Dive Brief:
- Egg manufacturer Cal-Maine Foods — the largest egg producer in the U.S. — saw record quarterly sales of $801.7 million in the last quarter, a 110% increase over the same period in the previous year, the company said its most recent earnings report. The net average selling price for a dozen Cal-Maine eggs increased to $2.88 in the quarter.
- The company attributed the earnings to the ongoing HPAI (bird flu) outbreak, and continued demand for eggs among consumers, driving prices up as availability was limited. Despite its record earnings, Cal-Maine saw a drop in its share prices after its earnings missed Wall Street estimates, according to Seeking Alpha.
- Consumers’ willingness to continue purchasing eggs will continue to be tested in 2023, though there are signs that prices could recede, or at least have peaked, as the new year takes hold.
Dive Insight:
The impact of the ongoing bird flu outbreak — which has led to the culling of 57 million flocks in the U.S., according to the CDC — is causing egg supplies to tighten and prices to reach new heights. This has helped the country’s largest egg producer, Cal-Maine, to soar with record sales but also sliding earnings for its second quarter.
In a press release accompanying its earnings, Cal-Maine said that the net average selling price for eggs has increased by 24.9% compared to the same quarter in the previous year, and that it is meeting demand for the protein.
Egg prices increased 49.1% year-over-year in the Bureau of Labor Statistics’ Consumer Price Index for November. And some scientists fear the current bird flu outbreak is here to stay for the foreseeable future as it is mutating faster than previous iterations, Vox reported in December.
But the USDA’s most recent egg market report indicated that egg prices “have begun to recede into the new year” and supply is beginning to improve, which indicates that prices may have already peaked. Cal-Maine was more wary in its report about the prospect for the supply of eggs returning to normal levels. The company cited LEAP Market Analytics prediction that hen inventories will not return to normal levels until December 2023.
“Consumer demand for shell eggs continued to be good in the quarter, especially leading up to the Thanksgiving holiday, and we experienced record quarterly volume levels for specialty eggs sold,” Cal-Maine CEO Sherman Miller said.
In a report last September, agricultural research group CoBank predicted egg prices would remain elevated for the foreseeable future, as the commodity’s prices already had tripled since the start of 2022. The 2022-2023 bird flu outbreak is impacting the egg market more significantly than the 2014-2015 disease, according to CoBank. Cal-Maine said in its report that it had seen no positive tests for bird flu among the chickens at its facilities as of Dec. 28.
The continued high egg prices is leading producers to look for new ways to cut costs. Israeli-American biotech company Huminn said in December that its gene-editing technology led successfully to a hen laying only female chicks. Adoption of tech technology from egg producers could end the culling of male chicks in the egg production process, which could save the industry billions, the company said.
