Cal-Maine Foods reports 38.6% decline in Q2 net earnings

US-based egg producer Cal-Maine Foods has reported that its net income for the second quarter of fiscal 2013 decreased by 38.6% to $14.3m, compared to $23.3m in the same period in the previous year, due to higher costs of feed ingredients.

Sales totalled $328.9m, up from $290.4m in the previous year, reflecting a 9.1% growth in dozens sold and a 4% increase in average selling prices compared with the second quarter of fiscal 2012.

Cal-Maine Foods chairman, president and chief executive officer Dolph Baker said that sales of speciality eggs accounted for 16.4% of dozens sold and 22.9% of total shell egg sales revenue for the quarter.

"Speciality 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," Baker said.

"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," he added.

The company noted that its feed costs per dozen increased 23.4% from the previous year, and it expects costs to remain high and volatile for the rest of fiscal 2013.

During the second quarter, the company completed its acquisition of the commercial egg production and related assets of Texas-based Maxim Production, including a feed mill and two production complexes with capacity for 3.5 million laying hens.

Meanwhile, in August 2012 it acquired the commercial egg assets of Pilgrim’s Pride, including two production complexes with capacity for 1.4 million laying hens.

For the six months ended 1 December 2012, sales increased by 12.6% to $601.8m, up from $534.2m, while net income declined by 10.2% to $23.7m, compared to $26.4m for the previous-year period.

Cal-Maine Foods, headquartered in Jackson, Mississippi, is primarily involved in the production, grading, packing and sale of shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs.