Cal-Maine Foods reports strong egg sales
US egg producer, Cal-Maine Foods,has reported that its net sales for the second quarter of fiscal 2013 were $328.9 million compared with net sales of $290.4 million for the same quarter of fiscal 2012.
“We are pleased with the continued growth in sales for the second quarter of fiscal 2013; however, our operating results also reflect challenging market conditions and increased input costs,” stated Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods. “The higher sales reflect a 9.1% growth in dozens sold and a 4.0% increase in average selling prices compared with the second quarter of fiscal 2012.
“Our specialty egg sales accounted for 16.4% of dozens sold and 22.9% of total shell egg sales revenue for the quarter. Specialty eggs are an important area of focus for Cal-Maine Food’s growth strategy as they continue to gain popularity with consumers looking for healthy choices, and have higher and less cyclical retail selling prices. Specialty egg prices were up 4.8% in the second quarter of fiscal 2013 compared with the same period last year.
“Our profitability for the second quarter of fiscal 2013 was adversely affected by higher costs for corn and soybean meal, our primary feed ingredients, and additional expenses related to recent acquisitions. The severe drought over the summer months pushed corn prices to record high levels at the end of the summer. While these costs have come off their peak levels, our feed costs per dozen were 23.4% higher in the second quarter than the same period a year ago. We expect our feed costs to remain high and volatile for the remainder of fiscal 2013. In addition, according to the most recent USDA report, the number of laying hens on December 1, 2012, was 2.5% higher compared with a year ago, affecting the current market supply of eggs. However, the hatch for egg- type chicks has declined over the past two consecutive years and was down 2.9% for the first 11 months of calendar 2012 compared with the same period in calendar 2011. While we note these market dynamics for Cal-Maine Foods and our industry, we remain focused on executing our strategy to be an efficient low-cost producer.
“We continued to expand our operations in fiscal 2013 as we completed another acquisition during the second quarter,” added Baker. “As previously announced, we acquired the commercial egg production and related assets of Texas-based Maxim Production Co., Inc., including a feed mill and two production complexes with capacity for approximately 3.5 million laying hens with related pullet capacity. In addition, we added related contract capacity for approximately 500,000 laying hens. This transaction, along with our previous acquisition of the Pilgrim’s Pride egg production assets, further advances our strategy to grow our business through selective acquisitions. Our management team is focused on making the right investments to ensure a successful integration of these additional facilities. We are pleased with our progress to date and look forward to the new opportunities ahead for Cal-Maine Foods.”
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