Walmart and Costco become farmers

In mid-2018, Walmart, the Arkansas retailing giant, began bottling milk in a newly-built facility near Fort Wayne, Indiana, for its 500 stores in Michigan, Illinois, Ohio, Kentucky and Indiana. In doing so, this newcomer shoved an industry veteran, Dean Foods, its former bottler, out the door and with Dean went 100 or so dairy farmers in surrounding states who sold milk to it. Walmart replaced all with just 30 farmers and cooperatives within 140 miles of its new plant.At the same time, 650 miles west, Costco, “a membership-only warehouse” club second only to Walmart in global retail sales, began to assemble a feathery empire near Fremont, Nebraska, that will grow, slaughter, and distribute 2 million whole chickens a week to be sold as “cooked rotisserie chicken” in all Costco stores west of the Mississippi River.To pull this off, Costco has recruited an estimated 100 to 125 Nebraska and Iowa farmers to, on average, build four specialized poultry barns to grow 200,000 birds every seven or so weeks. Each of the fully integrated enterprises hopes to eliminate all the usual middlemen — anyone who sells inputs to food processors or packagers, as well as distributors and wholesalers — between the originating farmer and the final customer.