Restaurant chains across the U.S. are reaching further back in their supply chains to offer their customers assurances about how the food they serve was produced. Hamburger chain Wendy’s takes the biggest step to date by becoming the first end user of U.S. beef to partner with the Progressive Beef program, a cattle management and sustainability program for feedlot operators. The program offers third-party verification of animal welfare standards and practices. Wendy’s started implementing the plan on Jan. 1, with a goal of at least 50 percent of its beef supply chain participating by 2021.
The program, which feedlot cooperative The Beef Marketing Group designed in 2000, has more than 1.2 million head currently under its care in certified feedlots or those in the process of being certified. It is the largest ever cattle sustainability program. Tyson Fresh Meats, a division of Tyson Foods, licensed the program in August and aims to buy 50 percent program cattle within three years. Tyson in fiscal 2018 processed an estimated 6.895 million head.
Wendy’s announcement came in mid-December with the release of its corporate social responsibility report. The program focus, it says, will include: providing a safe, humane environment for cattle through staff training on management practices and hands-on veterinary care; responsible use of antibiotics under the supervision of a veterinarian and with thorough recordkeeping, strictly adhering to withdrawal times, utilizing HACCP (hazard analysis and critical control points) principles and ensuring a clean and safe environment for the animals; responsible use of natural resources while investing in the people who care for cattle and the local communities through staff training and certification.
Auditors will verify and report on progress in these core focus areas, says Wendy’s. Audits are conducted biyearly. One is an internal audit conducted by Progressive Beef’s quality assurance team. The other audit is conducted by a USDA-approved auditor.
Wendy’s partnership with Progressive Beef (PB) is an extension of its longtime “fresh never frozen” commitment to its customers in relation to its beef supply chain, says Liliana Esposito, Wendy’s chief communications officer. Wendy’s has links with packers and patty makers but had not previously reached further back into the supply chain. It needed to develop relationships and decided to reach out to folks in the cattle feeding community, she says.
Wendy’s in 2018 committed to source all its beef from Quality Assurance-certified sources. Wendy’s also agreed to source nearly 20 percent of its beef from producers who track and reduce their use of antibiotics that are medically important to human medicine, it says.
Beef from the PB program will initially come predominantly from Tyson, says head of procurement Henry Zerby. Wendy’s use of PB beef will be part of its public relations efforts, via its website and on social media, including its “The Square Deal” blog and Twitter, says Esposito.
McDonald’s, the world’s largest hamburger chain, also announced at the same time that it plans to reduce the use of antibiotics in its global beef supply in the next few years. It will take two years to decide how much of the antibiotics important to human health it will be able to remove from beef, it says. It will work with meat suppliers in its 10 largest beef-sourcing markets, including the U.S. More than 70 percent of the antibiotics administered to cattle in the U.S. are said to not be used by humans.
Meanwhile, the U.S. meat and poultry industry will produce another record amount of protein this year. How it disposes of it will depend on continued strong demand at home and abroad. That is especially true for beef as it is by far the highest-priced protein. Americans last year showed a willingness to pay more for beef and exports boomed, especially to South Korea, Taiwan and Japan.
Total red meat and poultry production this year is expected to reach 105.570 billion pounds, up 3 percent on 2018, according to USDA’s Economic Research Service (ERS). This would exceed the expected 2.4 percent increase in 2018 from 2017. ERS forecasts that 2019 broiler production will be up 1.7 percent on 2018 at an estimated 43.370 billion pounds. Beef production will total 27.810 billion pounds, up 3.3 percent on 2018, and pork production will set a new record of 27.715 billion pounds, up 5.3 percent on 2018.
Demand therefore will be the key to the financial health of the U.S. red meat and poultry industry this year. Potential negatives to continued strong demand will be stock market volatility in the U.S. and overseas, and trade issues. The latter includes tariffs and uncertainty that Congress will ratify the new U.S.-Mexico-Canada Agreement (USMCA), which would replace the 24-year-old North American Free Trade Agreement.
Congress is unlikely to take up ratification until a newly-elected House is seated early in the new year. Moreover, House Democrats might try to alter terms of the agreement and delay or even block its ratification. — Steve Kay
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
