The fast food company says it "will no longer accept" eggs from one of the country's biggest egg companies, Sparboe Farms, that is the subject of an ABC News investigation to be broadcast Friday on "20/20" and "World News with Diane Sawyer" and was cited Thursday by the Food and Drug Administration for "significant…and serious violations" in the production of eggs.
In one of the most forceful enforcement actions since last year's salmonella egg outbreak, the FDA issued a company-wide warning letter to Sparboe Farms, the country's fifth largest egg producer.
Citing "serious" and "significant violations" at five different locations, the FDA cited at least 13 violations of the recently enacted federal egg rule meant to prevent dangerous salmonella outbreaks.
"This is a warning that there is a systemic problem, not just at one barn or one location," said former FDA food safety chief David Acheson, now an industry consultant.
The ABC News broadcast will include undercover video taken over the summer inside Sparboe facilities in three states by an animal rights group, Mercy for Animals, that appears to show unsanitary conditions and repeated acts of animal cruelty.
Until today, the Sparboe facility in Vincent, Iowa, had produced all eggs used by McDonald's restaurants west of the Mississippi River.
In its statement, McDonald's said its decision was based on concerns about "the management of Sparboe facilities."
"McDonald's expects all of our suppliers to meet our stringent requirements for delivering high quality food prepared in a humane and responsible manner," the company said in a statement released to ABC News overnight.
The Mercy for Animals activist who went undercover to record the video inside Sparboe told ABC News chief investigative correspondent Brian Ross, "I saw workers do horrendous things to birds, they were thrown, grabbed by the neck, they're slammed in and out of cages."
Nathan Runkle, the executive director of Mercy for Animals, said the video shows how health hazards can be linked to large scale, low-cost egg producers, so-called "factory farms."
"They're the model of efficiency but they place an emphasis on profit over animal welfare," said Runkle, who says he and his members eat no animal products because of the animal cruelty they have seen.
Sparboe executives told Ross the employees seen on the tape abusing the chickens were all fired.
"We have a zero tolerance policy," said Ken Klippen, Sparboe's director of government relations. "People who violate that policy, we take that very seriously."
On a one-hour guided tour of the Sparboe facility in Vincent, Iowa, the source of all McDonald's eggs for restaurants west of the Mississippi, Klippen told Ross the Sparboe's facilities are "state of the art.
Sparboe has never had a single egg or chicken detected with salmonella, said Klippen, who added "there was no cause for any enforcement action.".
The 2010 salmonella outbreak affected more than 1,900 people and was traced to a different Iowa egg producer, Wright County Eggs.
More than a half-billion eggs had to be destroyed and the episode produced a nationwide health scare over the safety of eggs.
Salmonella in eggs is easily killed when both the white and the yolk are cooked thoroughly enough to be hard.
Many of those sickened last year ate custard at a California catering hall that had eggs from Wright County Eggs.
Federal authorities promised stepped up inspections and enforcement, and FDA officials said this week's action against Sparboe Farms was part of that effort.
McDonald's says its customers should have no health concerns because all of it eggs are thoroughly cooked before being sold.
"This is not a food safety issue for our menu items," McDonald's said in its statement. "We can assure our customers that eggs in our entire supply chain meet McDonald's high standards for quality and safety."
As to the allegations of animal cruelty, a spokesperson said the behavior seen on videos provided by 20/20 was "disturbing and completely unacceptable."