How Costco's Enormous Chicken Farm Has Changed Nebraska
To offset some of the costs incurred while sourcing 91 million rotisserie chickens in a year, Costco decided to construct a $450 million chicken plant in Fremont, Nebraska. Doing this, as CNN reported, would allow Costco to control the entire process behind a large swath of their chickens, potentially saving them 35 cents per bird. Considering the millions of dollars Costco loses in their decision to keep the rotisserie chicken at $4.99, it's a natural step.
The state government was keen to draw Costco's investment, as Governor Ricketts' appearance at the plant's opening in October 2019 shows (via KRVN Radio). "This is really a great opportunity to grow an industry," he said to the Omaha World-Herald. After all, the plant planned to hire at least 800 Nebraskans, partner with 100 farming families, and have contracts with corn and soy growers.
"[Costco will] own the birds," John Hansen, farmer and president of the Nebraska Farmers Union, stated to Civil Eats. "They'll control all of the particulars of the birds' genetics, the production. They'll own the feed mill and they'll have control of the processing plant. If this model works, what will it mean for the rest of the poultry industry?" Indeed, he expanded on the issue to Eater, pointing out that Costco and Lincoln Premier Poultry, the subsidiary running the plant, have all the power to negotiate a contract to their advantage, which then determines the relationship between the farmer and the company: "There is no market. The contract controls everything."
They began during the pandemic
Since the plant's 2019 opening, Lincoln Premium Poultry expanded its workforce from 600 to over 1,100, as the Fremont Tribune wrote in September 2020. This exceeded expectations. Local contractors tasked with raising the chickens had built 440 out of 520 barns.
These numbers, however, also blossomed during the onset of the pandemic, which, as NPR stated in May 2020, has found hot spots in meat and poultry plants due to their cramped working and living conditions and the reluctance to receive testing among a largely immigrant workforce that fears outing undocumented family members. Other factors include worries about not being paid and bosses pushing their workers to continue despite feeling unwell.
Lincoln Premium Poultry wasn't immune. Also in May, KFMT reported that a batch of 12 new cases of COVID-19 brought the total found at the plant to 40. Reportedly, Lincoln Premium Poultry had introduced a mandatory mask policy, a $2 per hour hazard bonus, and regular deep cleaning among other initiatives. In a week, the number reached 54, according to the Fremont Tribune. "We will continue to do everything we can to support our team members during this time," Jessica Kolterman, director of Corporate and External Affairs, announced. The following month, KETV reported that two workers had died of COVID.
However, looking back on the plant's success, Kolterman told the Fremont Tribune "It doesn't surprise me that we've been able to do it." Next, we'll see how their farmers cope.