McDonald's Canada changes chicken sourcing amid shortages

McDonald’s Corp. said it is temporarily changing poultry suppliers in its Canada division due to the ongoing impact of COVID-19.

The announcement comes as other restaurant chains have highlighted chicken supply challenges on their earnings calls, and executives at processors Sanderson Farms and Wayne Farms this week publicly discussed pressures including labor shortages.

The current slump in chicken production is being influenced by such elements as COVID-19-related production disruptions, hiring challenges and greater consumer demand for certain poultry products, according to various companies.

McDonald's Canada this week said its switch to a Canadian contingency supplier means it will temporarily be unable to provide McChicken sandwiches with chicken raised without antibiotics at its Canadian restaurants. Customers will be able to purchase menu items made from chicken raised conventionally.

In late April, McDonald’s Canada said it would temporarily use chicken shipped from a U.S. supplier to make Chicken McNuggets for Canadian markets after a Cargill Inc. processing plant in London, Ontario, paused production.

Meanwhile, Wayne Farms is wrestling with a shortage of applicants at its poultry processing facility in Dothan, Ala. The processor told WTVY/News 4 that it is trying to fill about 300 jobs at a facility that needs 1,200 employees to operate at full capacity. Wayne Farms already is adding about 20 new employees each week, but losing nearly 40 workers in the same period, a company official told the news outlet. The staffing issue is affecting the company’s ability to successfully meet demand for chicken products from its national accounts, he said.

Sanderson Farms is citing both labor shortages and higher consumer demand at fast food restaurants for sparking supply problems just as the pandemic is waning.

Severe weather in Texas, an increase in fried chicken popularity among fast food chains and a national labor shortage have combined to pressure chicken suppliers, Sanderson CFO Mike Cockrell told KBTX-TV. “It’s going to be an interesting summer to see how the industry responds to this really good demand because to do that, you have to put chickens on the ground and feed them a very expensive costly grain,” Cockrell was quoted as saying.

Pilgrim's Pride CFO Fabio Sandri last week said on the company's earnings call that filling jobs had become a much more challenging problem for the processor.

Par Chris Scott (05/05/2021)

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