See inside Costco's controversial Nebraska chicken plant that produces millions of $4.99 rotisserie chickens each year

Mary MeisenzahlJun 18, 2022, 19:04 IST

Tim Boyle / Getty

Costco owns a chicken processing facility in Nebraska that supplies many of its rotisserie chickens.
Two Costco shareholders filed a lawsuit saying the company mistreats its chickens at the facility.

Costco is famous for its $5 rotisserie chicken, which hasn't increased in price even as inflation makes other groceries pricier.

Abigail Abesamis

Costco sold 106 million rotisserie chickens in 2021 alone.

Paul Sakuma/Shutterstock

In 2018, Costco constructed a plant for Lincoln Premium Poultry, a company started by the warehouse club.

AP Photo/Nati Harnik

The plant opened in 2019, with hopes of giving Costco control of the entire chicken supply line, from production to processing and selling.

AP Photo/Nati Harnik

Nebraska was chosen for the plant because it had grain, water, and labor, which are the three main costs associated with chicken processing.

AP Photo/Nati Harnik

Controlling the entire process allows Costco to save as much as 35 cents per chicken.

AP Photo/Nati Harnik, File

In hopes of these savings, Costco invested $450 million in the facility.

AP Photo/Nati Harnik, File

By owning its own facility, Costco can also select for chickens that best fits its sales needs.

AP Photo/Nati Harnik

Chicken producers are breeding larger chickens across the industry, which can be sold for more as their individual parts.

AP Photo/Nati Harnik

The doesn't work for Costco, which needs to keep chickens around six pounds to sell as rotisserie chickens.

AP Photo/Nati Harnik

"We were having trouble getting the size bird we wanted on a consistent basis. We couldn't take a seven-pound bird or an eight-pound bird and make it work," senior VP of fresh foods at Costco Jeff Lyons said. "They're too big. They wouldn't even fit on our rotisserie line."

AP Photo/Nati Harnik

"We were having trouble getting the size bird we wanted on a consistent basis. We couldn't take a seven-pound bird or an eight-pound bird and make it work," senior VP of fresh foods at Costco Jeff Lyons said. "They're too big. They wouldn't even fit on our rotisserie line."

The facility is slated to eventually produce 2 million chickens each week, up to 100 million per year.

AP Photo/Nati Harnik

That's equivalent to about a third of Costco's chicken needs, which include both rotisserie chickens and separate chicken parts, like breasts, thighs, and wings.

AP Photo/Nati Harnik

To meet this demand, Costco has to work with over 500 chicken farms.

AP Photo/Nati Harnik

All those chickens need 2,000 acres each worth of corn and soybeans per week to feed them.

AP Photo/Nati Harnik

The plant employs about 800 workers to process these chickens.

AP Photo/Nati Harnik

The plant has been the source of some controversy in Nebraska.

AP Photo/Nati Harnik

The local school board opposed construction because of traffic and possible depletion of the water supply.

AP Photo/Nati Harnik

Other local advocacy groups said that they opposed the plant because of the control Costco could exert over smaller independent farmers.

AP Photo/Nati Harnik

Animal rights groups have also targeted the facility.

AP Photo/Nati Harnik

In 2021, Mercy for Animals visited the facility and described conditions including "chickens struggling to walk under their own unnatural weight," "bodies burned bare from ammonia-laden litter," "dead days-old chicks," and "piles of rotting birds."

AP Photo/Nati Harnik

In 2021, Mercy for Animals visited the facility and described conditions including "chickens struggling to walk under their own unnatural weight," "bodies burned bare from ammonia-laden litter," "dead days-old chicks," and "piles of rotting birds."

In response to the report, Costco said it is "committed to maintaining the highest standards of animal welfare, humane processes, and ethical conduct throughout the supply chain,"

AP Photo/Nati Harnik

In response to the report, Costco said it is "committed to maintaining the highest standards of animal welfare, humane processes, and ethical conduct throughout the supply chain,"

Two Costco shareholders filed a lawsuit in June accusing the company of "illegal neglect and abandonment" in the Nebraska plant.

AP Photo/Nati Harnik

Costco hasn't responded to inquiries about the lawsuit, but the company has a page on its website describing its commitment to animal welfare.

AP Photo/Nati Harnik

"Animal welfare is part of Costco's culture and responsibility, and we are committed to a global approach to Animal Welfare. We are working toward a uniform program in the countries/regions where we operate while respecting that each country may have its own regulatory and social requirements in place," the page reads.

Tim Boyle / Getty

"Animal welfare is part of Costco's culture and responsibility, and we are committed to a global approach to Animal Welfare. We are working toward a uniform program in the countries/regions where we operate while respecting that each country may have its own regulatory and social requirements in place," the page reads.

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See inside Costco's controversial Nebraska chicken plant that produces millions of $4.99 rotisserie chickens each year

Costco is famous for its $5 rotisserie chicken, which hasn't increased in price even as inflation makes other groceries pricier.

Costco sold 106 million rotisserie chickens in 2021 alone.

In 2018, Costco constructed a plant for Lincoln Premium Poultry, a company started by the warehouse club.

The plant opened in 2019, with hopes of giving Costco control of the entire chicken supply line, from production to processing and selling.

Nebraska was chosen for the plant because it had grain, water, and labor, which are the three main costs associated with chicken processing.

Controlling the entire process allows Costco to save as much as 35 cents per chicken.

In hopes of these savings, Costco invested $450 million in the facility.

By owning its own facility, Costco can also select for chickens that best fits its sales needs.

Chicken producers are breeding larger chickens across the industry, which can be sold for more as their individual parts.

The doesn't work for Costco, which needs to keep chickens around six pounds to sell as rotisserie chickens.

"We were having trouble getting the size bird we wanted on a consistent basis. We couldn't take a seven-pound bird or an eight-pound bird and make it work," senior VP of fresh foods at Costco Jeff Lyons said. "They're too big. They wouldn't even fit on our rotisserie line."

The facility is slated to eventually produce 2 million chickens each week, up to 100 million per year.

That's equivalent to about a third of Costco's chicken needs, which include both rotisserie chickens and separate chicken parts, like breasts, thighs, and wings.

To meet this demand, Costco has to work with over 500 chicken farms.

All those chickens need 2,000 acres each worth of corn and soybeans per week to feed them.

The plant employs about 800 workers to process these chickens.

The plant has been the source of some controversy in Nebraska.

The local school board opposed construction because of traffic and possible depletion of the water supply.

Other local advocacy groups said that they opposed the plant because of the control Costco could exert over smaller independent farmers.

Animal rights groups have also targeted the facility.

In 2021, Mercy for Animals visited the facility and described conditions including "chickens struggling to walk under their own unnatural weight," "bodies burned bare from ammonia-laden litter," "dead days-old chicks," and "piles of rotting birds."

In response to the report, Costco said it is "committed to maintaining the highest standards of animal welfare, humane processes, and ethical conduct throughout the supply chain,"

Two Costco shareholders filed a lawsuit in June accusing the company of "illegal neglect and abandonment" in the Nebraska plant.

Costco hasn't responded to inquiries about the lawsuit, but the company has a page on its website describing its commitment to animal welfare.