Costco Wholesale Corp has announced this week that it plans to expand business with chicken supplier Pilgrim’s Pride Corp. Costco said the expanded partnership with Pilgrim’s Pride is designed to meet a projected annual unit growth of five to eight percent over the next few years.
"We’ve got a long-term deal with Pilgrim's that we will continue to extend because they are helping us achieve our goals," said Jeff Lyons, Senior VP at Costco, in an interview with Reuters. "It will continue and it will expand. We are working on projects with them right now."
News of the partnership has brought up some conflict, however. Costco recently announced plans to build a processing plant in Nebraska that could potentially eat into the supply provided by the Pilgrim’s Pride facility in Alabama.
Lyons told Reuters that the Nebraska facility, due to open in 2019, was ideal due to the proximity of highly productive corn and soybean growers. Reuters reported that when fully operational, the plant will produce 1.6 million chickens per week, or about one third of its fresh chicken needs.
According to the report by Reuters, Costco is building the Nebraska plant to secure a source of smaller, middle-sized birds that provide the right level of tenderness and other qualities for its rotisserie chickens and other products. Current market trends see most chicken producers focused on raising increasingly larger birds.
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