The Hidden Costs Behind Costco’s $4.99 Rotisserie Chicken

As discussed in our newly released fact sheet, the very same Costco that is loved by liberals for its above-average worker benefits is now beginning to factory farm in order to continue to stock its warehouses with $4.99 rotisserie chickens. 

Factory farms at their core mean farmer and farmworker abuse, water and air pollution, and a whole list of community economic burdens. While it’s great that Costco is paying warehouse club workers a livable wage, the company’s involvement in factory farming is a far cry from socially responsible.

Costco’s Factory Farming Secret 

In 2016, Costco disclosed plans to construct a new slaughterhouse in Fremont, Nebraska that, when operating at full capacity, will slaughter 1.7 million chickens per week. 

We did the math to see the quantitative impact Costco’s slaughterhouse will actually have in the midwest -- which is already overrun with factory farms.

Costco sold 78 million rotisserie chickens in 2014. Costco has stated that the construction of this new slaughterhouse will allow the company to guarantee supply, maintain its $4.99 price, and break out of the current monopoly held by huge poultry integrators. 

Iowa is already overburdened with more than 10,000 factory farms. Costco’s supply goal will require over 500 more barns to be built in Nebraska and western Iowa. Among these 500 barns, it recently came to light that at least 132 of them will be owned by an investor from North Carolina -- just the kind of absentee ownership you would expect in the factory farm model. 

It would take 125 new factory farms in order to build these 500 new barns -- and in total, these farms will need to produce 100 million chickens annually. 

How Costco is Screwing Farmers

In order to operate 125 new factory farms, Costco plans to utilize a practice called “vertical integration” where local farmers can sign up to raise Costco-owned chickens. In this system, Costco enters into contracts with individual farmers. Costco provides each farmer with chicks and feed, but the trick here is that Costco then gets to dictate how these farms must operate. While Costco claims that its contracts are better than typical poultry production contracts that are famous for screwing farmers, the basic formula is the same. 

To grow chickens for Costco, farmers will need to raise roughly $500,000 per barn. To meet this goal, sometimes farmers will have to borrow money against their own farms — especially if any unforeseen or extra costs arise like expensive barn upgrades and waste management. Those expenses are on the farmer. 

Meanwhile, contracts won’t always guarantee farmers make enough income in order to pay off any incurred barn debts, and Costco can cancel contracts with farmers at any time. 

Even worse, it is unlikely that farmers could use their barns to raise chickens for another buyer, so they face a distinct disadvantage when negotiating with Costco - hardly the social responsibility the company is known for.

It’s Not Just Farmers

The Midwest is already handicapped by severe pollution from industrial agriculture. In Iowa, factory farming has already damaged more than 1,000 miles of rivers and streams and 59,000 acres of lakes, ponds, and wetlands in the state. In 2017, Iowa had a record of 37 total “Swimming Not Recommended” advisories at state park beaches due to high levels of disease-causing toxins produced by blue-green algae blooms that are fed by pollutants from industrial agriculture. 

The state’s largest drinking water utility, the Des Moines Water Works, operates one of the most expensive nitrate removal systems in the world in order to provide clean drinking water for residents in the state’s largest city-- because by the time it reaches Des Moines, the water is heavily polluted by contamination from industrial agriculture (we recently sued the state of Iowa for failing to protect Raccoon River, the main drinking water source, for the use and benefit of Iowa residents).

In 2015, nitrate pollution, which has been linked to certain cancers, birth defects and other diseases, exceeded federal limits in 11 of the state’s public water supplies. Countless private drinking water wells are also impacted.

Let’s Not Play Costco’s Game of Chicken

To sum it up: factory farms create colossal volumes of waste, exploit workers, harm animal welfare, fuel antibiotic resistance and climate change, and undermine the economic vitality of our rural communities. 

There are dozens of reasons this new Costco slaughterhouse is a bad idea. The 500 new barns alone will have an enormous environmental impact, but it becomes an almost unfathomable problem when combined with the existing burden of Iowa’s 10,000+ factory farms. 

This buildout will only exacerbate existing air and water pollution and will help to entrench factory farming when people throughout the midwest -- including in Iowa and Nebraska-- are demanding a moratorium on factory farms. 

As our campaign to win a moratorium on factory farms in Iowa heats up, we’ll say it again: we don’t need a new wave of Costco-fueled industrial poultry farms in Iowa. Instead, it’s time Iowa elected officials enact a moratorium on new and expanding factory farms. Check out our new fact sheet to learn more.