Higher feed costs crimp Cal-Maine earnings

by World Grain Staff
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JACKSON, MISSISSIPPI, U.S. — Higher feed costs bogged down earnings at Cal-Maine Foods, Inc. during the first quarter. For the quarter ended Aug. 27, the company had income of $3,117,000, equal to 13¢ per share on the common stock, down 35% from $4,763,000, or 20¢ per share, during the same period of the previous year. Sales for the quarter were $243,842,000, up 28% from $190,403,000.

“We are pleased with our overall performance for the first quarter of fiscal 2012,” said Dolph Baker, president and chief executive officer. “On a seasonal basis, the first-quarter period is historically the slowest period in our fiscal year. Total revenues for the first quarter were up 28% over the prior-year period, reflecting higher average selling prices for shell eggs and favorable retail demand. Volumes also improved over the same period last year as indicated by a 3% increase in total dozen eggs produced and a 7% increase in total dozen eggs sold. Sales of specialty eggs, which have a higher selling price, have continued to trend higher and were up 13% over the first quarter last year, representing approximately 16% of total dozen eggs sold for the first quarter of fiscal 2012.

“In spite of significantly higher feed costs, we were profitable for the quarter. Feed costs were up 15¢ per dozen compared with the first quarter of fiscal 2011, and we expect feed costs will remain very high and volatile for the year ahead. However, in spite of challenging market conditions, we look forward to the opportunities for growth in fiscal 2012. All of Cal-Maine’s operations have continued to run well, and we believe we are well-positioned for the strong holiday demand period ahead.”
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