Day 095 - 02 Mar 95 - Page 43


     
     1   Q.   Right.  So you get the cheaper quality cattle?
     2        A.  Cheaper, no.  What we are looking for -- the feed lot
     3        does not target for McDonald's need; it targets for the
     4        needs of the retail store.
     5
     6   Q.   Do you know what percentage of the dairy cattle in the USA
     7        end up at McDonald's?
     8        A.  I do not remember the figures right now, but you asked
     9        me that question last December and I had the fresh numbers
    10        at that time.
    11
    12   Q.   Approximately, is it 50 per cent?
    13        A.  No, it is below that.
    14
    15   Q.   Below 50 per cent?
    16        A.  Yes, way below that.
    17
    18   Q.   Are dairy cows.  So most of your products come from steer
    19        cattle?
    20        A.  No.  It could come from steers.  It could come from
    21        cows.  It could come from different sources.  Do we get
    22        meat from the steers?  Yes, we do.
    23
    24   Q.   So really it is not fixed; you take the cattle from
    25        anywhere, from feed lots, from dairy, from ranges or
    26        whatever?
    27        A.  The industry is segmented.  There are different
    28        segments in the industry.  We take depending on the volumes
    29        and the supply and demand whatever is the best resource to
    30        feed our needs.
    31
    32   Q.   Right.
    33        A.  The feed lots, we buy very little what is left from a
    34        carcass that goes to the feed lot, we buy very little of
    35        it.  Just to give you an indication, if you put a dollar, a
    36        pound of a patty as an indication of our costs, 9 cents
    37        come from meat that we buy from the feed lot.  The rest is
    38        from some other sources.
    39
    40   Q.   So something like 10 per cent of your budget would be used
    41        for feed lot sources for your suppliers?
    42        A.  From by-products of the feed lot, yes.
    43
    44   Q.   You remember we asked you about Australia?
    45        A.  Yes.
    46
    47   Q.   And you visited feed lots there?
    48        A.  Yes, I did.
    49
    50   Q.   Is the picture in Australia roughly the same as in the USA, 
    51        that you take from a variety of sources? 
    52        A.  No.  In Australia we do not buy from feed lots.  We do 
    53        not buy from beef (indecipherable), what we talked about,
    54        we do not buy from them.  We buy grass-fed animals in
    55        Australia from our suppliers.
    56
    57   Q.   The feed lot animals are the more expensive cuts, are they,
    58        better quality?
    59        A.  Quality is a relative term.  It is more expensive, yes,
    60        it is.

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