Canada had set the wrong precedent by paying producers in the program, both noted that, with 20 roundtables around the world, no two will operate in the same way.
Kenny stressed that, in Canada, there is the point to be made that those producers are pioneers in this movement. That puts them in a unique position. "Sometimes you have to encourage early adopters. It's not to say we will see that replicated everywhere. We are still a little bit away in the U.S. to know how it's going to go."
Bailey added: "At the end of the day, there doesn't seem to be an appetite for certification in the U.S. We're trying to figure out how to do this at scale. If a grazing management plan doesn't work in the U.S., it's going to be up to the producer to change the plan so that it works. We don't want to mandate any specific practices. A grazing management plan in Nevada is going to be very different from one in Alabama. We want to make sure there is enough flexibility there for producers and help provide the tools and resources to implement a program."
Lastly, Bailey points out the concept of sustainability, by its very nature, can't be driven as a premium program.
"If we're just relying on premiums to advance sustainability, then it's like a subsidy. The sustainable practices aren't sustainable if they are subsidized by a premium. To really be sustainable, it has to be a practice that, in and of itself, is providing returns for both the farmer and for the environment."
For more information on the metrics being developed for U.S. farmers, go to the U.S. Roundtable for Sustainable Beef website at: www.usrsb.org
Victoria Myers can be reached at email@example.com
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