Cal-Maine shares fall amid avian influenza outbreaks

Company stock tumbled 15%
calendar icon 12 January 2023
clock icon 2 minute read

Shares of leading US egg producer Cal-Maine Foods dipped to their lowest level in over five months on Wednesday, extending declines after the deadliest bird flu outbreak in US history drove the stock to record highs last year, reported Reuters.

The Jackson, Mississippi-based company's stock has now tumbled 15% since its quarterly report in late December, which showed record profits that still missed analysts' expectations.

A daily pricing report from the United States Department of Agriculture (USDA) on Wednesday showed wholesale egg prices "steady to lower", while a recent USDA egg market review indicated consumer demand was dipping following the busy holiday season, but remained higher than at the same time last year.

Cal-Maine shares were last down 1.8% to $52.65, after dropping earlier to as $52.22, their lowest since last September.

Avian influenza has wiped out nearly 58 million birds in the United States since the start of 2022, according to the Centers for Disease Control and Prevention, driving up prices for chicken, eggs and other poultry products.

Wild birds transmit the virus, and infected birds often die. Entire flocks, which can top a million birds at egg-laying chicken farms, are culled to control the spread of the disease after a bird tests positive.

Surging egg prices helped drive Cal-Maine's stock up almost 50% last year, even as the S&P 500 tumbled 19%.

Cal-Maine's revenue more than doubled to $850 million in the quarter ending in November as it more than doubled its average selling price of a dozen eggs. But its $199 million net profit fell short of analyst estimates, with the company pointing to higher costs for feed due to weather, the war in Ukraine and the coronavirus pandemic.

Detection of the virus in commercial and backyard flocks has fallen sharply from highs of over 10 million birds last March and April. Cal-Maine also said in its quarterly report that no avian influenza had been detected at any of its facilities.

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