January 2, 2013

Cal-Maine Foods Inc.'s earnings for the fiscal second-quarter have declined by 39% as costly feed prices and acquisition expenses more than exceed past the benefits from higher prices for fresh-shell eggs.

The largest producer and distributor of fresh-shell eggs in the US said the severe drought over the summer months pushed corn prices to record high levels at the end of the summer. Cal-Maine also expects its feed costs to remain high and volatile for the remainder of fiscal 2013.

Cal-Maine has stepped up efforts to meet the growing demand for specialty eggs--like nutritionally enhanced, organic and cage-free--which garner higher retail prices. Still, rising production costs, especially for feed, have pressured the company's margins of late.

The company sold 238.1 million dozen eggs, up 9.1% from a year ago, and the average price rose 4% to US$1.32 a dozen. Specialty egg sales accounted for 16% of the dozens sold and 23% of total shell-egg sales.

Shares closed on December 28 at US$44.46 and were inactive premarket. The stock has risen 22% since the start of the year.