According to CNBC …
Costco is shelling out $440 million to open a Nebraska chicken farm.
Why is Costco doing it?
“To partially escape the American chicken monopoly run by the likes of Tyson, Pilgrim’s Pride and Perdue.”
Technical note to CNBC: A monopoly has only one supplier. A duopoly has two. When there are three, it’s a concentrated competitive market.
The self-operated farm provide Costco with 100 million chickens … 40 percent of its yearly chicken needs.
Doing the arithmetic, that means that Costco goes through about 250 million chickens every year.
That’s a lot of chickens but pales in comparison to KFC which reportedly goes through 3 or 4 times as many.
Personal note: Many, many years ago, I interviewed for a position at KFC as a chicken buyer. I was recruited because I had an economics degree and had worked for a large grocery store chain.
It wasn’t a good fit. (<= understatement)
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December 19, 2018 at 6:54 am |
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