In a release dated April 2^nd Cal-Maine Foods Inc. (CALM) announced results for the 3^rd Quarter of FY 2024 ending March 2^nd 2023. This report summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

It is noted that market conditions during Q3 2023 were exceptional with an average unit revenue for Cal-Maine of $3.30 per dozen for all eggs, compared with Q3 2024 with a corresponding price of $2.25 per dozen. 

Cal-Maine represents a bellwether for the shell egg sector as the only public-quoted, pure-play egg company in the industry, supplying 18 percent of domestic shell egg consumption. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $22.4 million ‘other income,’ Q3 2024 compared to $17.1 million in Q3 FY2023:

$ 0.44 million royalty income, Q3 2024 compared to $0.43 million Q3 FY2023

$ 11.3 million patronage dividends, Q3 2024 compared to $10.2 million Q3 FY2023

$7.5 million interest income, Q3 FY2024 compared to $6.1 million Q3 FY2023

$0.4 million loss on non-controlling interest Q3 2024 compared to $0.5 million Q3 FY202.

$96 million expenditure on properties and equipment in Q3 2024 compared to $86 million in Q3 2023.

Fassio Farms acquisition in Q2 2024: comprised 1.2 million hens, housing, packing plant and feed mill etc.

for $53.7 million representing $44.80/hen

Trailing P/E 6.4

52-Week Range in Share Price: $42.25 to $62.58 50-day Moving average $57.56

Market Close, Wednesday, April 2^nd $58.91 pre-release.

Post release, after-hours, 17H40 up 6.0 percent to $62.42.

In reviewing the CALM Q2 2024 quarterly report and the SEC 10-Q submission the following calculated values represent key data for the most recent Quarter of FY 2024. (Q3 for FY 2023 and percentage differences in parentheses):-

• Shell egg sales attained $675,850 million in Q3 2024 based on shell eggs comprising 96.2 percent of total revenue. ($961,090 million, in Q3 2023, based on 96.4 percent of revenue). (Sales value for shell eggs was down 29.7% reflecting lower average unit value).

• Dozen shell eggs sold (thousands): 300,779 (291,416; +3.2%)
• Average selling price of all shell eggs: $2.25 per dozen; ($3.30 per dozen; -31.9%).
• Average selling price of specialty eggs (excluding co-pack): $2.42 cents per dozen; ($2.62 per dozen; -7.7%).
• Average selling price of generic eggs: $2.15 cents per dozen; ($3.68 cents per dozen; -41.5%).
• Differential between specialty eggs and generic eggs: +$0.26 cents per dozen; (-$1.06 per dozen)
• Specialty eggs as a proportion of volume sold: 36.1%; (35.7%; +1.1%)
• Specialty eggs as a proportion of sales value: 38.5%; (28.2%; +36.5%)
• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q3 FY2024 : 86.3% (90.3%; -4.4%).
• Farm feed cost: 54.4 cents per dozen, (67.9 cents per dozen, -19.9%) Includes specialty and breeder diets. Differential represents $42.2 million over Q3.
• Egg product sales in Q3 FY 2024 attained $21.8 million or 3.1% of sales value at a unit price of $1.16 per lb. For Q3 2023, sales of $32.6 million were down 33.1% in value with a unit price of $1.94 per lb. down 40.2% in unit value.
• Cal-Maine Foods maintained a flock of 41.2 million hens on average during FY 2023 with 10.8 million pullets plus parent breeders representing less than two percent of the total flock. 

The following observations relate to the comparison of Q3 2024 with the corresponding Q3 FY2023:-

• Cal-Maine Foods was not affected by the 2022-2023 HPAI epornitic during FY 2022 or FY 2023. During Late December 2023 (Q3 FY 2024) the Chase, KS. Complex comprising 1.5 million hens and 240,000 pullets, representing 3.3% of the total flock was depopulated as a result of HPAI. On April 1^st 2024 (Q4 2024) the Farwell, TX complex was confirmed positive requiring depopulation of 1.6 million hens and 0.34 million pullets.
• Q3 of FY 2024 represented a less favorable marketing comparison to Q3 FY 2023 based on lower prices for shell eggs, as U.S. flocks were re-populated, coupled with restoration of normal consumer demand. Average shell egg price obtained by Cal-Maine was 31.9 percent lower than in Q 3 FY 2023.
• Comparing Q2 FY 2024 with Q2 FY 2023 gross profit was impacted negatively by lower unit revenue for generic eggs although with some benefit from specialty eggs. The 19.9 percent lower feed cost to 54.4 cents per dozen was partly offset by 5.5 percent higher farm production costs attaining 42.1 cents per dozen,
• In a market characterized by low unit prices for generics, the relative contribution of specialty eggs is more important to net earnings in contrast to an up-market for conventional eggs. Normality was restored in FY 2024 with generic eggs at a lower unit price and margin compared to specialty eggs.

In commenting on Q3 results Sherman Miller, president and CEO stated, , “We are very pleased with Cal-Maine Foods’ strong financial and operating performance for the third quarter of fiscal 2024. Our sales reflect lower average selling prices compared to a year ago, when the shell egg industry experienced record high market prices due primarily to the impact of highly pathogenic avian influenza (“HPAI”) and other market factors resulting in a significant reduction in supply. While the more recent outbreaks of HPAI have also affected supply and caused market prices to move higher, the overall market impact has not been as severe. Fueled by strong demand, our total sales volumes (dozens sold) for the quarter were higher than the third quarter of fiscal 2023 and reached a Company record. Consumer demand for eggs has been strong, especially during the winter holiday season. We have worked hard to meet this demand with a favorable product mix of conventional and specialty eggs, as well as enhanced egg products offerings. Our managers and employees have continued to efficiently run our operations in a challenging environment due to the impact of and ongoing threat of HPAI. Despite the distractions, we have continued to meet the needs of our valued customers”.

Referring to acquisitions Miller stated “In addition to our strong organic growth opportunities, we are pleased with the operational performance and successful integration of our acquisition of assets of Fassio Egg Farms, Inc., located in Erda, Utah outside of Salt Lake City, acquired in our second fiscal quarter. Following the end of the third quarter, we completed the acquisition from Tyson Foods, Inc. (NYSE:TSN) of a recently closed broiler processing plant, hatchery and feed mill located in Dexter, Missouri. We intend to repurpose the acquired assets for use in egg and egg products production. We remain focused on identifying other acquisition opportunities that complement our operating model and further extend our market reach.”

The 10-Q Report documented approved capital investment of $233 million for cage-free conversions and additional upgrades to processing for FY 2024 through FY 2027 with a provision for improvements to the Missouri broiler complex acquired from Tyson Foods. Of this total $152 million has been committed with $81 million to be expended.

During late 2022 Cal-Maine Foods joined in the formation of ProEgg, Inc. a Capper-Volstead Act Farmers’ Cooperative to distribute eggs in 13 western states. The objective is to enhance service to customers in the region by ensuring a secure supply chain.