Cal-Maine Foods, Inc. has highlighted the potential for volatile feed prices and the continued effects of the avian influenza outbreak on the egg supply.
Feed Prices Outlook
The company acknowledges that there are current indications of a better stocks-to-use ratio for corn, suggesting the possibility of lower prices in the near future. However, Cal-Maine Foods also recognizes that uncertainties such as weather patterns and disruptions in the global supply chain could lead to continued volatility in feed prices. Additionally, there is a tight supply of soybean meal relative to demand in the second quarter of fiscal 2024.
Impact of Highly Pathogenic Avian Influenza (HPAI) on Egg Supply
Until November 2023, there had been no significant outbreaks of HPAI in commercial table egg layer flocks since December 2022. However, outbreaks of HPAI continue to occur in U.S. poultry flocks. As of January 3, 2024, the USDA division of Animal and Plant Health Inspection Service reported that approximately 12.9 million commercial table egg layers and 1.5 million commercial table egg pullets had been depopulated due to HPAI outbreaks since November 2023.
Cal-Maine Foods believes that it can mitigate the loss of production through flock rotations and remains committed to implementing robust biosecurity programs across its locations. However, the company acknowledges that no farm is immune from HPAI. The virus still exists in the wild bird population, and the potential for future outbreaks, especially during migration seasons, cannot be predicted. While the U.S. Centers for Disease Control and Prevention states that these detections do not pose an immediate public health concern, Cal-Maine Foods anticipates that the HPAI outbreak will continue to impact the overall supply of eggs until the layer hen flock is fully replenished.
According to the USDA, as of December 1, 2023, the U.S. layer hen flock consisted of 321.6 million hens producing table or market type eggs, which is 2.6% below the five-year monthly average of 330.1 million hens from 2018 to 2022.
