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  • Costco is cheap really cheap.

  • This chicken costs five dollars. These birds are an iconic

  • Costco product. Costco sells about 60 million of them every

  • year. Sounds like a great moneymaker right. Wrong. Costco

  • sells these chickens at a loss sometimes up to 30 to 40

  • million dollars per year. The chickens are a lure to get

  • customers in the door. They're placed strategically at the

  • back of every Costco so customers might pick up other items

  • along the way.

  • That's why Costco wants to keep the price so low.

  • The trouble is that chicken prices have crept up over the

  • last 10 years and the industry is practically an oligopoly

  • run by the likes of Tyson and Perdue. Costco like most

  • American Grocers buys from these behemoth companies because

  • there's no other option. But not anymore. In 2016 Costco

  • announced its plans to open a chicken farming operation in

  • eastern Nebraska. It will own the whole supply chain from

  • baby chicks to feed to the final product. This operation

  • will provide Costco with 40 percent of its yearly chicken

  • needs about 100 million chickens.

  • That's one hundred million chickens. It won't have to buy

  • from Tyson or Perdue.

  • But here's the problem. Large scale chicken farming doesn't

  • really exist in Nebraska.

  • So Costco is paying the not so cheap price of 440 million

  • dollars to make it happen.

  • Costco's chicken operation will process about 2 million

  • chickens every week. Here's how it will work. Costco will

  • own the chickens feed and the processing plant. Local

  • farmers will own the barns and equipment and raise Costco's

  • chickens to maturity. Then the chickens will go to the

  • plant in Fremont Nebraska where workers will prep the birds

  • for sale. Some will be sold in parts but most will become

  • those famous rotisserie chickens. This model is called

  • vertically integrated agriculture. It's a relatively new

  • method of farming.

  • But today it's responsible for 95 percent of the nearly 9

  • billion chickens produced in America each year. So how did

  • we get here.

  • In the early 20th century chicken meat was merely a

  • byproduct of egg production. The only chickens sold for

  • meat were older hens who could no longer lay eggs. So it

  • was a rare and expensive product even though the meat would

  • be tough and unpalatable. By today's standards. But that

  • changed rapidly after World War 2.

  • A couple of large companies Tyson and Perdue found ways to

  • increase the number of chickens they would raise through

  • the industrial model where large numbers of similar breeds

  • are raised in confinement in houses. And the discovery that

  • antibiotics are administered in small doses daily not only

  • keep the chickens healthy but would bring them to market

  • weight faster.

  • Farmers can now raise fatter chickens with less feed in less

  • time and Americans quickly gained a taste for them. In 2012

  • the average American consumed four times as much chicken as

  • they did in 1950. More people eating more chicken sounds

  • great for farmers right.

  • Not really independent farmers struggled to keep up with

  • costly new equipment so small to mid-sized farms began

  • disappearing vertically integrated mega farms took their

  • place producing twenty nine percent of chickens in 1967 but

  • ninety five percent today.

  • By 2017 the industry produced over 30 billion dollars worth

  • of chickens so chicken went from a luxury product to the

  • most commonly consumed meat in just a few decades.

  • But this system has its own problems. The modern chicken

  • industry has faced a slew of criticisms inhumane treatment

  • of the chickens devaluation of property near processing

  • plants abusive treatment of plant workers environmental

  • degradation and exploitative farming contracts. The

  • contracts especially have come under fire in recent years

  • as farmers speak out in documentaries and file lawsuits

  • against their former employers. Just ask Craig Watts who

  • farms chickens for produce from 1992 to 2016.

  • You just turned over control of your farm to that company.

  • You did it the way they told you to do it. Whether it made

  • sense to you or not. But at the end of the day you could

  • follow those to a tee and they could still find something

  • that you didn't like. It was like hitting a moving target.

  • A typical mega farm has three to five chicken barns each of

  • which costs the farmers about two hundred thousand dollars.

