Dive Brief:
- Cal-Maine Foods’ profits skyrocketed in the first quarter driven by higher egg prices as supplies tighten from bird flu impacts.
- The Mississippi-based egg company reported net income of $150 million in the three months that ended Aug. 31, up from $926,000 last year. Stronger sales and lower feed costs contributed to higher margins as the industry looks to rebuild its hen flocks and egg inventories following bird flu infections at farms and operations.
- Cal-Maine is still evaluating the impact of Hurricane Helene on its animals, facilities and workers in the Southeast, CEO Sherman Miller told investors, but the company believes all of its employees and contractors are safe and any operational losses are minimal.
Dive Insight:
Cal-Maine sales surged in the first quarter to $786 million, nearly double what the company generated last year, as customers purchased more cartons of eggs despite higher prices.
CFO Max Bowman noted a 10% year-over-year increase in conventional shell eggs sold during the period and a 20% increase in specialty eggs, such as organic or cage-free products.
Higher sales and lower farm production costs bolstered Cal-Maine’s profits in the first quarter. Feed costs per dozen were down 17% from a year ago, Bowman said in a statement, but egg purchases were significantly higher as the company sought to make up for production losses from bird flu outbreaks earlier this year.
Cal-Maine had outbreaks at company facilities in Texas and Kansas this year, resulting in the deaths of 3 million laying hens and 577,000 pullets. The company began its repopulation efforts in the first quarter and expects to complete its plans by the end of December.
Looking ahead, Miller said Cal-Maine has a strong balance sheet as it looks to continue investing in growth opportunities. Earlier this month, the company announced a joint venture with wrap and crepe maker Crepini, accelerating its growth in the ready-to-eat and prepared foods categories.
Cal-Maine is also assessing any potential damage from Hurricane Helene in the Southeast.
“As always, our top priority is the safety of our employees and the welfare of the birds under our care,” Miller said in a statement. “We continue to do all we can to serve our valued customers and expect any service disruption to be minimal.”