Costco, Walmart want ag control By Alan Guebert - March 21, 2019 2 9050 Share on Facebook Tweet on Twitter While officials in Washington stare at a federal budget proposal headed nowhere and a federal budget deficit headed to the moon, farm leaders in rural America are closely watching two recent moves into Big Ag by Big Retail. 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. 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. For Costco contract growers, their $800,000 to $1 million investment per setup is a way to both boost cash flow during the latest commodity low-price cycle and bring a younger generation into their farming operations. Groundbreaking venture While neither venture looks particularly risky for either the retailers or the producers — all are under contract at what outsiders say presently are profitable prices — they are groundbreaking in other ways. First, 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. Costco, for example, has effectively eliminated suppliers like Tyson Foods and Pilgrim’s Pride (and their opaque pricing structures) by building a captive supply chain right down to its own feed plant, slaughtering plant and transportation system. Similarly, Walmart has Walmart-contracted truckers hauling Walmart-contracted milk to a Walmart bottling plant that Walmart will then process and haul to Walmart stores on Walmart trucks to sell directly to Walmart customers. That’s an airtight form of vertical integration rarely seen in U.S. agriculture and never seen on that scale. Current livestock integrators do own feed mills, slaughtering plants and transportation systems. Few, however, retail their products directly to customers. By closing that loop and managing every link of the production-to-plate supply chain, Costco and Walmart now h ...

1. Costco, Walmart want ag control
By Alan Guebert -
March 21, 2019
2
9050
Share on Facebook
Tweet on Twitter
While officials in Washington stare at a federal budget proposal
headed nowhere
and a federal budget deficit headed to the moon, farm leaders in
rural America
are closely watching two recent moves into Big Ag by Big
Retail.
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

2. bottler, out the door. 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.
For Costco contract growers, their $800,000 to $1 million
investment per setup
is a way to both boost cash flow during the latest commodity
low-price cycle

3. and bring a younger generation into their farming operations.
Groundbreaking venture
While neither venture looks particularly risky for either the
retailers or the
producers — all are under contract at what outsiders say
presently are
profitable prices — they are groundbreaking in other ways.
First, 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.
Costco, for example, has effectively eliminated suppliers like
Tyson Foods and
Pilgrim’s Pride (and their opaque pricing structures) by building
a captive supply
chain right down to its own feed plant, slaughtering plant and
transportation
system.
Similarly, Walmart has Walmart-contracted truckers hauling
Walmart-contracted

4. milk to a Walmart bottling plant that Walmart will then process
and haul to
Walmart stores on Walmart trucks to sell directly to Walmart
customers.
That’s an airtight form of vertical integration rarely seen in
U.S. agriculture and
never seen on that scale.
Current livestock integrators do own feed mills, slaughtering
plants and
transportation systems.
Few, however, retail their products directly to customers.
By closing that loop and managing every link of the production-
to-plate supply
chain, Costco and Walmart now have direct control of their
products’
production, quality, price and profit.
And somewhere along the way, they became farmers, because
without their
massive market clout and integrative downstream muscle,
thousands of cows
wouldn’t be milked in Michigan and Indiana, and few chickens
would ever be
found scratching around Fremont, Nebraska.

5. Integration
Will Walmart and Costco effectively and profitably integrate
their food supply
chains from the farm to the shopping cart?
It’s an open question, but both are starting with products that
require minimum
handling and little processing to become table-ready “food.”
Also, milk and chicken are traditional retail “loss leaders” —
low-margin,
everyday items stores sell cheaply to entice shoppers into their
stores to likely
buy higher margin items.
If it does work — and profit-pinched farmers and ranchers, with
open eyes and
access to ample credit, become contract producers — consumers
and farmers
alike can expect to see more of it, says John Hansen, president
of the Nebraska
Farmers Union.
“The reason is simple,” he says. “The integrators control
quality, production,
costs, distribution and profit. It’s the natural extension of the

6. corporate state.”
Farmers on the other hand, warns Hansen, need to be more wary
of this route
than they currently are today.
“I have said that farmers who sign these contracts are
volunteering to get run
over by a bus because total integration means the total
elimination of markets.
The integrators become the only market.”
And when you have only one market, there is, in fact, no
market.
C e n t r a l S t a t e U n i v e r s i t y – D e p a r t m e n t o f
W a t e r R e s o u r c e s M a n a g e m e n t
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Introduction to Water Resources Management (WRM 2200)
Term Paper Topics & Contents (12 points for the Paper + 3
points for the Presentation)
Topics are provided and each student should be approved on
their selected topic, by the Instructor

7. 1. Any Other Topic relevant to WRM and student’s major
discipline: The student is encouraged to come
up with a topic but MUST GET approval from the Instructor
before embarking on it. Good Source
for finding topics: The “News & Views” Folder on Schoology
2. Please do not take a topic that another one already has
chosen.
3. Choose one topic and notify the Instructor on or before the
set deadline for the topic.
4. LAST DAY for the Report Submission: Check your set
deadline for submission
(No late submission; any report that will be provided after this
deadline will get no point UNLESS there
is a valid reason with a document supports it)
5. If any report contains the verbatim text of a reference source,
points will be reduced.
6. If any report contains verbatim text from another report (from
the same class), both reports will lose
points.
7. Contact the Instructor during office hours for any help s/he
could provide.
REPORT WRITING (12 Points)
1. Minimum 3000 Words (This does not include a reference
page, cover page, Figures, and Tables).

