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Cal-Maine Foods, Inc. Message Board

  • hsrvesting hsrvesting Feb 14, 2011 2:42 PM Flag

    Feed Cost-Egg Price Spread

    is widening to the detriment of CALM.Corn is staying over $7.00 while eggs are dropping.

    Atlanta, GA Mon. Feb. 14, 2011 USDA Market News

    SHELL EGGS: Daily National Egg Market-at-a-Glance

    Regional prices are lower on Medium sizes, unchanged on
    Extra Large and Large. New York prices are steady. Retail
    demand is mostly moderate to good with improvements noted in
    the South Central region following severe weather conditions.
    Food service demand is light to moderate. Supplies are primarily
    moderate to light for immediate trade requirements. Market
    activity is moderate to instances slow. Breaking stock
    offerings are moderate for the moderate to good demand. Spent
    hen offerings are sufficient to heavy; demand is light to good.

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    • All this talk about corn prices killing them yet the company clearly states that it grows 95% of its feed needs and clearly states that feed costs going up actually benefits them ?!?! So they should make more money as feed costs rise as it prices out the non integrated egg producers. As for the company missing earnings this qtr, one must think this is reflected at some point. The company has probably $175mn in cash and 20k acres of farmland.

      • 2 Replies to schneckden
      • >> company clearly states that it grows 95% of its feed … has probably $175mn in cash and 20k acres of farmland.<<<<

        To produce 630 million dozen eggs one would have to own or farm over 200,000 acres. How does CALM feed all those hens on just 20,000 acres? CALM must be tremendously efficient farmers.

      • schneckden, You are mistaken CALM does not grow their feed,but they make their feed from the corn and soybeans they buy in the market.They do not grow anything only harvest eggs

        Currently the feed cost are jumping up and are hurting their margins.

        In the past CALM was abe to raise egg prices to compensate for higher feed cost.This is not happening and in fact egg prices have been sinking and are below yoy while feed cost are of corn and soybeans are arround 2x yoy.This may be the result of price fixing lawsuit againt CALM for their inability to raise prices while their cost are soaring

        These negative fundamentals I believe will make these next 2 qt.come in way below est.and the stock is fall.

    • >>ethanol plants here are paying $5.40 for immediate delivery. That INCLUDES the delivery<<
      You might want to phone a friend on that one.

      >>I meant feed inputs are 60% grains.<<
      What’s the other 40%?

    • You know, I actually believe you about your cocaine line. That habit has clearly caused you to lose your senses about anything substantive (pun intended). Due to your admitted drug use, you go on my ignore list.

    • what line in the sand JACK !

      The only line is my COCA line !

      You hope CALM doesn't rally to $40 by MAY cause you will lose big on your MAY $30 & $35 NAKED CALLS !!!

    • msch>>>Call him yourself. I've called them twice.>>>

      Well you don't seem to have much info to share for your efforts?

    • I meant feed inputs are 60% grains.

      Why do you spend so much time guessing. Call him yourself. I've called them twice.

    • FYI - it appears there is a size seller around in CALM. If I had to make a guess, it would be Royce, but I don't have any hard information to support that guess. At the moment, they appear to be leaning on it, but not trying to kill it. Considering that they are not being accommodated in like size, one has to wonder how patient they will be and how much of their position they want to lighten up. Who knows, they could even step away if they are afraid their weight will kill the stock and that is not their intention. The lines in the sand are $28.24 and then $28.

    • I quickly took Yahoo's est. for CALM which has Feb.11th for end of qt. which I see is wrong but that has no bearing on my thesis.Egg prices are low below $1.00 and last year's price and feed cost are up BIG,more that double last year's price.

    • I ascribed that to a typo since I already know that the actual date was 11/27/10. Most of us are susceptible to that flaw from time to time but let's let the gentleman provide his own response.

      I am ordinarily not a big earnings guy because I believe it usually just a cover for securities' supply and demand factors, but since the issue of input costs and low selling price has loomed so large in recent postings here, I figured I might as well get some feedback on the matter. If you have a guess, I welcome your involvement.

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