Cal-Maine Foods, Inc. is currently working with the U.S. Department of Justice’s antitrust division in an investigation regarding egg price increases due to outbreaks of highly pathogenic avian flu (HPAI). The company disclosed that it received a civil investigative demand from the DOJ in March of the fiscal year 2025.
During the third quarter of FY25, Cal-Maine reported net sales of $1.4 billion, a significant increase from $703.1 million in the same period the previous year. Net income also saw a substantial rise to $508.5 million in the third quarter of FY25, compared to $146.7 million in the third quarter of FY24.
The company attributed the higher net sales to the increase in the net average selling price and higher volumes of shell eggs. Higher market prices were a result of reduced shell egg supply industry-wide during a period of peak seasonal demand for eggs and egg products.
In the third quarter of FY25, Cal-Maine reported a net average selling price per dozen of $4.060, compared to $2.247 a year earlier. The company mentioned that the net average selling price reflects a mix of higher market-based prices for most conventional eggs and lower negotiated-price arrangements for specialty eggs based on longstanding pricing frameworks.
Cal-Maine sold a record 331.4 million dozen shell eggs in the third quarter of FY25, a 10.2% increase from the previous year. Sales of conventional eggs rose to 213.2 million dozens, while specialty egg volumes increased by 8.8% to 118.1 million dozens.
The company stated that demand was strong during the third quarter, with factors such as historic snowstorms in the southern U.S. in January 2025 and recommendations of eggs as a good source of lean protein for individuals taking GLP-1 medications positively impacting demand.
Cal-Maine reported that farm production costs per dozen were 5.7% lower than the previous year, primarily due to more favorable commodity pricing for key feed ingredients. Feed costs per dozen decreased by 9.6%, while costs for outside egg purchases increased due to higher shell egg prices and increased dozens of shell eggs purchased to meet customer demand amid lower overall supply due to HPAI.
Max Bowman, Vice President and Chief Financial Officer of Cal-Maine, highlighted the importance of managing operational aspects that the company can directly impact in the face of industry volatility. He credited the team’s efforts in mitigating egg supply constraints and preventing the spread of HPAI to facilities for contributing significantly to the quarterly results.
Despite HPAI-related shutdowns at facilities in Kansas and Texas during the third and fourth quarters of FY24, Cal-Maine has since recovered. The company reported an increase in the average number of layer hens and total chicks hatched during the quarter, as well as a 33% rise in breeder flocks by the end of the third quarter.
Cal-Maine also announced its agreement to acquire Echo Lake Foods for approximately $258 million, excluding expected tax assets. Echo Lake Foods, based in Burlington, Wisconsin, produces ready-to-eat egg products and breakfast foods, with annual revenues of around $240 million in 2024. The transaction is expected to close by the end of fiscal 2025, pending regulatory approvals.
Sherman Miller, President and CEO of Cal-Maine Foods, expressed excitement about the growth opportunity presented by the acquisition of Echo Lake Foods. He emphasized the strategic fit between the two companies and the potential for expansion and diversification of product offerings and customer base.
The combined product lines and capabilities of Cal-Maine Foods and Echo Lake Foods are seen as highly complementary, aligning with the company’s commitment to operational excellence and customer satisfaction. The acquisition is expected to meet the company’s investment criteria and deliver financial returns.
Cal-Maine Foods continues to invest in biosecurity technology, equipment, procedures, and training, with $70 million spent on measures to address HPAI since 2015. The company remains focused on meeting customer needs and maintaining its long-standing pricing frameworks amidst dynamic market conditions and supply shortages.
