McDonald's CEO Concerned About U.S. Meat Supply As Fast-Food Chain Announces 17 Percent Earnings Drop

McDonald's chief executive called the status of the United States meat supply "concerning" Thursday as he announced a profit drop of 17 percent for the fast-food chain.

"The great thing about our supply chain team, our suppliers, is globally we have not had a single supply chain break. Food, packaging, other materials – we haven't had a single supply chain break throughout this crisis in all 40,000 of our restaurants. That said, the U.S. situation around meat, actually a North American situation, is concerning," Chris Kempczinski, the president and CEO for McDonald's, said in an appearance on CNBC's Squawk On The Street.

"We are monitoring it literally hour by hour. Right now we feel like we are in a good position, but there is concern there. It's something that I think because we are McDonald's we have access to all of our suppliers and we have a special relationship with them. Certainly, our expectation is that they will make sure that they will do everything they can to guarantee our supply," Kempczinski said.

McDonald's saw a 17 percent drop in net income in the first quarter due to the novel coronavirus pandemic, which led a quarter of its restaurants to close around the globe.

"Following our strong performance in 2019, McDonald's began 2020 with exceptional global momentum, and our January and February sales were reflective of that trend. Since then, the global crisis caused by the COVID-19 pandemic has significantly disrupted our business, and we continue to operate in a very challenging and unpredictable environment," Kempczinski stated in the press release containing the first quarter results.

The press release also states that there was a 3.4 percent decline in global sales as 75 percent of McDonald's restaurants around the world remain open for drive-thru and take out. The U.S. currently has 99 percent of McDonald's restaurants open for business.

Concerns about the meat supply in the country led President Donald Trump to invoke the Defense Production Act on meat-processing plants after several large meat producers discussed plans to shut down 80 percent of their facilities amid fears of the novel coronavirus pandemic.

"We're going to sign an executive order today, I believe, and that'll solve any liability problems, where they have certain liability problems, and we'll be in very good shape," Trump said to reporters in the Oval Office Tuesday. Major companies in the meat production industry that have already closed some facilities include Tyson Foods and Smithfield Foods.

A White House official told Newsweek Tuesday that safety standards would be put in place at meat processing plants to protect workers.

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NOVATO, CALIFORNIA - APRIL 22: Cars wait in line at a McDonald's drive-thru on April 22, 2020 in Novato, California. McDonald’s announced plans to offer free Thank You Meals to first responders on the frontlines of the COVID-19 pandemic between April 22 and May 5. (Photo by Justin Sullivan/Getty Images) Justin Sullivan/Getty