Company overview

Fresh eggs account for the great majority of Cal-Maine Foods’ sales, with retailers buying most of its output. The company raises hens, makes most of its feed, and grades and packages eggs at its farms. It produces most of the eggs it sells and buys additional supplies from other producers as needed. Walmart, including Sam’s Club, is its largest customer and supplies a substantial share of revenue; Cal-Maine does not sell directly to consumers.

Its eggs range from conventional to cage-free and organic varieties, sold under customer store brands, its own Farmhouse Eggs brand, and licensed Eggland’s Best and Land O’ Lakes brands. A smaller prepared-foods business makes products such as cooked eggs, pancakes and wraps, including Van’s and Crepini products, for retail and foodservice customers.

What Cal-Maine earns depends heavily on egg selling prices relative to production costs. Conventional egg contracts generally track wholesale market prices or combine those prices with costs. Most specialty egg contracts use production-cost-based pricing, so their prices usually fluctuate less. Feed, chiefly corn and soybean meal, is the largest egg-production cost, and selling prices can fall below production costs.

State rules requiring more space for hens or cage-free production and sales restrict how eggs can be produced and sold in some markets. Cal-Maine is expanding cage-free capacity in response to these rules and customer goals, though customers’ goals depend on supply, affordability and consumer demand.