This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
- Cal-Maine Foods, the largest U.S. egg producer, said its quarterly net sales increased 82% from the previous year due to strong consumer demand and supply constraints due to the ongoing avian flu outbreak.
- Sales of both conventional and specialty eggs increased in the second quarter of fiscal 2025, according to Cal-Maine. Higher prices and lower feed costs also boosted profits, the company said.
- As the highly pathogenic avian influenza spreads, egg prices continue to break records. Commercial producers have reported more devastating outbreaks requiring herds to be culled to prevent spread.
Dive Insights:
Cal-Maine said demand continues to outpace supply and the company has had to purchase products from outside suppliers and rely more on recently acquired capacity to meet customer demand.
“There is no question that we face significant challenges within our company and the entire egg industry due to the recent and ongoing outbreak of HPAI,” Sherman Miller, Calmain’s president and CEO, said in a statement. revealed through. “It’s a business we have control over, and we continue to expand our leadership role in supporting the nation’s food supply.”
According to the U.S. Department of Agriculture, 39.9 million commercial egg layers were lost in 12 states in 2024 due to avian flu outbreaks and facility fires. About 43% of the losses occurred in the last two months of 2024, with a third occurring in the peak demand period of December.
Unlike previous years, avian flu is starting to affect cage-free and specialty eggs, leading to significant price increases in markets such as California, which has restrictions on confinement of laying hens.
Egg prices remain at record highs in markets across the United States. Prices for large white-shelled eggs ranged from $5.75 per dozen in the Midwest to $8.97 in California.
Nonetheless, supply issues have prompted consumers to continue stockpiling, further limiting inventory on grocery store shelves. The USDA reported that many grocery retailers have taken steps to reduce consumer purchases, with some limiting the number of boxes that can be purchased per shopping trip.
Cal-Maine made the acquisition last year to expand production of cage-free eggs and strengthen its position in the value-added sector. The company has invested about $60 million in new capital projects aimed at increasing its supply of cage-free eggs. We are also expanding our processing capacity for shelled and liquid eggs.
“We have been fortunate to have the ability to leverage significant scale and benefit from recent acquisitions, which have helped support our production capacity in this challenging supply environment,” Sherman said in a statement. “As demand continues to outpace supply, we are focused on making additional strategic investments to expand our business.”
