CAL-MAINE FOODS INC (CALM) Business
This page reproduces the company's own Item 1 Business text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Informational only - not investment advice. See Disclaimer.
BUSINESS
Overview
We
are the
largest
egg company
in the United
States
(“U.S.”)
and a
leading
player in
the egg-based
food
industry.
We
strive to
be
the
leading
consumer
-driven
provider
of
nutritious,
affordable,
and
sustainable
eggs
and
egg-based
foods
that
fit
today's
lifestyles.
Our
vision
is to
ensure
that
healthy,
affordable
eggs and
egg-based
food
choices
are accessible
to every
household,
every
day.
We
sell most
of our
products
throughout
much
of the
U.S. and
aim to
maintain
efficient,
state
-of-the-art
operations
located
close to our customers.
We were founded
in 1957
and
are headquartered
in Ridgeland,
Mississippi.
5
The
Company’s
shell
egg
portfolio
spans
the
full
egg
value
ladder
—from
conventional
to
specialty,
including
cage-free,
nutritionally
enhanced,
organic,
brown,
pasture
-raised,
and
free-range
eggs—serving
both
retail
and
foodservice
customers
nationwide.
Cal
-Maine
Foods
also
participates
in
the
growing
prepared
foods
sector,
with
offerings
such
as
pre-cooked
egg
patties,
omelets,
folded
and
scrambled
egg
formats,
hard
-cooked
eggs,
pancakes,
waffles,
and
specialty
wraps.
Our
branded
portfolio includes
Eggland’s
Best®,
Land O’Lakes®,
Farmhouse
Eggs®,
4Grain®,
Sunups®,
Van’s®,
MeadowCreek
Foods®,
and
Crepini®.
When
we use
“we,”
“us,” “our,”
“Cal
-Maine Foods,”
or the
“Company”
in this report, we
mean
Cal
-Maine Foods,
Inc. and
its
consolidated
subsidiaries, unless
otherwise indicated
or the context
otherwise requires.
The Company’s
fiscal year
-end is
on the Saturday
closest to May 31. Our fiscal year 2026 ended
May 30, 2026, and
the first three
fiscal quarters
of fiscal 2026 ended
August 30, 2025, November
29, 2025, and
February 28, 2026. All references herein
to a fiscal
year
means
our fiscal year
and
all references to
a year
mean
a calendar
year.
Operating
and Reportable
Segments
We
previously managed
our business as one operating
and
one reportable segment.
Effective
in the fourth
quarter of fiscal
2026,
we
revised our
internal reporting
to
change
the manner
in which
we manage
our business,
which reflects
a focus
on managing
operations
based
on
our
product
categories
rather
than
on
a
consolidated
basis.
As a
result,
we
identified
three
reportable
segments: Conventional
Shell Eggs,
Specialty
Shell Eggs, and
Prepared Foods.
Our remaining
operations
,
which include co-pack
shell eggs, egg products,
hard
-cooked eggs and other business
activities, are not reportable
segments, as defined
by the applicable
accounting
standard
.
Conventional
Shell Eggs
The
Conventional
Shell
Eggs
segment
consists
primarily
of
the
production,
grading,
packaging,
marketing
and
distribution
of shell eggs
sold as conventional
shell eggs, which includes our
brands
Sunups®
and
Sunny Meadow®.
Specialty
Shell Eggs
The Specialty
Shell Eggs
segment
consists
primarily
of the production,
grading,
packaging, marketing
and distribution
of shell eggs sold as cage
-free, nutritionally
enhanced
,
organic, brown, pasture
-raised and free-range
eggs. This segment
includes
our brands
Farmhouse
Eggs
® and
4Grain®
as well as
branded
products from
our
cooperative
membership
in
Eggland’s
Best,
Inc. which includes
Egg-Land’s
Best®
and
Land O’ Lakes®
branded
eggs
.
Prepared
Foods
The
Prepared
Foods
segment
consists
primarily
of the
production,
packaging,
marketing
and
distribution
of
prepared
foods product
offerings
such as
pre-cooked
egg patties,
omelets,
folded and
scrambled
egg formats
,
pancakes,
waffles
and
specialty
wraps. This segment
includes
our brands
Van
’s®
and
Crepini®.
All
prior
fiscal
year
periods
have
been
recast
to
reflect
the
new reportable
segments.
For
additional
discussion
regarding
the
change
to
our
new reportable
segments,
see
Note 15 – Segment Reporting
in
Part II.
Item
8. Notes
to
Consolidated
Financial
Statements.
Growth
Strategy
Cal
-Maine Foods’
long-term
growth
strategy
is focused
on building
a diversified
egg-based
food
platform
that
extends beyond
conventional
shell eggs and enhances
the Company’s
earnings profile and
resilience across market
cycles. The Company
intends
to leverage
its market
position, vertically
integrated operations,
strong balance
sheet, and longstanding
customer relationships
to
pursue opportunities
that
drive sustainable
growth, expand
margins, and
diversify its revenue
streams.
