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

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.

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Source: Insider

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

AP Photo/Nati Harnik

Source: NPR

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

Source: CNN

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

AP Photo/Nati Harnik, File

Source: CNN

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

AP Photo/Nati Harnik, File

Source: Omaha World-Herald

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

Source: CNN

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

Source: Omaha World-Herald

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

Source: Omaha World-Herald

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

Source: Insider

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

Source: Insider

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

AP Photo/Nati Harnik

Source: Insider

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

Source: Costco