Why Is Costco Opening Its Own Chicken Farm?

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In fall 2019, Costco will open a chicken farming operation in eastern Nebraska. This venture will provide Costco with 100 million chickens, or 40 percent of its yearly chicken needs, allowing it to partially escape the American chicken oligopoly run by the likes of Tyson, Pilgrim’s Pride and Perdue.

One of the brand’s iconic products is the Costco rotisserie chicken. Costco sells about 60 million of them every year, but they’re a loss leader. Costco sells these chickens at a loss sometimes up to 30 to 40 million dollars per year. The chickens are a lure to get customers in the door. They’re placed strategically at the back of every Costco so customers might pick up other items along the way.

That’s why Costco wants to keep the price so low.

The trouble is that chicken prices have crept up over the last 10 years and the industry is practically an oligopoly run by the likes of Tyson and Perdue. Costco like most American Grocers buys from these behemoth companies because there’s no other option. But not anymore. In 2016 Costco announced its plans to open a chicken farming operation in eastern Nebraska. It will own the whole supply chain from baby chicks to feed to the final product. This operation will provide Costco with 40 percent of its yearly chicken needs about 100 million chickens.
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Why Is Costco Opening Its Own Chicken Farm?

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27 Responses

  1. Andrew Schaefer says:

    Great! the life of a beautiful bird is valued at $5 and used as loss leader to sell other over packaged good. Costco, I love your organic vegetables but come on, you are a leader in the world and a "Blue" company so lets try to do a little better.

  2. kimberly miller says:

    Where were those baby chicken going at 5:28 ?? >:l

  3. Zach Chang says:

    So is this created by Tyson or prude or McDonald's to cause people not to want the company that pays it's workers a living wage not enter a market run by people that pay there workers below minimum wage be exploiting illegao imigrants

  4. MrMaxwell1945 says:


  5. Jim says:

    There are always people that are against the new. The lunatic fringe of the environmentalists would like to slaughter 90 percent of the human population 'for their own good, and force the survivors to live cheek by jowl in city-pens. The other farms look on uneasily at this new (for Nebraska} paradigm of agricultural production and wonder if they could end up in a corporate contract someday. The commenters was right, they are making widgets, standardized widgets. Vertical integration exists because its too big a headache to try and maintain a standard with every step of the process vulnerable to the vagaries of the many bungling dumbasses that populate the world. On the other hand, our newest on-line sales paradigm allows the small producer to create an electronic storefront and compete directly with the corporate entity for the consumer's spending. Instead of railing and failing, find the weakness and exploit it. Sell to the many that won't eat factory farmed antibiotic flavored chicken. I'm also sure that there is a market for non-GMO traditional wheat flour.

  6. Spooferish says:

    Here in middle East Brazilian chicken are sold for around 2$ and then here in middle East (6 thousand KM away) in stores it is sold for 3-3.5$ for roasted chicken. I am still surprised why it's hard to sell even for 5$ when big companies like Costco want to do it.

  7. fakkeRICH says:

    That Costco chicken nasty af tbh

  8. Nicolas says:

    what does "inhumane treatment of chickens" mean…?

  9. Ruvin Eric Perez says:

    Hmmm… reminds me of the episode rotten in netlfix. They exposed the bad side of chicken farming….

  10. Red Butterfly says:

    Inhumane treatment of chicken? Wth.chicken poop is a very nutricious fertilizer so its environmentally friendly so why human keep creating false accusations? U should be greatfull that u have a cheaper chicken there bec its still same price for pork in other country. When life is good human forget the effort of those who make their life easier. But when its bad even the food in the garbage is so much appriciated.

  11. SPIRIT KAT says:

    and in youtube ..type….mercy for animals commercials…

  12. SPIRIT KAT says:

    costco abuses these animals

  13. Ishmael Cato says:

    Americans should only buy Organic Free Range Chickens

  14. fuzzybusiness says:

    If they need farm hands I'm in

  15. Dank Studios says:

    Cheaper to own the means of production rather than pay someone else? Breaking news for sure

  16. Bao Thao says:

    Too cold in Nebraska to farm birds. Most of the income will go to heating, utilities or propane, gas company will make good money.
    It's will benefit to those companies than chicken farmers. Don't do it. unless you have too much money and you want to throw it away. There are other better place to throw away money.

  17. yuchen ma says:

    Listen to the last guy’s pure fear and irrational rejection. Lol it’s 2019 and people still defend their little farmers pride from industrialization. Hey buddy, you’re worthless in the future world.

  18. Leech says:

    Everyone go Vegan so I can have more pieces of chicken.

  19. realpqleur says:

    Due to tariffs, the cost of Chinese chickens has risen quite fast so COSTCO(ChineseOverSeasTradingCompany) has decided to start using American birds.

  20. Isaiah 59:17 says:

    White People caring about the environment… I funnier joke I have not heard….

  21. Bob Anderson says:

    Get rid of the loud annoying music it interferes with the narration.

  22. John Petun says:

    Chickens are cute and we eat them 🙁

  23. tpt213 says:

    Build that wall… we dont want those chickens in our community. Lol

  24. The Food Nomads A.K.A The Fomads says:

    they salty tho

  25. Go Vegan Ban Animal Farming Hunting & Exploitation says:

    Go vegan! Leave chickens alone. Invest in clean meat.

  26. Yip Fred says:

    more people should see this, and we need more "real, goog quality news" like this! this is what news report supposed to be

  27. Luca Caldari says:

    What kind of chicken is that? When is cut… Where r the bones?

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