Costco invests $300m in feed mill, poultry production complex

By Aerin Einstein-Curtis

- Last updated on GMT

© iStock
© iStock

Related tags Chicken

With site groundbreaking, Costco’s $300m investment in a new feed mill, chicken production facility and hatchery starts to take shape.

The project in Fremont, Nebraska broke ground Monday, said a spokesperson with Lincoln Premium Poultry, the company set to manage poultry production for Costco Wholesale Corporation, which owns the facility.

It is expected to generate about $1.2bn in economic effect annually and take about two years to finish building, with production beginning in April 2019, according to the Greater Fremont Development Council.

The different sections of the site including feed mill and production facility are being constructed simultaneously, the spokesperson told us. The total site is about 400 acres, but the complex is not expected to take the full space, some of the acreage is set to act as a buffer zone.

In addition to work on the site, the company is in the process of establishing a network of grower farms in the region, she said.  

Facility and operational details

When operational, the complex is expected to draw employees from nearby urban centers and from within the rural community, said Cecilia Harry, executive director of the Greater Fremont Development Council. It is looking for about 800 employees.

“The majority of the country is rural,”​ she told us. “There’s a lot of existing family farmers in the area, but the ability to build the grower network is there.”

Her organization has been working on the project for the last two years.

Similarly, the feed mill is expected to draw ingredients from farms in the area, said the Lincoln Premium Poultry spokesperson. When operational, it will source about 350,00 bushels of corn a week and 3,000 tons of soybean meal and produce about 15,000 tons of finished poultry feed.

“We have great farmer partners in the region to work with us on the grain side and on growing chickens,”​ she said.

When at full production, the processing facility is expected to produce about 2m chickens a week for sale in Costco stores, according to information from the Development Council.

Additionally, the company is making an effort to reduce the environmental effect that the complex brings, said the spokesperson. Costco has been interested in being a good steward of the land for some time.

With the complex, the work to improve environmental consideration includes efforts to limit water use below industry averages, she said. Water saving measures are set to be implemented in the facilities.

Work will also be done with farms raising the birds to establish a nutrient management plan, she said. Farmers will be required to have a permit from the Nebraska Department of Environmental Quality regarding environmental stewardship.

“All row crop farmers will have a new market for corn and soybeans which will be utilized in the poultry rations,”​ said Nebraska Department of Agriculture Director Greg Ibach. “Costco has also indicated a willingness to be a great partner for Nebraska as a whole, going above and beyond all environmental requirements and offering new and innovative contractual relationships that will be revolutionary for the poultry industry.”

The site faced some initial challenges including from area residents who filed a lawsuit​ regarding the project and seeking an injunction on it in July of 2016. That case addressed elements of the way the information was released and how the project was handled by the city and company.

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