You are absolutely correct about the Kitty litter, sand, etc. The shipping costs eat into any kind of profit for the company. The company that co-packs the litter for Walmart actually has three different clay mines across the U.S. If you compare East Coast product to West Coast product they look visually different (usually the clay is the same sieve size, but is a distinctly different color).
I always thought it was kind of funny that the two largest producers of cat litter in the U.S. are Clorox and Nestle.