It's only $4.99. But Costco's rotisserie chicken comes at a huge price

[Demovictory9]

https://www.cnn.com/2019/10/11/business/costco-5-dollar-chicken/index.html

It's only $4.99. But Costco's rotisserie chicken comes at a huge price
By Nathaniel Meyersohn, CNN Business

Updated 8:06 AM ET, Fri October 11, 2019

At the back of Costco's stores, past the televisions, jewelry, jumbo-sized ketchup jugs and tubs of mixed nuts, is one of the retailer's most prized items: The rotisserie chicken that costs just $4.99.

Cheap Kirkland Signature rotisserie chickens aren't only a quick way for families to get dinner on the table. For Costco, the chickens are a lure, pulling customers into stores and getting them to browse the aisles, adding sometimes hundreds of dollars worth of items to their shopping carts before they pick up that bird.

The chickens have become almost a cult item. 91 million were sold last year, double the number from a decade earlier. They have their own Facebook page with nearly 13,000 followers.

So Costco is willing to go to extreme lengths to keep its chickens at $4.99. For the past few years, it's been recruiting farmers for this moment: The official opening of a sprawling, $450 million poultry complex of its very own in Nebraska.

It's a highly unusual move for one of the world's largest retailers. Costco will control the production process from farm to store, making key decisions down to the grain chickens eat and the type of eggs hatched. Costco has even put its socially-conscious corporate reputation on the line, fending off local critics who have rallied against the Nebraska operation.

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

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Chicken operations in Nebraska
That's why Costco is seizing control of its chicken supply chain. Costco believes it can slash costs by bringing production in house, saving up to 35 cents per bird.

It has already done the same with hot dogs.

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The retailer is building a poultry complex in Fremont, Nebraska, a farming town near the Iowa border. The complex includes a processing facility, hatchery and feed mill.

The nearly 400,000 square-foot plant in Fremont will employ 950 workers. The plant will take 45 weeks to ramp up to full production. Once it's at full speed, the plant will process about 100 million chickens a year, or 40% of Costco's annual chicken needs. Costco will process around two million birds a week in Nebraska to supply to stores on the West Coast.


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Robert Taylor, a professor emeritus of agricultural economics at the University of Auburn and a longtime critic of the poultry industry, blasted Costco's contracts. "This particular form of contract agriculture essentially makes the farmer an indentured servant," he said. "The farmer is basically reduced to a chicken house janitor."

https://www.cnn.com/2019/10/11/business/costco-5-dollar-chicken/index.html

[Wellstone ruled]

1. The last paragraph tells it all.

Costco is just following the Smithfield and Tyson pork model. Oh,lets not forget what Walmart is doing to the Dairy Industry in the Mid West. One supplier,11 farms,44 thousand Cows,over a five state area.

[DinahMoeHum]

11. Hell, the poultry industry has done this for decades. . .

Last edited Fri Oct 11, 2019, 02:22 PM - Edit history (1)

Tyson, Perdue, Pilgrim's Pride, Foster Farms, etc.

[Wellstone ruled]

22. Singing to the

choir on that one. Came from the Ag Business and did five decades in the Wholesale food related industries.

[misanthrope]

16. You mean the one that can't even get the name of the school right?

It's Auburn University, not University of Auburn.

[Bev54]

25. You are right!

The farmers are indentured servants to big business and many are going broke because of it. It is why in Canada our dairy and poultry industries are covered under supply management. International big business is trying very hard (and so is your illustrious president) to break our system so they too can control our food sources. We want to protect our food sources and not be at the mercy of large business interests. Our farmers are paid a fair price for the product based on a cost of production formula, it not only keeps our family farms working but provides them with the resources to keep up with technology. I think if you spoke to actual family farmers in the US (not business vertical integrated farms) they too would love our system, if they knew how it operated and did not get their information from business work tanks such as the Fraser Institute.

[Wellstone ruled]

27. Fact,in 1960 my best bud and I

did crop and livestock surveys for the USDA in Wisconsin. Interesting job,tons of fun for a couple of Farm Guys,made some extra bucks as well. Once you sign on to do this type of work,you are buried with what is white papers from Lobbying Interests. Main theme being,cheap food policy was the bottom line. Interesting thing we learned was this,within 48 hours of our survey results,the Chicago Board of Trade reflected our inputs.

My boyhood Bud is still doing those same surveys yet this day and he is 79 and still banging around the back roads of Wisconsin in his beater with a heater.

And yes,we now have a new type of Tenant Farmer,he draws a pay check from the likes of Tyson,Western Beef,Cargill,and ADM.

[jberryhill]

2. People should have to pay more for food

$4.99 is ridiculously cheap. People should be charged more.

If someone is going to sell food this cheap, then obviously those are the sorts of measures needed. It's not as if there is free money shaking out of the air for people along the supply chain.

[SlogginThroughIt]

4. Not that I disagree but thats a very simplistic

Not that I disagree but thats a very simplistic way to look at a very complex issue.

[snowybirdie]

5. I guess if you can afford that

But Many can't.

