Pilgrim’s Pride is the second-largest chicken producer in the world, annually processing almost 10 billion pounds of chicken. Pilgrim’s Pride owns the hens that lay the eggs hatched in their hatcheries. When the eggs hatch, the hatchlings are trucked to independently owned farms, called grow-out farms. Growout farmers undertake the complex task of growing and feeding the hatchlings.

Their contracts with Pilgrim’s Pride are straightforward: The farmers will care for the hatchlings, using food supplied by Pilgrim’s Pride, for about five weeks.

After five weeks, the grow-out farmers return the chickens to Pilgrim’s Pride, which pays them based on the birds’ weight. Pilgrim’s Pride then processes the chickens and distributes them to grocers and other customers. As a manager of Pilgrim’s Pride, should you complete the vertical integration by purchasing the grow-out farmers?