Cal-Maine Foods (CALM), the top egg producer in the US, reported a 90% drop in profit due to falling egg prices. However, a recent bird flu outbreak at a Kansas facility in late 2023 — affecting 3% of the total flock — could send egg prices higher.
Yahoo Finance’s Brooke DiPalma, Anjalee Khemlani, and Josh Schafer weigh in on the potential return of "eggflation" prices.
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Editor's note: This article was written by Eyek Ntekim.
Video Transcript
BROOKE DIPALMA: Food also a major focus of this all. And I'm closely watching-- closely watching groceries. One of the biggest gauges though that we saw in 2023, we're taking with us in 2024-- egg-flation. Now, Cal-Maine, the biggest egg producer here in the US, says profit fell 90% from a year ago as egg prices came down. But there's a catch, higher prices could be on the horizon as a result of a recent outbreak of the bird flu.
Now this outbreak did happen at one of their Kansas facilities. We now know that the direct impact of that was roughly 3% of its total bird-- total flock, so its total egg laying hens. And that roughly accounts for 1.5 million birds. So there really is a significant number. Cal-Maine is the top egg producer here in the US. And many worried that this could be a trickle effect of higher egg prices that we could see in the near future.
ANJALEE KHEMLANI: Do we care? I mean, I mean, I don't know.
BROOKE DIPALMA: Do you have this conversation? I care. I care.
JOSH SCHAFER: I care. I wonder at what point though we're past the inflation story of, oh, no, it's coming back. Oh, no, it's coming back. It's going to go back up to $3.50 as we just showed in that graphic. We had on our screen of what eggs cost last year, right?
Maybe they're just never going back to $1.14 like they were in 2019, right? $1.14 is pretty cheap for eggs. Maybe that's just not coming back, but it doesn't mean that you're all of a sudden going to have to pay 6 or 7 bucks for eggs at like we were seeing at some places, right, depending on where you live and if you're buying organic non-organic. I just think at some point, maybe it's just OK and like, it's not going to be that big of a deal. I don't know that's how I-- that's how I'm viewing the graph.
ANJALEE KHEMLANI: Yeah. I mean, do you think that there will be more of a push for non-organic egg then? Because if someone is-- I mean, if you're really watching your expenses. And if you really want to be healthy, right, you're going to look at the organic prices. And you're going to probably pick the lower end of that. Is that $4? Is it $5? And then does that additional dollar or so really give you the motivation to walk away and then go to non-organic?
BROOKE DIPALMA: Yeah. And there are so many things to consider when you think about this egg production industry. I mean, you're thinking of the feed for the hens, you're thinking of the soil. You're thinking of so many different things that's needed in order to do this. And many experts that I've spoken to over the past year is that this is a volatile item. This will continue to change year-over-year. But with this bird flu being an impact, this has been more volatile than usual. So one to watch certainly.
