Costco pays above-average $20,600 an acre for site of proposed Fremont chicken plant


By Barbara Soderlin, Omaha World-Herald (NE)

Mar 18, 2017


Costco has closed on the purchase of land near Fremont where it looks to build a chicken processing plant — paying a big premium over average farmland prices in the area — and now has more than enough farmers interested in raising the chickens, a project representative said.


Those are the latest milestones in the retailer’s journey to creating its own chicken supply chain to serve its warehouse stores, known for their $4.99 rotisserie chickens.


The project is under review by state and local permitting offices, and project officials expect to break ground this spring, with the plant operating two years later.


Still, an opponent’s group continues to protest the project, and a lawsuit over tax-increment financing for the project has a June court date. In a series of meetings this week hosted by Nebraska Communities United, a speaker warned farmers around the region to analyze their contracts and expenses carefully before signing on.


“This business basically treats farmers like an expendable resource,” Craig Watts, a North Carolina farmer who has raised chickens for Perdue, said Thursday in West Point, Nebraska.


Watts has spoken out against common chicken industry contract practices that penalize farmers for below-average production. Lincoln Premium Poultry, the company that will run Costco’s chicken operation, has said it will use a different type of contract, in which farmers have a guaranteed base pay.


Lincoln said it has plenty of interest from local farmers. About 125 farmers, who could operate about 500 barns, have signed applications to participate, project manager Walt Shafer told The World-Herald this week. That’s more than the 400 barns needed, but Lincoln is continuing to accept applications. Farmers have not yet signed contracts; that would happen after a site visit and after a farmer shows that financing and local permitting approval are in place.


Costco paid $8,550,000 for the 414 acres of land — about $20,600 an acre. The average price of farmland in east-central Nebraska is $6,330 an acre.


“For us, it was a good business transaction, and we’re happy,” said land seller Fred Culp, a Nebraska native now living in Albuquerque, New Mexico. His family-run Hills Farm owns land around Nebraska, Culp said.


The land has been in his mother’s family since 1888...