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Higher egg prices may extend far into 2025, and egg producers like Cal-Maine could benefit [1]
['Sat', 'Jan', 'Min Read']
Date: 2025-02-20
Eggs are starting the year on a rotten note as prices surge after the return of the bird flu.
According to the latest USDA report from mid-December, US egg production is down 4% year over year, with 3% fewer egg-laying hens. Per Datasembly, eggs are at their highest price since January 2023.
Lower production is expected until egg producers can rebuild their flocks. Consumers can expect a "continuation of higher-than-usual egg prices," Kevin Bergquist of Wells Fargo told Yahoo Finance.
Elevated prices could extend into the second half of the year โ or longer โ per Texas A&M professor David Anderson.
"In some of these farms, not only do you lose your current producing chickens, you lose the next generation, which makes it even harder to rebuild total flocks," Anderson said.
In California, one of the states hardest hit by the bird flu, egg prices are nearly $9 per dozen to start the year.
Given that the holidays typically drive demand for eggs, Bergquist said prices "could decline" from the December 2024 peak, though demand may rebound once Easter rolls around.
Nationally, a dozen large Grade A eggs cost $3.65 on average in November, compared to $3.37 in October and $2.52 at the start of 2024.
However, there is good news for some egg producers, as the decreasing cost of feed (corn (ZC=F) and soybean meal (ZMT=F)) helps fatten margins.
"With these higher prices, there's certainly profit to build up more if all your chickens didn't die, this is a great time to be selling eggs," Anderson said. "We've got record high prices. We've also got very low feed costs."
He said there's also an "underlying" increase in demand as price points for other proteins like beef increases.
This could be a perfect storm for America's largest egg producer, Cal-Maine (CALM), which supplies eggs to Walmart (WMT) and many private-label brands.
"You're seeing a well-run commodity business benefit from a rise in the commodity price," New Constructs' David Trainer told Yahoo Finance over the phone. "When prices are high, they can make lots of money."
Per Stephens analyst Pooran Sharma, Cal-Maine supplies about 20% of the overall US shell market.
Signage notes a limit due to limited quantities of eggs at a grocery store in Manhattan Beach, Calif., on Jan. 2, 2025. Bird flu and other factors have contributed to an egg shortage in California. (Patrick T. Fallon / AFP via Getty Images) ยท PATRICK T. FALLON via Getty Images
In its second quarter results, revenue increased 82% year over year to $954.7 million, soaring past Wall Street estimates of $751.5 million.
Net income for the quarter also came in higher at $219.1 million compared to the $208 million expected.
"Our results also reflect higher market prices, which have continued to rise this fiscal year as supply levels of shell eggs have been restricted due to recent outbreaks of highly pathogenic avian influenza ('HPAI')," Cal-Maine Foods CEO Sherman Miller said in the release.
Story Continues
Sharma compared eggs to the real estate market, calling it a "seller's market." Consumers are "trying to get their hands on cartons of eggs right now," he said. Cal-Maine is ramping up its production while the rest of the industry is "losing supply." However, Sharma said Cal-Maine's stock is "too rich" to get in now at nearly $105 per share, given its price-to-book ratio of $2.51, per Yahoo Finance data. In 2023, once bird flu died down, egg prices dropped, and so did the company's stock, Sharma said. A similar scenario might play out in 2025. "If you didn't get in already, you missed the train. If you get in now, you might have a bad ride," Sharma added. On the other hand, Trainer called the stock "very attractive" "You're going to continue to see a business that outperforms.," Trainer said. "Based on current profits, it's still pretty cheap. There's probably another 10% to 20% upside here. Then ... you're looking at a cyclical peak, and the stock's probably topped out, which indicates it's time to probably take profits." Shares of Cal-Maine are up nearly 90% in the past year, handily beating the 24% gain from the S&P 500 (^GSPC). โ Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at
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