Costco is trying something new: It’s working with farmers to help them buy land and equipment to grow organics, according to The Seattle Times in Seattle, Wash. Costco is already loaning money to help San Diego, Calif.-based Andrew and Williamson Fresh Produce buy equipment and 1,200 acres of land in the Mexican state of Baja California.
Costco is looking at expanding the initiative. The idea is to ensure a greater supply of organic foods at a time when demand is soaring but supply has not kept up.
While other retailers have loan programs for suppliers to upgrade equipment and offer financial incentives such as advance payments or long-term contracts, helping farmers buy land to grow organics appears to be unusual in the industry.
The nascent program joins a list of other Costco food initiatives that try to ensure the warehouse giant can meet the voluminous demand of its customers.
The Issaquah, Wash.-based retailer, for instance, has a poultry plant in Alabama dedicated to raising chickens for the fresh meat and rotisserie chickens it sells.
Costco bought cattle and is contracting with owners of organic fields in Nebraska to have ranchers there raise the livestock to ensure supply for its organic ground-beef program.
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