In just 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 anywhere in the world are getting of work that started in 2014.
To be fair, it has taken some economic cajoling to get Canada's producers interested. Enthusiasm for the country's audited program grew markedly with the introduction of per-head credits, which in 2018 ranged from $10 to nearly $20.
Deborah Wilson, senior vice president of the Beef InfoXchange System (BIXS), which tracks portions of the program, reports a return of $10 per head the first quarter of 2018, $20.11 the second quarter and $18.52 the third quarter. Fourth-quarter credits were unknown at press time. In the third quarter of 2018, she adds, more than 1 million pounds of beef came from certified sustainable sources, nearly double the third quarter in 2017.
Working with Cargill, the Canadian Beef Sustainability Acceleration (CBSA) Pilot set up a program where cattle operations, whether ranches, backgrounders, feedlots or packers, paid for their own audits to establish their beef as verified "sustainable." That beef is sold to CBSA program members, including McDonald's, Loblaw and Cactus Club Cafe. These buyers make quarterly credit payments for pounds delivered. Cargill distributes the credits to producers based on the number of animals they sell that qualify for the program. Certification standards include a range of criteria, from protections for wetlands, water sources, wildlife habitat, proper levels of soil protection, carbon footprint, air quality, worker treatment and community stewardship.
Given the monetary encouragement, it's not surprising an increasing number of Canada's beef operations are taking steps to qualify. In this system, producers schedule audits, pay costs associated with program registration and tag their animals with radio-frequency identification. They share that data with BIXS, which traces cattle through the chain and validates operations as meeting sustainability criteria.
DEFINING U.S. SUSTAINABILITY
As tempting as an extra $10 to $20 a head sounds, America's cattle producers shouldn't expect a similar program. Yes, there is a sustainability program under development in the U.S., but there are no credits, aka premiums, expected to go along with the title.
Asked why proponents of sustainability moved toward premiums in Canada, McDonald's vice president of sustainability, Keith Kenny, told DTN/The Progressive Farmer in an exclusive interview that Canada is in a unique position. He called the country a "pioneer" and noted that no two roundtables would work in exactly the same way.
"Sometimes you have to encourage early adopters," he said. "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."
The company's director of supply chain sustainability, Townsend Bailey, added in that interview, "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. We don't want to mandate any specific practices. We want to make sure there is enough flexibility there for producers and to help provide the tools and resources to implement a sustainability program."
Bailey rightly notes that given the size and varied regional production systems that make up the U.S. cattle industry, there is no one best way to define sustainability. The company is, however, working to develop some tools that would have widespread utility.
Two projects in the U.S. are now in their second years. In one, McDonald's teamed up with researchers from universities across the country, including Arizona State, Colorado State, Michigan State, New Mexico State and Texas A&M to look at how certain intensive-grazing practices can store carbon and create biodiversity in soils and forages. The program was launched in the Southeast with data collected in summer 2018 across 10 ranches in Alabama, Kentucky, Mississippi and Tennessee. It compares conventional-grazing practices with adaptive multipaddock grazing, commonly known as "mob grazing." The data is expected to be published in December 2019.
McDonald's Bailey notes the company has committed $4.5 million in matching funds to the project, with $2.7 of that matched.
"This is not only about how grazing systems can impact carbon sequestration in soils," he adds. "It's about other soil-health areas, including water retention, minerals and forage nutritional values off of the soils."
The second project is in affiliation with Oklahoma's Noble Research Institute. Bailey says in this project, the full beef chain is engaged. Cow/calf producers from Oklahoma and Texas, who are members of the Integrity Beef Alliance, provide animals to Beef Marketing Group feedyards in Kansas, where they are fed out. Those cattle are processed at a Tyson plant, with the beef then moving to Golden State Foods, where it is made into patties for use by McDonald's.
Bailey says they are using metrics established by the U.S. Roundtable for Sustainable Beef (USRSB), even though those metrics are not yet finalized.
"As we go through the process, we are getting feedback from participants, which we are putting into the public comments [for the metrics]. 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."
In the first year, 29 producers sold cattle into the program, adding up to about 2,300 head, or 91,000 pounds of beef for hamburgers. There were no breed specifics, and the beef, selling in the U.S. market, was not differentiated.
These projects by McDonald's are just part of a mountain of behind-the-scenes work coming to fruition this year by the USRSB. The group will formally release its sustainability framework soon, which will include indicators, metrics and assessment guides.
