1. Who are Cal-Maine’s major customers and how much of the Company’s annual revenue does each represent?
   Cal-Maine’s customer base is made up of 82 percent retail customers, which includes supermarkets, supercenters, and box stores; 12 percent food services distributors; and 6 percent egg products.

2. Why have the Company’s revenue and earnings fluctuated so much over the years?
   Our revenue and earnings are directly tied to egg prices, which are highly volatile and subject to wide fluctuations. The shell egg industry has traditionally been subject to periods of high profitability followed by periods of significant loss. In the past, during periods of high profitability, shell egg producers have tended to increase the number of layers in production with a resulting increase in the supply of shell eggs, which generally has caused a drop in shell egg prices until supply and demand return to balance.  As a result, our financial results from year to year may vary significantly.   Shorter term, retail sales of shell eggs historically have been greatest during the fall and winter months and lowest during the summer months.  Prices for shell eggs fluctuate in response to seasonal factors and a natural increase in shell egg production during the spring and early summer.  Shell egg prices tend to increase with the start of the school year and are highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter.  Consequently, we generally experience lower sales and net income in our first and fourth fiscal quarters ending in August and May, respectively. As a result of these seasonal and quarterly fluctuations, comparisons of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful comparisons.

3. Why do egg prices fluctuate so much and by region?
   Recent demand for eggs has been affected by several factors, including (a) industry advertising campaigns successfully promoting the health benefits of eggs; (b) positive announcements from the medical community highlighting eggs as a good source of protein; (c) increased consumption resulting from the factors noted above as well as the reduced level of cholesterol in eggs; (d) increased demand from the food service channel.  Factors that currently affect the supply of eggs include (a) new industry standards that will increase living space for newly hatched layers 20% by 2008 according to guidelines put in place by the United Egg Producers, in conjunction with the Food Marketing Institute, and (b) more complex permitting and zoning processes, which increase the time it takes to bring new production capacity to market.
   Regional disparities in egg prices largely reflect the amount and location of production available in a given region.  Southeast markets, for example, have significantly more egg production than markets in the West, where higher transportation costs add to retail prices.
   Over 90% of all shell eggs sold in the United States in the retail and foodservice channels are sold at prices related to the Urner Barry wholesale quotation for shell eggs. The Urner Barry Company, located in Toms River, New Jersey, provides a daily egg market quote, which has long been the basis used by most buyers and sellers within the egg industry.

10. Does management own any significant amounts of Cal-Maine stock?
   At the end of fiscal 2004, Fred Adams, chairman of the board and chief executive officer, and his spouse owned 37.6% of the outstanding shares of our Common Stock, which shares have one vote per share. Mr. Adams owns 90.4%, and his son-in-law, Adolphus B. Baker, president, chief operating officer, and a director of Cal-Maine, owns 9.6% of the outstanding shares of Class A Common Stock, which stock has 10 votes per share.  Mr. Baker and his spouse also own 2.0% of the outstanding shares of the Company’s Common Stock.  As a result, currently Mr. Adams and his spouse possess 65.3%, and Messrs. Adams and Baker and their spouses possess 71.3% of the total voting power represented by the outstanding shares of Common Stock and Class A Common Stock.  These stockholdings include shares of Common Stock accumulated under the Company’s Employee Stock Ownership Plan for the respective accounts of Messrs. Adams and Baker.

11. Does Mr. Adams plan to reduce his ownership position and, if so, when and by how much?
   It is the Adams’ family’s intention to retain ownership of a sufficient amount of Common Stock and Class A Common Stock to assure continued ownership of over 50% of the combined voting power of the outstanding shares of capital stock of the Company.