Strong egg demand and reduced supply due to avian influenza pushed Cal-Maine quarterly results significantly higher.
January 10, 2025
By Kristin Bakker
Cal-Maine Foods Inc., the largest producer and distributor of fresh shell eggs in the U.S., reported remarkable financial results for its fiscal 2025 second quarter ended Nov. 30, 2024, citing strong consumer demand for eggs and a boost from recent acquisitions.
“Cal-Maine Foods delivered a very strong financial and operating performance in the second quarter of fiscal 2025,” Sherman Miller, Cal-Maine president and chief executive officer, stated in the earnings release. “Robust demand for shell eggs resulted in a significant increase in dozens sold for the quarter, which included the seasonal boost leading up to the Thanksgiving holiday and sales from our latest acquisition completed in June.
“Our results also reflect higher market prices, which have continued to rise this fiscal year as supply levels of shell eggs have been restricted due to recent outbreaks of highly pathogenic avian influenza (HPAI). Our team did an outstanding job in managing our production as well as making outside purchases in order to meet the needs of our valued customers. We were fortunate to have the ability to leverage our significant scale and benefit from recent acquisitions, which have helped support our production capacity in this challenging supply environment,” Miller added.
Last year was a busy one for Cal-Maine in terms of acquisitions. In March 2024, the company acquired the Tyson Foods facilities in Dexter, Miss., and began work to remodel and convert them for use in free-range shell egg production.
In June 2024 Cal-Maine announced the purchase of substantially all the assets of ISE America Inc. and certain affiliates. The acquired ISE assets included commercial shell egg production and processing facilities with capacity of roughly 4.7 million laying hens, about 1.0 million of which are cage free, 1.2 million pullets, feed mills, 4,000 acres of land, inventories and an egg products breaking facility, as well as an extensive customer distribution network across the Northeast and mid-Atlantic states and production operations in Maryland, New Jersey, Delaware and South Carolina.
In September, Cal-Maine completed a strategic investment with Crepini LLC to establish a new egg products and prepared foods joint venture offering egg wraps, protein pancakes, crepes and wrap-ups to enhance its product portfolio and focus on value-added offerings.
“As demand continues to outpace supply, we remain focused on making additional strategic investments to expand our operations,” Miller said. “We currently have approximately $60 million in new capital projects directed to the expansion of our cage-free capacity, including the $40 million in projects that we announced in October. The projects include the addition of five new cage-free layer houses and two pullet houses across the company’s locations in Florida, Georgia, Utah and Texas. Upon completion, we expect the projects to provide additional production capacity for approximately 1.1 million cage-free layer hens and 250,000 pullets by late summer 2025. We are also investing $15 million to expand our egg products processing facility in Blackshear, Ga., to add extended shelf-life liquid egg products. We expect our processing plant and hatchery in Dexter, Mo., that we acquired and repurposed for use in shell egg production, will be online in our next fiscal quarter. We have been working with local contract growers and have commitments for approximately 1.2 million additional free-range hens by fall 2025.”
Miller added that moving forward, Cal-Maine will continue to focus on acquisitions and expanding egg product offerings that align with its strategic objectives and make sense as far as geographic relevance, operating synergies, product portfolio expansion, proximity to customers and potential financial returns. “Importantly, we have a strong balance sheet and the financial flexibility to make the right investments to support our growth strategy,” he said.
Cal-Maine reported net sales of $954.7 million for the fiscal 2025 second quarter ended Nov. 30, 2024, versus $523.2 million for the second quarter of fiscal 2024.
“The higher sales were primarily driven by an increase in the net average selling price of shell eggs as well as an increase in total dozens sold,” Max Bowman, vice president and chief financial officer of Cal-Maine, explained.
The company reported sales of 329.8 million doz. shell eggs and 209.6 million doz. conventional eggs for the 2025 second quarter, compared to 288.2 million doz. shell eggs and 192.5 million conventional eggs for the prior-year second quarter (Table). Sales of conventional eggs were up 8.9% from the prior-year period. In addition, specialty egg sales increased more than 25% in volume in the quarter to 120.2 million doz., compared with 95.7 million doz. in the prior-year period.
Second-quarter net income attributable to Cal-Maine was $219.1 million, or $4.47 per diluted share, compared with $17.0 million, or 35 centers per diluted share, for the fiscal 2024 second quarter.
“Overall, our second-quarter farm production costs per dozen were 8.5% lower compared to the prior-year period, primarily due to more favorable commodity pricing for key feed ingredients,” Bowman said. “For the second quarter of fiscal 2025, feed costs per dozen were down 12.8% compared with the second quarter of fiscal 2024. Our costs for outside egg purchases increased significantly quarter over quarter, primarily due to higher shell egg prices and the increased dozens of shell eggs we purchased for customers during the higher seasonal demand cycle while the nation experienced lower supply due to HPAI.
“Current indications for corn and soybean supply project a favorable stocks-to-use ratio similar to today’s prevailing levels for the remainder of fiscal 2025. However, as we continue to face uncertain external forces, including weather patterns and global supply chain disruptions, price volatility could remain,” Bowman added.
Outbreaks of HPAI have continued to occur in U.S. poultry flocks. In calendar 2024, 38.4 million commercial layer hens and 1.8 million pullets were depopulated due to HPAI. Approximately 13.6 million commercial layer hens and 500,000 pullets were depopulated in December 2024 alone.
Cal-Maine said its facilities in Kansas and Texas, which experienced HPAI cases in fiscal 2024 and had to depopulate their flocks, are now fully operational, and it remains dedicated to robust biosecurity programs across its locations. Still, the company cautioned that no farm is immune from experiencing an HPAI outbreak, since the virus is currently circulating widely in the wild bird populations globally and the risk is heightened during migration seasons.
“Without question, we have recently faced significant challenges within our company and the entire egg industry due to the ongoing outbreaks of HPAI,” Miller said. “While we recognize and address these risks, we are steadfast in our efforts to effectively manage our operations and promote responsible and sustainable production. We remain focused on optimizing the aspects of our business that we can control and continue to extend our leadership role in supporting the nation’s food supply.”
Looking ahead, Miller said Cal-Maine will continue to focus on growing its shell egg production capacity and product mix organically and through strategic acquisitions. “We continue to expand our egg products portfolio, which will enable us to leverage our existing distribution channels and extend our reach in foodservice and retail marketplaces. We believe Cal-Maine Foods is well positioned for continued growth with our leading production scale, fully integrated operations and broad distribution capabilities.”
Cal-Maine Foods is engaged primarily in the production, grading, packaging, marketing and distribution of fresh shell eggs, including conventional, cage-free, organic, brown, free-range, pasture-raised and nutritionally enhanced eggs. Headquartered in Ridgeland, Miss., Cal-Maine is the largest producer and distributor of fresh shell eggs in the nation and sells most of its shell eggs throughout the majority of the U.S.
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