Rising beef prices resulting from shrinking herd sizes are forcing the fast food giant to adjust its value menu, changing from the dollar price point to as much as $5.
The brand will still offer items for a dollar or less, however a second and third tier menu list will move some prices higher when the new menu launches November 4.
Beef prices have increased over the past month, topping $200 again after breaking the price mark in May. Consecutive years of drought deteriorated grazing pastures, raised feed costs and forced cattle producers to liquidate herds.
With fewer cattle available and demand remaining steady, beef prices have increased, presenting restaurants with the challenge of absorbing higher food costs in a weak economy.
The menu change is expected to allow franchisees to improve profit margins which had been struggling as the company avoided passing higher beef prices on to consumers. The competitive marketplace and slowed economic recovery are expected to limit McDonald’s profits in the final three months of the year.