Higher average selling prices and increased volume helped the nation’s largest egg producer report record sales for its first quarter.
Cal-Maine Foods said its sales for the period ended August 31 increased 17% to $319.5 million from $272.9 million the prior year. The company sold 242.5 million dozen eggs compared to 210 million dozen the prior year. Despite the increase volume and higher average selling prices, increased input costs for grain eroded company profits which declined to $8.8 million, or 36 cents a share, compared to $9.4 million, or 39 cents a share, the prior year.
Dolph Baker, Cal-Maine’s chairman, president and CEO, called the performance a strong start to the year and noted that feed costs appear to be improving along with demand for the company’s higher margin specialty eggs.
“Specialty eggs have continued to gain in popularity with consumers and accounted for 16.2% of dozens sold and 24.6 percent of total shell egg sales for the first quarter,” Baker said. “The average selling price of specialty eggs also increased 5.5% over the first quarter last year. Cal-Maine Foods is well positioned to capitalize on the growing demand for specialty eggs and we will continue to focus on enhancing our product mix with a full complement of conventional, cage-free, organic and nutritionally enhanced eggs.”
The big headwind for the company in the first quarter was grain prices that were 6.7% higher than the previous year and added 3.4 cents to the cost per dozen.
“However, we are encouraged by the favorable growing conditions this summer, which have improved the yield of this year’s corn and soybean crops. As a result, prices have already come down from the previous high levels and we expect to incur lower feed costs for the remainder of fiscal 2014,” Baker said.