[hedda_foil]

8. Those who can't also can't afford to join Costco and spend big bucks there.

[Cuthbert Allgood]

10. It's $60 a year and the savings you get for buying in bulk are huge.

I know plenty of people on a tight budget that use Costco to make it. It takes planning ahead and not impulse buying, but it does work.

[Newest Reality]

6. Isn't it a typical sales model, too?

There have been loss-leaders for a long, long time. Its a strategy.

In food stores, they would often have a ridiculously low price on an item, (like milk in the dairy section) that usually required you to traverse the store to get to it.

That had two advantages: to get you to their store, of course, and with the idea that you may pickup other items on your way "while you are there".

Same thing here. It is not about the price reduction because that is always made up for in the price of other items. They are not taking a loss. It is profitable.

[dalton99a]

7. And Costco membership costs $60 a year

Costco collected $2.5 billion in membership fees in 2015

[Newest Reality]

14. Wow.

Thanks for the info.

Cheap chickens for all!

[brooklynite]

23. "loss leader" (Noun): a product sold at a loss to attract customers.

How much should Trader Joes have to charge for their House wine?

[Autumn]

39. They should cost more. I live in a rural area, it costs 12 dollars to process a chicken if you

don't do it yourself.

[cbdo2007]

3. So what's the problem with this? This is what all the other places are doing...

And Costco does quite a bit to make things better than the other companies do. Yeah that's a lot of chickens but my family enjoys probably 20 of those chickens a year.

[Hoyt]

9. I'm having a hard time seeing the issue here. Sure, it's sad for some farmers, but my granddad

scratched out a living on a small dairy farm -- outhouse rural -- contracting directly with local milk producers 70+ years ago.

This is not new. And Costco is considered a very employee friendly company.

[SWBTATTReg]

12. I hope that the family farmer and as such don't blame the democrats for this crap...it's the...

billionaires/millionaires (with their obscene tax cuts) that are doing this. Tax cuts provided by the repug-led tax cut of 2017. Thus hurting more and more family farms that anyone could ever do (competition, eh, isn't it great?). rump again has taken these farmers out behind the shed and whooped their ass. How can they possibly compete fairly or survive on subsistent wages?

[MineralMan]

13. So. Everyone must buy their chickens from the local neighborhood

chicken raiser? Now Costco is going to raise its own chickens instead of buying them from chicken raisers. That way, it can standardize the size of the chickens and keep the price down to $4.99 for a fully-cooked rotisserie chicken. That's just terrible! People should have to pay $6.99 or $8.99 for their chicken that feeds them for three days, dammit! It's unfair that Costco can sell them so cheaply.

I don't get it, I guess...

All corporations bad, I guess. Because...well..just because...

[customerserviceguy]

15. Agreed

And how many people would have had chicken that day if they had not stopped at Costco? It's probably more nutritious than a fast-food meal from a drive-thru.

If you've got yuppie money, then you can afford to support all of the boutique farmers in your area.

[MineralMan]

18. Well, some will say it's wrong to each chickens, anyhow.

Costco uses those chickens as a loss leader to get people into the store. It works great. Businesses have been doing that since forever. Still, Costco has to come close to breaking even on their $4.99 chicken or it will eat into their profitability.

So, their answer is to create their own chicken raising and processing facility to ensure a steady supply of right-sized chickens. One could argue that the chickens will be raised in inhumane conditions. That could well be true. Others will argue that we should all be eating a plant-based diet, and they have a point as well.

However, people eat chickens. Costco makes that affordable. A single rotisserie chicken can truly end up as three meals for a small family. Retired people sometimes make them go even farther.

Costco pays its employees well. It's a model business in many ways. It's not a greedy corporate giant. That would be Perdue foods or any of the Koch Brothers food production companies. Costco is OK.

People like Costco's $4.99 chicken. I don't shop a Costco, but I've eaten their chicken. It's good, wholesome food at a very low price. Lots of people depend on those chickens to keep enough protein in their diet.

[dalton99a]

21. +1. I'd say many Costco members view the $4.99 chicken and $1.50 hot dog & drink as perks

that they pay for in their annual membership fees (which are not cheap)

[MineralMan]

30. I'm not a Costco member, although I used to be.

We used to shop there for paper goods, over-the-counter meds, etc. My wife even got her eyeglasses there. We let our membership lapse, though. I got tired of wrestling huge packages of toilet paper and paper towels. America's Best has even lower prices on eyeglasses, anyhow. Of course, they come from China, but pretty much all eyeglasses are made in China now, anyhow.

I suppose that over a year's time, savings on those rotisserie chickens could offset the membership cost, just by themselves, though. A lot of people buy a rotisserie chicken every week. It's a staple food in many households.

[Submariner]

33. I also like today's price of $2.23 per gallon of Costco gas

when the other stations like Shell and Chevron are 2.59 to 2.89.

[customerserviceguy]

35. Well stated. n/t

[wryter2000]

17. Plus

No one makes you pick up other items in the store.

If I had to feed a large family, the price of eggs, butter, and mayo alone would pay for the membership.