8. 2. All texts, except the Abstract in Single Spacing Times New
Roman-12 Fonts with a page margin
1” X 1”
3. A cover page with
a. the title of the paper,
b. student’s name,
c. Course name & the Course Number,
d. Course given semester.
4. Tentative Contents and Order of the Report:
a. One paragraph Abstract (maximum 150 words in Single
Spacing Times Roman-10 fonts);
b. Introduction - Introduce any relevant background knowledge,
for example, give
definitions on terms and discuss the history of the topi c;
c. Issues - Explain why this topic is important, list the
significance, concerns, impacts and
challenges of the topic;
d. Data - Use relevant data to provide any detail explanations
for the issues brought up to
explain how sever or significant the issue is;
e. Analysis/Discussion - Provide discussions or analysis on
topic, solving the issues and
mitigate the impacts/consequence;

9. f. Conclusion - Highlight the important findings you draw
through the topic investigation;
g. Reference(s).
5. Reference in text: references should be linked by numbers or
name(s) of the authors in the text
a. Placement: references are cited in the text by the author's
surname, the publication date
of the work, and a page number if necessary. Full details are
given in the reference list.
Place them at the appropriate point in the text. If they appear
within parenthetical
material, put the year with commas.
b. With a quotation: This is the text, and Smith (2012) says
"quoted text" (p.1), which
supports my argument.
c. Author: one author: Smith (2012) or (Smith, 2012)
C e n t r a l S t a t e U n i v e r s i t y – D e p a r t m e n t o f
W a t e r R e s o u r c e s M a n a g e m e n t
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Two authors: Smith and Jones (2012) or (Smith &
Jones, 2012)

10. Three to five authors: At
first mention: Smith, Jones, Khan, Patel, and
Chen (2012) or (Smith, Jones, Khan, Patel, & Chen, 2012). At
subsequent
mention: Smith et al. (2012) or (Smith et al., 2012)
Six or more authors: Smith
et al. (2012); (Smith et al., 2012)
No author: Cite first few words of title (in
quotation marks or italics
depending on journal style
for that type of work), plus the year: (“Study
Finds,” 2007)
6. Reference list
A list of reference should be provided at the end of the report.
The standard style for
reference list is given as below:
a. Journal article
Travis, E. R.; Hannink, N. K.; van der Gast, C. J.; Thompson, I.
P.; Rosser, S. J.;
Bruce, N. C. Impact of transgenic tobacco on trinitrotoluene
(TNT) contaminated
soil community. Environ. Sci. Technol. 2007, 41 (16), 5854
5861;
DOI10.1021/es070507a.

11. b. Book with author
Criss, R. E. Principles of Stable Isotope Distribution; Oxford
University Press:
Oxford, U.K., 1999.
c. Book with editors
Coghill, A. M., Garson, L. R., Eds. The ACS Style Guide, 3rd,
ed.; Oxford
University Press: New York, 2006.
d. Chapter in edited book
Snape, I.; et al. Contamination, regulation, and remediation: an
introduction to
bioremediation of petroleum hydrocarbons in cold regions. In
Bioremediation of
Petroleum Hydrocarbons in Cold Regions; Filler, D. M., Snape,
I., Barnes, D. L.,
Eds.; Cambridge University Press: New York 2008; pp 1 37.
e. Thesis
Masson, J.-F. Surface plasmon resonance sensors for
biochemical and chemical
monitoring. Ph.D. Dissertation, Arizona State University,
Tempe, AZ, 2005.
Institutional report (e.g., U.S. or international government;
private institution)

12. Biofuels: DOE lacks a strategic approach to coordinate
increasing production
with infrastructure development and special needs; Highlights
of GAO-07-713;
United States Government Accountability Office: Washington,
DC, 2007;
www.gao.gov/new.items/d07713.pdf.
f. Law
Energy independence and security act of 2007. Public Law 110-
140, 2007;
http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname
110_cong_public_la
w&docid f:publ140.110.pdf.
g. Legal decision
State of New Jersey v. EPA, No. 05-1097 (D.C. Cir. Feb 8,
2008). Website
homepage Environmental Science & Technology Website;
http://pubs.acs.org/journals/esthag/index.html.
http://pubs.acs.org/journals/esthag/index.html

13. C e n t r a l S t a t e U n i v e r s i t y – D e p a r t m e n t o f
W a t e r R e s o u r c e s M a n a g e m e n t
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7. Plagiarism
a. If any report contains verbatim text of a reference source,
both report and
presentation score zero.
b. If any reports contain verbatim text from another student
report (from the same class
or previous classes), the reports in this class will score zero.
8. Submission: As per the syllabus and instructed, due-date and
time. (No late submission;
any written report turned in after deadline will score zero,
UNLESS there is a valid reason with
an official document support).
9. Contact the Instructor during the office hours for any help.
PRESENTATION (3 Points)

14. 1. The Presentation should be submitted as PowerPoint with the
Term Paper.
2. 5-min PowerPoint Presentation on your project (3 Points).
Eight (8) to Ten (10) slides, excluding the title and end-contact-
information slides; and representing
the information as required in the above #4 item of Report
Writing.
**