LAUREL, MISS. — On a per dozen basis, egg processor Cal-Maine Foods paid 23% more for feed during the second quarter of fiscal 2013, ended Dec. 1, than it did during the same period of the previous year. The higher feed costs combined with costs associated with recent acquisitions were reflected in the company’s second-quarter earnings.
For the quarter the company earned $14,290,000, equal to 60c per share on the common stock, a decline compared with the second quarter of fiscal 2012 when the company earned $23,260,000, or 97c per share.
Sales for the quarter were $328,870,000, up from $290,369,000 a year ago.
“We are pleased with the continued growth in sales for the second quarter of fiscal 2013; however, our operating results also reflect challenging market conditions and increased input costs,” said Dolph Baker, chairman, president and chief executive officer. “The higher sales reflect a 9.1% growth in dozens sold and a 4% increase in average selling prices compared with the second quarter of fiscal 2012.
“Our specialty egg sales accounted for 16.4% of dozens sold and 22.9% of total shell egg sales revenue for the quarter. Specialty eggs are an important area of focus for Cal-Maine Food’s growth strategy as they continue to gain popularity with consumers looking for healthy choices, and have higher and less cyclical retail selling prices. Specialty egg prices were up 4.8% in the second quarter of fiscal 2013 compared with the same period last year.”
Mr. Baker noted that the drought pushed corn and soy prices to the record high levels that eventually impacted the company’s earnings. He added that while the costs of feed have retreated from their peak levels, he anticipates Cal-Maine’s feed costs to remain “high and volatile” for the remainder of fiscal 2013.
Further pressuring earnings were costs associated with the company’s acquisition of Maxim Production Co., Inc., which included a feed mill and two production complexes with capacity for an estimated 3.5 million laying hens.
For the first six months of fiscal 2013, Cal-Maine Foods posted net income of $23,705,000, or 99c per share, down from $26,377,000, or $1.10 per share, during the same period of the previous year.