The retail giant's decision to shelve a $500 million-plus expansion signals that even well-capitalized retailers face hard constraints when scaling commodity protein production. Costco's December 2025 announcement that it would not proceed with Phase 2 of its Lincoln Premium Poultry complex near Fremont, Nebraska - citing construction costs that have doubled in eight years - offers a case study in supply chain economics. The move isn't failure: Phase 1 generates over $1 billion in annual economic activity and supplies roughly 40% of Costco's western U.S. rotisserie chicken demand. Rather, the shelving reflects rational capital allocation amid shifting input costs, adequate alternative supply, and the inherent risks of concentrating production in a single geography.
What's Inside:
LDC Acquires Majority Stake in UK Duck Producer Gressingham Foods
The deal positions France's largest poultry group to challenge Moy Park and 2 Sisters in a UK market where retail consolidation has outpaced processor scale for two decades. Gressingham's vertically integrated model, with 121 contract farms supplying half its birds, mirrors LDC's French operations and provides immediate margin protection in a sector where unintegrated processors face persistent squeeze. Duck represents just 0.5% of UK meat sales but carries premium positioning that insulates against the overcapacity plaguing conventional chicken; Gressingham's 27% branded sales growth through early 2025 demonstrates the segment's upside.
LDC's pattern of €200m+ bolt-on acquisitions across Poland, Germany, Romania, and France in the past 18 months suggests Gressingham is a platform for further UK consolidation rather than a standalone investment. The Buchanan family's decision to sell majority control following the founder's death signals that generational transition remains the primary catalyst for mid-market protein M&A in Europe. For remaining independent UK processors, the strategic options are narrowing as continental capital and JBS compete to aggregate British poultry capacity.
Form-A-Feed Acquires Sioux Nation Ag Center, Expanding Upper Midwest Feed Platform
The transaction combines Form-A-Feed's premix manufacturing capabilities with Sioux Nation's integrated service model spanning nutrition, veterinary care, and financial consulting across eight locations in South Dakota, Minnesota, and Iowa. Regional feed consolidation is accelerating as operations scale beyond generalist advice but remain too small for dedicated technical staff, creating demand for platforms that bundle products with professional services. Form-A-Feed's ESOP structure provides a tax-advantaged acquisition currency that private equity-backed competitors cannot easily replicate, positioning employee-owned feed companies as natural consolidators in succession-driven M&A.
Sioux Nation's three-generation family ownership and explicit mission to support independent producers will test whether integration preserves differentiated local relationships or standardizes them into house-brand protocols. The deal extends Form-A-Feed's footprint into South Dakota's concentrated cattle feeding territory while strengthening density in the Upper Midwest swine and dairy corridors. For livestock producers, consolidation delivers broader technical resources but concentrates purchasing decisions among fewer counterparties.
Global Protein Supply Faces First Contraction in Six Years as U.S. Beef Herd Hits 73-Year Low
The U.S. cattle inventory at 86.7 million head has triggered processor rationalization, with Tyson closing its Lexington, Nebraska facility and JBS shuttering Swift Beef's Riverside, California plant as negative margins make capacity reduction inevitable. Herd rebuilding requires three to four years of retained heifers, meaning supply constraints will persist through 2028 regardless of price signals or policy intervention. Spain's first African Swine Fever outbreak since 1994 has prompted import bans from over 40 countries on an industry representing 26% of EU pork output; investigation of potential laboratory origin at a Catalonian research facility raises biosecurity questions that extend beyond this incident.
China's new 55% tariff structure on beef imports formalizes the effective closure of U.S. market access, with quota allocations favoring Brazil and Australia through 2028. Poultry remains the relative beneficiary of cross-protein substitution, though avian influenza continues circulating with 71 human H5 cases since early 2024. The convergence of cyclical herd liquidation, disease disruption, and trade fragmentation creates a 24 to 36 month window of elevated volatility that rewards geographic diversification and vertical integration.