November 23, 2017

Largest US Egg Producer Reducing Cage Free Offerings

Almost 70% of US Egg retailers have committed to going cage free within the next 10 years, but one major producer is saying not so fast.  Jackson, Mississippi based Cal-Maine Foods has released a statement they will be adjusting their cage free production to be in line with “reduced demand” although it was open to increasing that capacity of demand trends change.

The news comes as Cal-Maine Foods posted a $16 million loss for the first quarter of fiscal year 2018.  A letter sent to investors indicated that while the company was pleased to have improved sales compared to the first quarter of FY 2017, there were still major headwinds.  Among them was specialty egg or cage free offerings.  The company acknowledged  the industry commitment to cage free offerings but said, “the higher price gap between conventional eggs and specialty eggs has resulted in reduced demand for specialty eggs.”  Accordingly, the company will be reducing cage free production, at least for now.

USDA National Retail Reports for shell eggs appeared to back up that data.  For the most recent report dated Sept 29th, a 12 pack of Grade A large white eggs averaged $1.07, roughly even with a year earlier and up eight cents from the prior week.  The same class of Cage Free eggs cost $1.76 and was down $1.03 from the prior week and down 39 cents from the year prior.  The agency also indicated significant retail offerings on organic and cage free, a move analysts say suggests inventory levels are building.