The Company’s
growth initiatives include increasing
the proportion of specialty shell
eggs in its sales mix, expanding
its prepared
foods
and
egg
products
businesses,
strengthening
and
extending
its
portfolio
of
branded
offerings,
and
pursuing
strategic
acquisitions
and
organic
investments
that
complement
its existing
capabilities.
Within
its
conventional
shell egg
business,
the
Company
employs
a
balanced
pricing
strategy
that
combines
market
-based
and
structured
pricing
arrangements
intended
to
participate
in
favorable
pricing environments while enhancing
earnings visibility and
cash flow stability over time.
The Company
also
continues
to
invest
in
biosecurity,
productivity
initiatives,
and
vertical
integration
to
reinforce
cost
leadership
and
supply
reliability
and
seeks
to
expand
its
geographic
presence
and
customer
penetration
through
disciplined
capital
allocation
and
investments
that
enhance
its production,
distribution, and
commercial
capabilities.
6
The
Company
currently
has
multiple
expansion
initiatives
underway
for
its
Prepared
Foods
segment.
At
Echo
Lakes
Foods
facilities, the Company
has a network optimization
and capacity
expansion project
underway,
which is
expected
to add 17 million
pounds
of annual
scrambled
egg production
by
mid-to-late-fiscal
2027,
as
well
as a
high-speed
pancake
line project,
which is
expected
to
add
an
additional
12
million
pounds
of
annual
production
through
early-to-mid-fiscal
2027.
In
addition,
the
Company’s
joint venture,
Crepini
Foods,
is investing
in new
equipment
and line
installations
that is
expected
to add
18 million
pounds of additional
production
capacity gradually over the next 12 to 18 months with expected completion
by early-to-mid fiscal
2028. In
total, these
planned
investments
are expected
to grow Cal
-Maine’s
prepared foods
production
capacity
by more than 30
percent
from
mid-2027
through 2028.
Management
believes that
the combination
of conventional
and
specialty
shell eggs, prepared
foods,
egg products,
and branded
offerings creates
a more balanced
and diversified business model that
is better positioned to serve evolving
consumer preferences
and
customer
needs.
Through
these initiatives,
the
Company
seeks to increase
its normalized
earnings
power
and
create
long-
term value
for its customers
and
shareholders.
Acquisitions
Throughout
our
history,
we
have
acquired
other
businesses
in
our
industry.
Since
1989,
we
have
acquired
and
integrated
28
businesses.
Within the
last two fiscal
years, we
have
made
the following significant acquisitions.
Effective
May 12,
2026, we acquired
certain
assets of
the Van’s
Foods
(“Van
’s”) business
of Sara
Lee Frozen
Bakery,
LLC
for
approximately
$24.8 million.
The assets acquired
are expected
to help support our
strategy
to diversify our
business model,
grow
in prepared
foods
business-to-retail, and
deliver greater value
across the
supply chain.
Effective
March 2, 2026, we acquired the shell egg, egg products, and
prepared foods
assets of Creighton Brothers LLC, including
Crystal Lake LLC (“Creighton”),
for approximately
$129.3 million. The acquired
assets include commercial
shell egg production
and grading with capacity
of approximately
3.2 million layers, including 500 thousand
cage-free layers, and 865 thousand
pullets,
a feed
mill,
and
1,007
acres of
land, as
well
as
an
egg products
and
hard
-cooked
egg processing
facility
located
near
Warsaw,
Indiana.
The transaction
expands the geographic scale of our shell egg platform
while also adding nearby
liquid egg capacity
that
we believe
will strengthen
our integrated
value
chain.
Effective
October
10,
2025,
we
acquired
certain
assets
of
Clean
Egg,
LLC
(“Clean
Egg”)
based
in
Langwood,
Texas,
for
approximately
$23.7 million.
The assets acquired
included 677
thousand
brown cage-free and
free-range layers
and pullets
,
and
other inventory,
machinery
and
equipment
related
to its contract
production
and
egg processing business.
Effective
June 2, 2025,
we acquired
Echo Lake
Foods, LLC and
certain
related companies
(collectively
“Echo Lake Foods”)
for
approximately
$289.5
million.
Echo
Lake
Foods
is
based
in
Burlington,
Wisconsin
and
produces,
packages,
markets
and
distributes
prepared foods,
including
pre-cooked
egg patties,
omelets,
folded and
scrambled
egg formats,
pancakes
and waffles.
The acquisition
has expanded
our prepared foods
product line and customer
base. Our previously
announced
projects to increase
efficiency
and
expand
production
capacity
are ongoing and
expected
to continue
throughout
mid to late
fiscal 2027.
