To close out 2021, Cal-Maine Foods Inc. reported its 13-week long second quarter results of the fiscal 2022 year and 26-week period results that ended on November 27, 2021.
The company’s net sales in the second quarter increased to $390.9 million (12.5%) compared to $347.3 million in the same quarter last year, while its net income of $1.2 million in the second quarter of fiscal 2022 is $11 million dollars less than the second quarter of fiscal 2021 ($12.2 million).
In the 26-week period that ended in November 2021, net sales increased to $722.6 million compared to $640.1 million in the previous-year’s period, resulting in a net loss of $16.9 million compared to a net loss of $7.2 million in the prior-year period.
“We were pleased to report higher sales for the second quarter of fiscal 2022 compared with the prior year, driven by improved shell egg pricing. For the second quarter of fiscal 2022, the net average selling price for all eggs increased 11.9% to $1.373 per dozen compared with $1.227 per dozen in the prior-year period,” stated Dolph Baker, chairman and chief executive officer of Cal-Maine Foods.
“Our sales volumes also improved compared to the previous record sales volumes in the second quarter of fiscal 2021. We are pleased that our operating results helped drive a return to modest profitability in the second quarter despite the impacts of higher costs for feed ingredients, processing, packaging, transportation and labor.”
Feed costs
Feed costs were predicted be heightened in 2021 by many due to the increased demand for corn and soybeans, the effects of COVID-19 and China’s recovery from African swine fever. Additionally, the January 12 USDA WASDE report released at the beginning of 2021 estimated that the corn price in the U.S. farm market would be $0.64 per bushel higher in the 2021 crop year compared to the 2020 crop year, as well as soybean meal price increasing to $90.50 per ton higher than in the previous year.
“For second quarter fiscal year 2022, we reported an operating loss of $2.1 million compared with operating income of $14.5 million for the prior-year period. Our results reflect the current inflationary environment with higher costs for feed, labor, packaging and delivery,” said Baker.
“Farm production costs per dozen for the second quarter of fiscal 2022 were up 21.6% compared to the second quarter of fiscal 2021, an increase primarily tied to higher feed costs per dozen produced, which were up 29.0% compared with the prior-year period.”
2021 expansions
In the last year, Cal-Maine Foods worked to expand their cage-free and specialty egg portfolio across the United States, increasing their ability to profit in the near future.
On October 4, the company announced construction plans for MeadowCreek Foods LLC, an $18.5 million investment that will target and create high value commercial product solutions. The company will specialize in hard-cooked and extended shelf-life egg products and be located in Neosho, Missouri. Cal-Maine will be the preferred supplier for the new manufacturer, providing conventional and specialty eggs.
On October 25, the company announced a new $23 million project located in Okeechobee, Florida to grow its cage-free egg production capacity. The expansion includes construction of two cage-free layer houses and one cage-free pullet house. This will allow Cal-Maine to expand its capacity by approximately 400,000 cage-free hens and 210,000 pullets.
On December 5, Cal-Maine made an investment in Southwest Specialty Eggs, LLC to obtain additional warehouse and distribution abilities due to implementation of Proposition 12 quickly approaching. This will expand Southwest Specialty Egg’s customer base in the southern California, Arizona and Nevada areas.
