Cal-Maine Statement on Current Egg Prices
RIDGELAND, Miss. (January 24, 2023) - Cal-Maine Foods, Inc. (NASDAQ: CALM) today issued the following statement regarding recent allegations against the Company and the high market prices for eggs.
Many factors play a role in increased egg prices, most notably the recent impact of the highly pathogenic avian influenza (HPAI), which has significantly reduced the national hen supply, while consumer demand for shell eggs remains good. The current HPAI epidemic has surpassed the prior 2014-2015 outbreak in terms of the number of affected hens in the U.S., and HPAI continues to circulate throughout the wild bird population as well as commercial flocks in the U.S. and abroad. The USDA division of Animal and Plant Health Inspection Service (“APHIS”) reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets were depopulated due to HPAI in 2022. Layer hen numbers for table or market type eggs reported by the USDA as of January 1, 2023, were 306 million, which represents a decrease of 6% compared with the layer hen inventory a year ago.
In addition, like all other industries, egg production is being affected by increased input costs. In particular, the cost of feed, labor, fuel and packaging have risen considerably, which affects the cost of production, and therefore, wholesale and retail prices of eggs.
The domestic egg market has always been intensely competitive and highly volatile even under normal market circumstances. Cal-Maine Foods sells its eggs to a diverse group of retail customers, including national and regional grocery store chains, club stores, companies servicing independent supermarkets in the U.S., food service distributors, and egg product buyers. Cal-Maine Foods sells its eggs at prices negotiated with each customer. In many cases, the Company, and it believes its customers, look to independent, third-party market quotes published by Urner Barry, the leading provider of protein market news and information for the food industry. Urner Barry’s pricing methodologies and processes received third-party assurance that they are aligned with the International Organization of Securities Commission (IOSCO) Principles for Price Reporting Agencies. (IOSCO is the international body that brings together the world’s securities regulators and is recognized as the global standard for the securities sector.) As an example of the volatility in the market prices of shell eggs, the Urner-Barry White Large, Midwest Regional Egg Market Price (“UB MW quote”) per dozen eggs ranged from a low of $0.79 in January 2020 to a high of $5.43 in December 2022. The current UB MW quote is $3.30.
The Company does not sell eggs directly to consumers or set retail egg prices.
Even in this time of higher prices, the nutritional content of eggs remains a great value for consumers. According to the American Egg Board, a dozen large eggs represent 1.5 pounds of high-quality protein that is versatile and delicious. Cal-Maine Foods wants to assure its customers we are doing everything we can to maximize production and keep store shelves stocked. Cal-Maine Foods is proud of its mission to be the most sustainable producer and reliable supplier of fresh shell eggs and egg products in the United States.
Cal-Maine Foods Contact:
Max P. Bowman, Vice President and Chief Financial Officer