During
the third
quarter
of fiscal
2025,
we
acquired
certain
assets
of Deal
-Rite
Foods,
Inc.
and
certain
of its
affiliates
(“Deal-
Rite”). The
assets acquired
included two
feed mills,
storage facilities,
usable
grain, vehicles,
related
equipment
and a retail feed
sales
business
located
in North
Carolina.
The acquired
assets
will
produce
and
deliver
feed
to our
nearby
shell egg
production
operations.
During the second
quarter of fiscal 2025, we
completed
a strategic investment
with Crepini LLC, establishing a new egg products
and prepared
foods venture.
Crepini LLC, founded
in 2007, grew its
brand throughout
the U.S. and
Mexico featuring
egg wraps,
protein
pancakes,
crepes, and
wrap-ups, which
are
sold online
and
in over 3,500
retail stores.
The
combined
entity,
located
in
Hopewell
Junction,
New York,
operates
as Crepini
Foods LLC
(“Crepini”).
We
capitalized
Crepini
with
approximately
$6.75
million in
cash to purchase
additional
equipment
and other assets
and fund
working capital
in exchange
for a 51%
interest in
the
new venture.
Crepini LLC contributed
its existing assets
and
business in exchange
for a
49% interest
in the new venture.
During
the
second
quarter
of
fiscal
2025,
we
acquired
the
remaining
ownership
interests
in
MeadowCreek
Foods,
LLC
(“MeadowCreek”)
and
it became
a wholly-owned
subsidiary
of the
Company.
Our initial
investment
in MeadowCreek
was
in
fiscal 2022.
MeadowCreek
began operations
during the
fourth quarter
of fiscal
2023 with
a focus
on being
a leading
provider of
hard
-cooked
eggs.
During
the
first
quarter
of fiscal
2025,
we
acquired
substantially
all the
commercial
shell
egg
production,
processing
and
egg
products breaking
assets of
ISE America, Inc.
and certain
of its affiliates
(“ISE”). The
assets
acquired included
commercial
shel
l
egg
production
and
processing
facilities
with
a
capacity
at
the
time
of
acquisition
of
approximately
4.7
million laying
hens,
7
including 1.0 million
cage-free, 1.2 million
pullets, feed mills, approximately
4,000 acres of land, inventories and an egg products
breaking
facility.
The
acquired
assets
also
include
an
extensive
customer
distribution
network
across the
Northeast
and
Mid-
Atlantic states,
and production
operations
in Maryland,
New Jersey,
Delaware and
South Carolina. These
production
assets
were
our first
in Maryland,
New Jersey
and Delaware.
This
acquisition
provided
us with
an opportunity
to enhance
our market
reach
in the
Northeast
and
Mid-Atlantic states.
For additional
discussion of our acquisitions
during the last
two fiscal years,
see
Note 2 - Acquisitions
in Part
II. Item 8. Notes to
Consolidated
Financial
Statements.
Egg Industry
Background
According to the U.S. Department
of Agriculture (“USDA”) Agricultural
Marketing Service,
in 2025
approximately
69% of table
eggs produced in the
U.S. were sold as shell
eggs, with 55%
of such shell eggs sold through
food-
at
-home outlets such as grocery
and convenience
stores, 12% sold
to food
-away
-from home channels such as restaurants
and 2% exported
.
The USDA estimate
d
that
in 2025
approximately
31%
of
eggs produced
in the
U.S. were sold
as
egg products
(shell eggs broken
and
sold in
liquid,
frozen, or dried
form).
Given
historical
consumption
trends,
we
believe
that
general
demand
for eggs
in the
U.S.
increases
basically
in line
with
the
overall
U.S.
population
growth;
however,
specific
events
can
impact
egg
supply
and
consumption
in
a
particular
period,
as
experienced
with the
2015
highly
pathogenic
avian
influenza
(“HPAI”)
outbreak,
the COVID-19
pandemic
(particularly
during
2020),
and
the
most
recent
HPAI
outbreaks
that
started
in
early
2022.
For
fiscal
2026,
shell
egg
household
penetration
was
approximately
97%. According to the USDA’s
Economic Research
Service,
estimated
annual per capita
consumption
in
the
U.S.
between
2021 and
2025
varied,
ranging
from
260
to
286 eggs
which
was
directly
impacted
by available
supply.
The
USDA
calculates
per capita
consum
ption by
dividing total shell egg disappearance
in the U.S. by the U.S. population.
The most
significant
shift in demand
over the
past decade
has been
among
specialty
shell eggs,
particularly
cage-free eggs.
For
additional
information,
see “Specialty
Shell Eggs” below.
HPAI
Our
industry
has
been greatly
impacted
by several
outbreaks
of HPAI
in recent
years.
Following the
HPAI
outbreaks
in 2015,
there were no
reported
significant outbreaks
of HPAI
in the commercial
table
egg layer flocks
until February
through December
2022.
