This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/28/2005
MacDonald's Produce
The MacDonald's franchise has had a major effect on the beef-raising and the potato-growing industries for quite some time. One might not think so from one view point because it only consumes about 4.1 % of the beef and 2.2% of the potatoes grown. It's because of their picky specifications and standards as to exactly what kind of beef and what kind of potatoes that have such a huge effect on the market. With the new health kick especially around the U.S., MacDonald's has taken a big step into the fresh produce market and plans on buying hundreds of millions of pounds in this area. The company plans on buying 135 million apples during this year alone (making it the #1 apple buyer in the world). As far as lettuce goes, the plan is 116 million pounds along with 50 million pounds of grape tomatoes http://www.oligopolywatch.com/. The prediction is that small farmers will still be overlooked being as that MacDonald's is likely to reduce the suppliers to only a few and will certainly demand for more standardization. Will the rest of the fast food market follow? Will America become more healthy with all of these food alternatives? Certainly demand is going up.
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3 comments:
I have gotten bored with people blaming McDonalds for making people fat (see "Supersize Me"). Is it really McDonalds responsibility to govern what people eat? Are they really to blame for people having a lack of self control? McDonalds offers enough healthy alternatives for those who want them.
-1 on Jim's comment for spelling errors.
I'm not sure this will have much effect on small producers. What McDonald's is really looking for is consistency of produce, and there is no reason that small producers can't do that if they want to.
I admit that a lot of this is a fad effect, but you will see a lot more produce at places like McDonald's in the future. The reason is that the technology to provide produce in a fast food environment has not been available until recently. Bagged salads are easier technologically, and they only go back about 10 years.
BTW: since grape tomatoes were brought up, did you know that they are illegal in Europe? This is because they are an American hybrid that the Europeans don't want introduced into their market because it will impact their tomato growers.
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