Few U.S. egg producers have wanted to sell their business over the last several years, but the CEO of the nation’s largest egg company said that situation could change soon.
Participating in the Stephens 2016 Spring Investment Conference on June 7, Dolph Baker, CEO of Cal-Maine Foods, explained to investors how the company has become the leading U.S. egg producer, largely through acquisitions. Baker said Cal-Maine Foods continues to eye acquisitions, even amid all of the current changes going on in the egg industry.
With more than 130 grocery chains, restaurant chains, foodservice providers and food processing companies in 2016 making commitments to transition to selling or using only eggs from cage-free sources, U.S. egg producers are being put in a position to modify their facilities to accommodate the growing demand for cage-free eggs.
Baker noted that Cal-Maine has invested $160 million in capital outlay projects. Those include projects in Kansas, Kentucky, Texas, Arkansas, Georgia and Florida that will increase the company’s cage-free and organic capacity; projects in Texas, Florida and Georgia that will will help its non-specialty egg capacity, and a project in Utah which will increase its ability to be compliant with California’s Proposition 2 compliance.
However, when asked if modifying existing facilities would where the company’s largest capital allocations would be made, Baker said no.
“Actually, I’d say that acquisitions would be a top priority, when they are available,” he said. “There’s some indications that they will be.”