Cal-Maine Foods, the leading U.S. egg producer, saw strong results in its fiscal fourth quarter, buoyed by increased production and lower prices for so-called specialty eggs.
Cal-Maine posted sales of $593 million, a 70% year-over-year increase. Net income was $146.7 million, compared with a loss of $12.2 million in the same period last year.
Company executives attributed much of the success to an expansion of the company’s business in specialty eggs such as cage-free. Specialty eggs constituted 33% of Cal-Maine’s sales revenue and 34% of its unit volume – the latter up from 27.4% last year.
Laws in California and elsewhere mandating minimal space for laying hens, as well as increasing demand by retailers and restaurant chains for cage-free eggs, have motivated Cal-Maine to speed the conversion of its laying facilities to comply. It plans to spend an estimated $55.3 million to upgrade its facility in Chase, Kansas, to cage-free production for 1.5 million hens.
Another boost for specialty eggs has been price. As Cal-Maine and other producers convert facilities and bring more specialty eggs on the market, prices have remained relatively stable; the wholesale price of a dozen specialty eggs was $2.015 in the fourth quarter, up only 7.5% from the same period last year. Conventional eggs were actually more expensive, reaching $2.098 per dozen, an 89% increase. Much of that increase is attributable to avian flu, which has plagued commercial poultry herds all year.