McDonald's cuts Angus burgers from U.S. menu due to high beef prices

Thu May 9, 2013 3:22pm EDT

The corporate logo of McDonald's Corp fast food chain is seen on display in the Malaysian town of Pekan May 4, 2013. REUTERS/Bazuki Muhammad

The corporate logo of McDonald's Corp fast food chain is seen on display in the Malaysian town of Pekan May 4, 2013.

Credit: Reuters/Bazuki Muhammad

(Reuters) - McDonald's Corp (MCD.N) said on Thursday it is phasing out one-third pound Angus burgers from U.S. menus, an anticipated move that comes shortly after U.S. beef prices hit a 10-year high.

The company in March said it was weighing the removal of its "premium" Angus burgers to make room for other food options.

"While these burgers will no longer be available in our restaurants, they may still play a future role on our menu," spokeswoman Danya Proud said.

While prices for beef and other commodities have risen as a result of last summer's historic drought, overall food costs have not seen the sharp spike experts predicted.

The U.S. Department of Agriculture's (USDA) wholesale beef market report on Thursday morning showed choice beef carcasses rising 24 cents per hundred pounds (cwt) to a record $204.91 per cwt above the previous record of $204.67 hit late on Wednesday.

McDonald's and other chains have worked to offset higher beef costs by promoting chicken, which is less expensive than beef. To that end, McDonald's recently introduced premium chicken wraps.

The world's biggest hamburger chain introduced Angus burgers in 2009.

It has been revamping its menu amid tough competition from revived rivals such as Burger King (BKW.N) and Wendy's Co (WEN.O).

In March, McDonald's announced it was cutting Fruit & Walnut Salad and Chicken Selects from menus at its more than 14,000 U.S. restaurants.

(Reporting by Lisa Baertlein in Los Angeles; editing by Sofina Mirza-Reid)

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Comments (11)
Burns0011 wrote:
No surprise there. High corn prices due to ethanol regulations and demand, coupled with a poor crop last year, meant that a lot of cattle had to be slaughtered for lack of feed corn.

This year, that means fewer cattle for beef, which means higher prices. Expect the same surge in price to happen for pork, chicken, turkey…

May 10, 2013 1:44am EDT  --  Report as abuse
sydney0719us wrote:
There is no reason to blame ethanol or the weather for beef prices. Just like oil, the arbitrage players have ruined the options market. Used to be only farmers and co-ops would use the options market to stave off the vagaries of the actual market, now the players on wall street and Chicago mercantile markets play them.

The urban legend of poor crop cost us the beed price surge is another lie for the average person to swallow. Most cattle are range fed and are not given corn until some of them reach the feed lots. That is for a short time to get them fat. To claim that ethanol demands on corn crop is the reason for the price jumps is bogus. Most cattle farmers are barely if at all affected by corn prices. Ethanol productions have been going for decades and there is no short term impact on any corn pricing. In fact the industry is trying to switch to butonyl(sorry about the spelling) for awhile now and it is not made from corn. It burns better and uses non-feed bio mass such as corn stalks and such.

McDonalds is moving away from certain items now to meet the changing demands. Their apple and walnut salad was great but most stores did not promote and charged way too much for a small salad. The same salad was cheaper and larger at Wendy’s. McDee has been behind the curve on changing the menu items and their service stinks. Wendy’s has done a great job changing menus and service like Taco Bell. Burger King is doing a better job with re-vamped stores.

So to take a marketing move and do a plug-in for the financial players by decrying corn prices for a menu change is bogus.

May 10, 2013 3:53pm EDT  --  Report as abuse
sydney0719us wrote:
It is silly to join a marketing menu change to prices of beef and blaming it on the drought and ethanol. The article does not make the jump but a commentator does.

Here are some facts:
- McDonalds is catching up to the upgrades by Wendy’s, Taco Bell, Burger King, Whataburger and other smaller chains. McD has fallen way behind in service and menu choices. The apple walnut is a good example of a failure for Mc D. It was a smaller and higher priced product which did poorly for them Mc D. Mc D’s marketing department cannot fix the poor service either. It is a corporate failure
- Ethanol production has no affect/effect on corn prices since it has been factored in for decades
- Cattle is fed corn only in feed lots just a few days before slaughter in most cases. It is a very small portion of the cost since most cattle is grass fed on open land.
- The draught did not affect much of the open contracts of corn or production of actual corn. The players on wall street and Chicago drove up the prices. It used to be that only co-ops and farmers used the options contracts to flatten out the costs, but the greedy financial players who are not involved in any commodity markets play the markets to change prices.
- There are companies that pay people to post urban legends to paint a non-reality based picture to lull the general public

The article did a good job in announcing McD changes. It was probably written by a McD PR person. It has nothing to do with beef prices, the burger did not sell well since most people are eating less beef. Any drought based price change is easily offset by drop in demand.

May 10, 2013 4:02pm EDT  --  Report as abuse
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