Egg Giant's Profit Pain May Mean More Savings for U.S. Consumers
(Bloomberg) -- Egg lovers can look forward to cheaper omelets at brunch.
Cal-Maine Foods Inc., the biggest U.S. producer and distributor, said lower prices may be coming as there will be more chickens to lay eggs. The number of chicks hatched is up 11 percent since the beginning of the year, the company said in a statement Monday. That helped drive down shares.
It’s also been costing more to produce eggs. Soybean meal, which chickens eat, contributed to a 10 percent jump in the company’s feed costs, according to the statement. While U.S. farmers are currently harvesting what’s expected to be a record soybean crop, prices are volatile due to a trade war raging with China, the biggest buyer of the oilseed. That’s creating “market uncertainty,” the company said.
Cal-Maine’s shares fell as much as 12 percent on Monday, the steepest intraday loss in three years. In its fiscal first-quarter report, the company missed the lowest analyst estimate for earnings, and also missed sales expectations.
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