Cal-Maine Earnings Decline as Feed Costs Rise

Cal-Maine Foods earnings fell more than 20% despite increased sales in fresh shell eggs as production costs climbed. Cal-Maine CALM, the largest producer and distributor of fresh shell eggs in the U.S., earned $26.1 million, $1.09 per share, on the sale of 229.2 million dozen-egg packages in the third quarter of 2012. Last year in the same time it earned $33.6 million, $1.40 per share, and sold 215.2 million dozen-egg packages. Feed costs a large factor in decreasing earnings, as they rose about 10% to 44.9 cents per dozen eggs. Sale prices rose 3.3% for all types of eggs. Specialty eggs - nutritionally enhanced, cage-free and organic egg – saw prices rise 9%. Specialty eggs accounted for 16.8% of sales, down from 17.5% a year ago. Third quarter 2011 results also included a $4.8 million one-time cash distribution for the sale of the company's non-voting stake in Eggland's Best. “We expect feed costs will remain very high and volatile throughout the summer of calendar 2012 due to tight supplies of corn and soybeans, our primary feed ingredients,” said Dolph Baker, president and chief executive officer of Cal-Maine Foods. Sales climbed 10.6% to $303.7 million, with specialty eggs accounting for 24% of revenue. Gross margin fell to 21.5% from 23.9%, reflecting the rise in feed costs.