Cal-Maine Foods reported a significant rise in net income during the third quarter of fiscal year 2016, attaining a net income of $64.2 million, up from the $50.9 million recorded in the same period one year ago.
For the fiscal year to date, the largest egg company in the United States reached a net income of $316.4 million, nearly tripling the net income of $115.1 million from the first three quarters of fiscal year 2015.
Net sales for the third quarter were $449.8 million, a 2.8 percent increase from Cal-Maine Foods’ net sales in the third quarter of 2015. For the first nine months of fiscal year 2016, Cal-Maine achieved net sales of $1.6 billion, compared to net sales of $1.17 billion during the same period of fiscal year 2015.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, said the net sales increases primarily reflect higher average selling prices compared with the same periods during fiscal year 2016.
“While average selling prices for shell eggs for the third quarter of fiscal 2016 have dropped considerably from the historically high record levels we experienced earlier in the fiscal year, they were still up 4.3 percent over the third quarter of fiscal 2015. For the fiscal year-to-date period, average selling prices were up 35.6 percent over the same period a year ago. Our sales volumes have continued to trend higher each quarter of fiscal 2016; however, they were down 1.9 percent in the third quarter compared with the prior-year period,” Baker said in a press release.
“Specialty eggs have been a key driver of our growth throughout this fiscal year, with volumes up 13.7 percent for the third quarter compared with the prior-year period,” added Baker. “Specialty egg sales accounted for 23.6 percent of the dozens of shell eggs sold and 31.0 percent of total shell egg sales revenue for the third quarter of fiscal 2016, compared with 20.3 percent of the dozens of shell eggs sold and 26.9 percent of total shell egg sales revenue for the third quarter of fiscal 2015. We continue to pursue additional opportunities to market and sell specialty eggs, especially in light of changing demand trends.”
Feed costs were estimated to be about 5 percent lower, according to Baker, further helping the company improve its financial position.
Meeting the cage-free, organic egg demand
As the food service industry, restaurant chains and major retailers are increasingly demanding more cage-free eggs in response to market forces, Baker said Cal-Maine Foods is working with its customers to facilitate a smooth transition to meet this demand.
“We believe Cal-Maine Foods is well positioned to respond to dynamic market conditions and future demand trends. In addition to cage-free eggs, we provide our customers with a full selection of conventional, nutritionally enhanced and organic eggs, and we will continue to enhance our product mix to meet the needs of our customers,” said Baker.
“We have a number of major capital projects underway across our operations to further expand our cage-free capacity to meet expected customer demand and reduce our dependence on spot market purchases. We look forward to the new market opportunities these projects will provide for Cal-Maine Foods.”
Avian influenza biosecurity a high priority
Baker reported that the company continues to diligently monitor the situation relating to avian influenza in the United States. No positive findings of avian influenza have been reported in Cal-Maine flocks, and the company continues to operate with strengthened biosecurity at all of its facilities.
Cal-Maine’s joint venture with Rose Acre Farms
Progress continues with the construction of Red River Valley Egg Farm LLC, a joint venture between Cal-Maine Foods and Rose Acre Farms, located near Bogata, Texas. When fully operational, the farm will have about 1.8 million birds.
“As planned, our initial flock was placed in early November, and we are on schedule for continued placements until we reach our full expected capacity in early calendar 2017,” Baker stated.
