USDA, Not Customers, Responsible for McDonald's Profits

USDA, Not Customers, Responsible for McDonald’s Profits

Website uncovers how the fast-food giant’s recent surge in profits have more to do with government subsidies than consumer purchases.

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News website Quartz recently detailed how big government helped McDonald’s end seven quarters of slumping sales. Despite unprecedented downsizing and many US franchise owners expressing pessimism about the future of the company, the fast-food chain was able to increase its profits and market shares for the first time in 21 months with the help of Dairy Management Inc. (DMI). The federal “checkoff” program—controlled by the US Department of Agriculture—was created with the sole purpose to increase dairy sales, with its latest tactic being to form strong relationships with fast-food chains. McDonald’s CEO Steve Easterbrook attributed part of its turnaround to replacing margarine with butter in its Egg McMuffins and 19 other menu items, a move apparently pushed forward by DMI that will see McDonald’s increase its dairy use by five to six million pounds of milk per year—more than what’s needed to produce one year of US domestic butter exports. Coupled with the massive subsidies the USDA provides for the crops and beef that end up on quick-serve menus, and the fact that McDonald’s owes much of its uptick in overall earnings to its international efforts in China rather than domestic gains, it’s clear that McDonald’s is struggling and the US government is working to bail the company out of a time when more consumers are shunning fast-food and opting for healthier alternatives.

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