Costco Plans for New Chicken Plant in Nebraska

Costco takes its rotisserie chicken supply chain under its wing.

Rotisserie Chicken

The Seattle Times reports that Costco is on track to open a massive chicken operation in eastern Nebraska next year. The company plans to bring more the chicken supply chain under its control. 

The retailer's $5 rotisserie chicken is a customer favorite, but has taken a loss lately as the bird is placed at the back of the stores. While other stores have raised prices in the wake of the avian flu epidemic, Costco has held its rotisserie chicken prices at $4.99. 

However, the company is looking for ways to cut prices and ensure a steady supply as more birds are sold as parts, the Seattle Times reports. The company's new $300 million plant will produce 100 million chickens each year — just a quarter of the company's annual U.S. demand. The plant will allow the retailer to remove costs and make the price of the chickens $5 over the long term. 

The plant is expected to open a year from now and will revolve around a hatchery, feed mill and processing plant in Fredmont, Nebraska. According to the Fremont Tribune, there will be hundreds of new chicken barns in Nebraska and parts of Iowa to be operated by producers under long-term contracts with Costco.