  • Journalist Christopher Leonard argued in his 2014 book The

  • Meat Racket that this system makes farmers into modern day

  • sharecroppers trapped in indebted servitude on the edge of

  • bankruptcy but taking their business elsewhere isn't an

  • option for chicken farmers. Chicken companies essentially

  • have spheres of influence across the US. And most farmers

  • only live close to one of them. To top it off wholesale

  • chicken prices have shot up over the last 10 years. Recent

  • lawsuits alleged that this is because the biggest chicken

  • companies illegally aspired to fix prices. To put it simply

  • chicken companies are making huge profits but consumers are

  • paying more and many chicken farmers live in poverty.

  • This is the industry that Costco is about to enter but it

  • wants to do it differently.

  • While the specifics of Costco's contracts are confidential a

  • representative explains the basics to CNBC. Let's take a

  • look. First Costco offers 15 year guaranteed contracts.

  • Most contracts are much shorter sometimes only lasting one

  • year or even just one flock of chickens. This should give

  • Costco's farmers time to pay off their two million dollar

  • loans. However Costco can also cancel a contract with 90

  • days notice.

  • I didn't I don't know why we would accept a contract unless

  • there is some gross negligence on the part of on behalf of

  • the broker. I think that's the reason those types of

  • arrangements are there.

  • Christopher Leonard argues that similar terms in other

  • contracts make it too easy for companies to cancel giving

  • them a disproportionate amount of power over the farmers.

  • Second Costco will pay a baseline amount for each flock

  • regardless of quality as well as bonuses for good flocks.

  • If a farmer consistently underperforms they'll be placed in

  • a grower improvement program which basically says grower

  • growers here's a challenge we see and this is a new

  • benchmark we want to help you get to so that you're

  • performing better and working with them.

  • What's the former Perdue farmer sees the program as nothing

  • more than a first step to a canceled contract.

  • That's pretty common in poultry contracts. One bad luck can

  • make a three long average really bad in a hurry.

  • Third Costco is working with the Nebraska Department of

  • Environmental Quality to meet standards that are not

  • required by state or federal laws. But researchers from

  • Johns Hopkins argue that regulations can only do so much to

  • prevent the worst outcomes of large scale vertically

  • integrated agriculture.

  • That part of Nebraska has somewhat of a fragile ecosystem

  • and and the the waste that is generated every shadow which

  • is put on fields is great fertilizer. While the right

  • quantities it is but if you're producing 2 million chickens

  • in a really small area it becomes a runoff problem.

  • Finally Costco will pay its 1000 meatpacking plant workers

  • fifteen dollars an hour well above Nebraska's nine dollar

  • state minimum wage. However that's still significantly less

  • than the starting salary at Hormel plant in the 1990s

  • Costco's chicken operation will add an estimated one point

  • two billion dollars 10 Nebraska's annual GDP so it could be

  • a boon for Nebraska farmers who have signed up hope that

  • adding chickens will bolster their farms for years to come.

  • One of the most exciting parts of adding chickens to our

  • operation is that I have a daughter who is graduating from

  • University of Nebraska Lincoln because of the chicken

  • operation we're able to bring her home.

  • But others disagree. Randy Rupert a longtime resident of

  • eastern Nebraska formed a group specifically to oppose the

  • move.

  • We don't want vertical integration in Nebraska. It's

  • wrongheaded it's bad for the environment it's bad for

  • farmers it's bad for towns are our mantra is This is not

  • farming this is this is industrial production of widgets

  • Costco's chicken operation won't open for another year.

  • And besides the industry as a whole is moving towards

  • organic chicken. But with the State of the industry as it

  • is now it's worth asking is five dollars for a whole

  • chicken just too good to be true.

Costco is cheap really cheap.

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B1 中級

なぜコストコは独自の養鶏場を開設するのか? (Why Is Costco Opening Its Own Chicken Farm?)

  • 73 3
    李柏毅 に公開 2021 年 01 月 14 日
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