[MineralMan]

20. If you're smart, though, you will pick up other items.

There are big savings to be had on many things from Costco. You do have to buy them in large packages, but that's not a problem for many people. Things like toilet paper, paper towels, breakfast cereal and many other products from Costco cost way less per unit used than the same products from the supermarket.

Costco is how people on limited incomes make do. If they can buy in quantity less often, they have more money to spend.

Attacking Costco over its plan to raise its own chickens is just plain stupid.

[brooklynite]

26. No: everyone must raise their own chickens...

[MineralMan]

28. A couple of my Hmong neighbors do just that.

For eggs and meat. The other day, the chickens at my across the street neighbor's house somehow escaped from their enclosure and were out scratching in his lawn. So, I went across the street and alerted the family that the chickens were out. It was great fun helping them chase the things down and return them to their pen. Even the small children were out trying to catch a chicken or two. I think there were at least 20 of them.

Lots of laughter. Hmong families raise chickens and quail and turn their back yards into small farms. Very industrious.

[Kaleva]

19. I wait till the local grocery store drops the price to $1.99 before even considering buying .

[Turin_C3PO]

24. Seriously?

I’ve never seen rotisserie chicken anywhere near that cheap. I should move to where you live lol.

[MineralMan]

29. Our supermarket has them for $5.99 one day a week.

However, their chickens are much smaller than the Costco ones. I still buy one a week, though. Two meals.

[SeattleVet]

31. We thought about getting one at a local supermarket one evening...

they were more expensive than the Costco ones, and the 2 or 3 they had left had been sitting in the warmer for a long time and looked like they had either deflated or melted. We passed.

The Costco ones are very fresh and of a consistent size (hence the main reason for Costco getting into the other end of the supply chain), and we generally get 3 or 4 meals out of them.

[MineralMan]

32. Our supermarket's chickens are pretty good.

It varies from place to place, I suppose.

[Kaleva]

37. Freshly made it's $5.99. Then it drops to $3.99 and finally $1.99

"Rotisserie chicken corn chowder

Rotisserie chicken can be bought at the deli at a local store for $1.99 when it's priced to sell. Canned veggies and soup can be bought at Family Dollar for $.50 a can when it's on sale there.

Ingredients:

2 Tablespoons butter, divided $.16

1 Teaspoon Italian Blend Seasoning $.03

2 Medium Sized Potatoes, diced $.13

One Can Cream of Chicken Soup $.50

½ Small onion, diced $.05

One Can Cream Style Corn $.50

3 Cans of Milk (use the empty soup can to measure) $.32

One Can Whole Kernel Corn $.50

½ Rotisserie Chicken Pulled apart and chopped $1.00

Salt/Pepper to taste

Subtotal- $3.19

Instructions:

In a soup or stock pot over medium heat, add 1 tablespoon butter, diced onion, Italian Seasoning and diced potato.

Then saute until tender (about 5 minutes). The potato will partially break down and create a starch that will help thicken the chowder.

Finally, while that cooks, pull apart and chop the chicken. Add to the pot and mix well.

Add the cans of soup and corn, mix well.

Stir in the milk and last tablespoon of butter. Salt & Pepper to taste.

Let the chowder cook on medium, stirring occasionally for about 10 minutes.

Then, reduce to low and simmer for another 5 minutes or until ready to serve.

This serves 4 people so cost per serving is $.80

Add
8 fl. oz. 2% milk $0.18
1 banana $0.25
1 slice bread $0.09
2 tsp of soft margarine $0.04

Total cost per serving is $1.36"

https://www.democraticunderground.com/11283858#post42

[mrs_p]

34. Last night's dinner

And tonight’s too. It costs 3-4 bucks more at the grocery store and they aren’t as good.

[not_the_one]

36. my question would be...

Since they need smaller chickens to fit their rotisseries, does that allow them to pump fewer growth hormones into them, allowing them to grow normally?

Some of the large breasted chickens have difficulty standing due to the excessive hormones they are fed.

If they are allowed to grow normally (as they possibly can being grown in a "chicken factory" ), then that is a good thing.

Just as an aside, 55 years ago my parents decided to try chicken farming, for eggs. So my sister and I had to help feed, water the chickens, and collect the eggs, and wash them.

First off, the smell. Chicken houses are notorious for the stench.

Second, having to walk around in flip flops in chicken shit... There was no way of getting out without having your feet covered... ANY shoes would be ruined, hence the flip flops.

Chickens are constantly clucking and screeching. They make quite a racket.

Did you know that you can be standing in the middle of thousands of chickens, enveloped in the cacophony of chicken noise, and if you whistle, they will all fall silent?

Interesting...

[Polybius]

38. For those of you with no willpower, that's on you

I can easily go in Costco and buy just a rotisserie chicken. Sometimes the cashier says "that's all you're buying?" but it doesn't faze me. Sometimes I even go there just for a $1.50 hot dog.

[frogmarch]

40. Crap! My granddaughter and

her husband and kids live in Fremont, Nebraska. I wonder if they'll move.

Thanks for the link.