Fast-food giant McDonald’s (MCD) says it will invest $200 million over the next seven years in order to support regenerative farming practices on cattle ranches in the U.S. This is the company’s biggest investment yet in regenerative agriculture in America. Interestingly, McDonald’s has already backed similar farming projects on potato farms in Canada and Europe. According to Cesar Piña, McDonald’s Chief Supply Chain Officer for North America, the company feels a duty to protect food systems for the long term, especially since it serves over 90% of Americans every year.
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Regenerative agriculture includes techniques that help conserve water, improve soil health, and reduce the use of synthetic fertilizers and chemicals. On cattle ranches, these methods often involve moving cattle from one area to another and giving the land time to rest. This leads to healthier grass with deeper roots, which helps remove more carbon from the air and create stronger soil.
McDonald’s said its funding will help speed up regenerative grazing and conservation efforts on ranches across 4 million acres in 38 states. The company is also partnering with the National Fish and Wildlife Foundation, which will manage and distribute competitive grants to organizations that help ranchers. Unsurprisingly, Jeff Trandahl, the foundation’s CEO, said that these practices can make grasslands more productive and ranches more profitable, with the first round of grant winners to be announced in January.
Is MCD Stock a Good Buy?
Overall, analysts have a Moderate Buy consensus rating on MCD stock based on 14 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average MCD price target of $323.05 per share implies 7% upside potential.