The USRSB is one of more than 20 countries that now have roundtables or initiatives as part of the GRSB. These include Argentina, Australia, Brazil, Canada, China, Colombia, European Union, Mexico, New Zealand, Paraguay, countries in southern Africa and the United States. The GRSB officially formed its foundational principles and criteria in 2012 and held its first global conference in Brazil in 2014. That was followed by a meeting in Canada in 2016 and the most recent one in Ireland in 2018, when the European Roundtable for Beef Sustainability announced its formation.
Attendees of the meeting spent some time in the country visiting a generations-old farm owned by John and Catherine Power. The two are flagship producers for McDonald's beef, which goes to an area plant, Dawn Meats.
Power says their operation is about 400 acres in size and includes 200 cows. It's considered large by Irish standards. Like many U.S. producers, Power says one of his primary goals is to pass this operation on to the next generation, his son Allen. He hopes the tools of sustainability will help him do that.
"We have a passion for sustainability," he tells GRSB visitors. "We're not doing it for the money. It's tradition here for the land to pass down, and today land is very expensive."
Power notes that he and other producers are struggling under regulatory pressures from the government. Programs such as the European Roundtable for Sustainable Beef that recognize his efforts will hopefully be a benefit.
"Every animal in Ireland has a passport," he notes, referring to the nation's traceability system. They rely on metal ear tags and rigorous tracking of identification numbers each time an animal moves. If an animal moves more than four times in its life, it is not accepted into the buying program. Animals cannot be slaughtered without documentation.
Power describes his farm as having two rivers through it, conservation areas and annual perennial grasses. He finishes cattle on wheat, barley, oats and distillers grains.
Despite his frustration about regulatory issues, the farmer says he can't imagine doing anything else. It's a sentiment U.S. producers will understand well.
"You're never going to make a lot of money being a farmer," he says. "But, the quality of life is important to us. There's no traffic. It's quiet. We love it here. The most important thing to a farmer is to be able to make a decent living, take care of your farm and have it be there for the next generation."
MAKING AN IMPACT
Time will tell how sustainability, as defined by roundtables and the GRSB, impacts that goal. So far, however, growth in the group's membership has been impressive. To date, 65.42% of global beef production is represented in some form at the GRSB. Combining Brazil, the European Union and the U.S. represents roughly 47% of the world's beef production.
The GRSB represents six constituencies: producers/producer associations, commerce and processing, retail, civil, allied industry and national or regional roundtables. Some names on the membership roster will be very familiar to U.S. beef producers, including the National Cattlemen's Beef Association, Bayer Animal Health, Cargill, Dow AgroSciences, Elanco, JBS, Merck Animal Health, National Wildlife Federation, Rabobank, Texas A&M, World Wildlife Fund and Zoetis, to name a few.
The GRSB has established five principles and criteria of sustainable beef: natural resources, people and community, animal health and welfare, food and efficiency/innovation. The GRSB does not regulate or enforce any set of metrics or guides. The member roundtables each establish that and then work within their country or region to help build a source of sustainable beef defined by that country's metrics for buyers such as McDonald's. How that process looks will be very different depending on where a producer is based.
McDonald's Bailey says it's important to point out that 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 environment."
U.S. ROUNDTABLE FINALIZING FRAMEWORK
After receiving more than 450 public comments, the U.S. Roundtable for Sustainable Beef (USRSB) released what it calls a "Sustainability Framework" for a second round of comments through the end of 2018. All of the group's work will culminate in a framework for sustainable beef production in the U.S., to be released at a meeting in May 2019, in Fresno, California.
Kim Stackhouse-Lawson, JBS USA sustainability director and 2018-19 USRSB chair, says the feedback was critical in helping to finalize the framework.
"We were able to further clarify judicious use of antibiotics, expand upon practices that could mitigate greenhouse gas emissions or improve carbon sequestration, and further define our role in the implementation of market programs for sustainable beef based on feedback from the public," she notes.
The USRSB announced it would recuse itself from any sustainable market program or regulatory affairs. While the group's framework can be implemented in the marketplace, "no certification or verification program will be led by the USRSB." It also notes the USRSB will not engage in regulatory or lobbying efforts.
The group will support the Global Roundtable for Sustainable Beef's stand on antibiotic stewardship, which aligns with that of the World Organization for Animal Health guidance. And, the group will provide information on sources and practices that can mitigate emissions or improve carbon sequestration.
For more information
> Global Roundtable for Sustainable Beef:
> U.S. Roundtable for Sustainable Beef:
© Copyright 2019 DTN/The Progressive Farmer. All rights reserved.