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Cal-Maine Foods, Inc. Message Board

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  • schneckden schneckden Feb 23, 2011 4:43 PM Flag

    Feed Cost-Egg Price Spread

    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.

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    • 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.

    • >> company clearly states that it grows 95% of its feed …..company 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.

 
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