Import beef gains hold in U.S. fast food market

? The all-American hamburger isn’t all American anymore.

McDonald’s is joining Burger King, Wendy’s and other fast-food chains in importing beef from Australia and New Zealand because there’s a shortage of U.S. beef that’s lean enough or cheap enough for its burgers.

Workers lead cattle into a holding pen after they were sold at an auction at the Sioux City Stockyards in Sioux City, Iowa. Declared the top stockyards in the world in 1973, the Sioux City yards closed April 1 in part due to changing trends in beef production. U.S. beef producers are concerned about overseas purchases by fast-food chains.

“The supply just isn’t there,” says McDonald’s Corp. spokesman Walt Riker.

For now, McDonald’s is trying out the imported beef in about 400 of its 13,000 U.S. stores, all in the Southeast. Customers won’t know the difference, he said. “We’re running a small test using some beef that is top quality.”

Hamburger chains typically make their patties by mixing lean beef meat that’s no more than 10 percent fat with low-cost fat trimmings that are a byproduct of packing plants. The resulting product is similar in fat content to the ground beef typically sold in supermarkets.

Australia and New Zealand have plenty of lean beef because their cattle are fattened for market on grass, not the grain fed to U.S. cattle. Grain-fed cattle make for juicier steaks because they are higher in fat.

In the United States, the lean beef that the fast-food chains need for their burgers usually comes from female cattle that are slaughtered for ground beef when they are too old for breeding or producing milk. Ranchers have been cutting back on their cow herds for several years, so now there aren’t enough of the animals to meet the burger industry’s demands.

Lean beef from Australia and New Zealand sells for 5 cents to 20 cents per pound cheaper than the U.S. product.

For financial reasons, McDonald’s had no choice but to join its competitors, risking the ire of U.S. cattle producers by importing some beef, said Steve Kay, editor of Cattle Buyers Weekly, an industry newsletter. McDonald’s announced last month that its profits were being hurt by weak currencies and that first-quarter earnings would not meet Wall Street’s expectations.

McDonald’s is the biggest single buyer of both U.S. and Australian beef, which the chain uses extensively outside the United States.

The National Cattlemen’s Beef Assn. will oppose any attempt by Congress or the Bush administration to allow Australia and New Zealand to increase their U.S. exports.