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The largest egg seller in the United States reported that it had skyrocketed profits amid the avian flu epidemic, which has pushed prices high, and admitted to being contacted by US officials investigating price lockdowns.
Cal-Maine Foods reported net profit of $508.5 million on Tuesday of the December-February quarter. This is an increase of 247% from the previous year. The company rated the average egg price increased by 80% from the resulting level of the same period last year.
Ridgeland, Mississippi, saw its company revenue jump as wholesale egg prices hit record highs in February. The long-standing outbreak of avian flu has forced producers to culle 330 million birds so far this year. According to the Bureau of Labor Statistics, numerous big egg buyers in US cities paid the most for over a decade in February.
Sherman Miller praised the efforts of egg producers to continue “maximizing production throughout a period of high demand” and “recent acquisitions” to increase revenues, which will help improve production capacity in this challenging supply environment.
But the results come from increasing accusations from independent farmers and consumer advocates that Cal-Maine and other large-scale producers are artificially keeping prices high. According to the product price information service Expana, wholesale egg prices fell from $8.58 per dozen in February to $3.91 last week.
Cal-Maine said it has made “great progress” to end the national egg shortage by increasing the average number of chickens by 14% over the past year and investing in biosecurity.
Price drops also accelerated after the Justice Department began investigating egg producers’ price fixes. Cal-Maine said it was cooperating with the investigation last month after receiving a request from the department for a civil investigation in its filing of securities.
The family of Cal-Maine founder Fred R Adams has reached an agreement to convert super-voting stock into common stock prior to a potential stock buyback, seeking to win the company’s recent success.
US farmers last week said consumers should start seeing prices falling at grocery stores soon, saying enough supply has recovered to ensure that many chains stop implementing purchase restrictions.
