A spike in egg prices squeezed customers. But even as its own costs rise, America’s top egg supplier has found it can make even more money on each egg.
The egg shortage has enabled record quarterly earnings and sales at Cal-Maine Foods, the largest producer and distributor of eggs in the United States. The company produces brands such as Farmhouse Eggs, Sunups, Sunny Meadow, Egg-Land’s Best and Land O’ Lakes eggs.
Cal-Maine’s profit increased 65% to $198 million during the three months ended Nov. 26 from a year earlier.
A supply shock triggered by the deadliest outbreak of a highly pathogenic avian flu in US history sent prices higher. Avian flu has killed more than 50 million birds in the United States since the beginning of 2022, according to the Centers for Disease Control and Prevention. There have been no positive avian flu tests at any of the Cal-Maine Foods facilities.
As a result, retail egg prices have increased more than any other item at the grocery store in recent months, rising 11.1% from November to December and 59.9% year-on-year, according to the Bureau of Labor Statistics.
And as supplies remain tight and its profits rise, Cal-Maine said it expects the outbreak to continue to affect overall egg supplies this year. As of December 28, Cal-Maine posted record quarterly sales of $801.7 million, a 110% increase compared to the same quarter a year ago.
The company said it was “driven by the record average selling price of conventional eggs” to its retail customers. Walmart is its biggest customer.
Cal-Maine’s average net selling price per dozen conventional eggs in the quarter was $2.88, more than double the prior year, the company said.
The company’s selling prices for specialty eggs, which include enriched, cage-free, organic, free-range, pasture-raised and brown eggs, rose 24.9% during the quarter to $2.37 per dozen.
“Significantly higher selling prices, our enduring focus on cost control and our ability to adapt to market inflationary pressures led to an overall improvement in profitability,” Max Bowman, Cal-Maine’s chief financial officer, said in a statement.
Cal-Maine stock rose 47% last year, hitting record highs. So far this year, the company’s stock has been stable.
Source: CNN Brasil
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