Thereafter,
there
were no HPAI
cases affecting
commercial
layers
until November
2023.
Since 2023,
outbreaks
of HPAI
have continued
to occur in
U.S. poultry flocks.
In 2024 and
2025, 40.2 million and 45.2 million commercial layer hens
and pullets
were
depopu
lated
due to
HPAI,
respectively.
To
date
in 2026,
through July
20,
2026,
19.2
million layer
hens and
pullets have
been depopulated
due to
HPAI.
On March
14,
2026,
we experienced
an
HPAI
outbreak
within our pullet
facility
in Maryland,
resulting in
the
depopulation
of
approximately
352,000
pullets. Subsequent
to fiscal 2026,
operations
have
fully resumed.
HPAI
is currently widespread
in the wild bird
population
worldwide.
Further,
according
to the U.S. Centers
for Disease
Contro
l
and Prevention
(“CDC”),
as of
July 16,
2026, there
have been
outbreaks
of HPAI
in 1,166 herds
of dairy
cows in
20 states,
and
71 human
cases in the U.S., almost entirely
among
poultry and dairy
workers, since
the latest outbreak
began. Two of
the human
cases resulted in severe illness
after the patient
was exposed to sick and dead birds in backyard
flocks. Both patients were reported
to have
underlying health
conditions and
died in 2025.
There have
been no reported
cases of person-to-person
spread.
According
to the CDC, the human
health risk to the U.S. public
from the HPAI
virus is considered
to be low.
We remain
dedicated
to robust
biosecurity
programs
across
our
locations
and
have
invested
more
than
$92
million
in
biosecurity
technology,
equipment,
supplies,
procedures,
and
training across
our
locations
since the
major
HPAI
outbreak
in 2015.
However,
no
farm
is immune
from
HPAI.
The
extent
of
possible
future
outbreaks
among
U.S.
commercial
egg
layer
flocks,
with
heightened
risk
during
migration seasons,
cannot
be predicted. According
to the USDA, HPAI cannot
be transmitted
through safely handled and properly
cooked eggs.
There is no known
risk related to HPAI
associated
with eggs that are currently
in the market
and no eggs have
been
recalled
relating to
HPAI.
For additional
information,
refer to
Part I. Item 1A. Risk Factors
.
Prices for Shell Eggs
Wholesale
shell egg
sales prices
are a
critical
component
of revenue
for the
Company.
Wholesale
shell egg prices
are volatile,
cyclical,
and impacted
by a number
of factors,
including
consumer demand,
seasonal
fluctuations,
the number
and productivity
of laying
hens in
the
U.S. and
outbreaks
of agricultural
diseases
such as
HPAI.
We
believe
the majority
of conventional
shell
eggs sold in the U.S. in the retail and foodservice
channels are sold at prices that take
into account, in varying ways, independently
8
quoted
and
certified wholesale market
prices, such as those
published by
Urner Barry Publications,
Inc. (“UB”) or the USDA for
shell eggs;
however,
grain-based
or variations
of cost
plus arrangements
are also
commonly
utilized.
Wholesale prices
for cage-free eggs are also quoted
by independent
sources such as UB
and the USDA. There
is no independently
quoted
wholesale market
price for other specialty
shell eggs such as nutritionally
enhanced,
organic, pasture
-raise and free-range
eggs.
Specialty
shell eggs
are typically
sold
at
prices and
terms negotiated
directly with
customers
and
in the
case
of cage
-free
eggs, can
be sold at prices
that take
into account
one of the independently
quoted
markets.
Historically, prices for specialty
shell
eggs have
generally been
higher due to customer
and
consumer
willingness
to pay
more for
specialty
eggs.
The
weekly average
price for
the
southeast
region for large
white
conventional
shell eggs as
quoted
by UB
is shown
below
by
fiscal quarter
for the past three
fiscal
years along with
the average price
for the
past five
fiscal
years
.
The actual
shell egg prices
that we realize
on any
given transaction
may
not necessarily equal
quoted
market
prices because of the
individualized
terms that
we
negotiate
with
individual
customers
,
which
take
into
account
many
factors.
As
further
discussed
in
Part II. Item 7.
Management’s Discussion and Analysis – Results of Operations
, egg prices in
fiscal 202
4
through fiscal
2026
were significantly
impacted
by HPAI.
Our pricing for shell eggs is negotiated
with our customers on individual
terms. We
sell our shell eggs at prices based
on formulas
that take
into account, in varying ways, one of the independently
quoted
regional wholesale market
prices for shell eggs, our costs
of production,
such as grain-based,
or hybrid
models
which include
elements
of cost of
production
and wholesale
market
prices.
Almost
all
of
our
conventional
shell
eggs
are
priced
and
sold
under
market
-based
pricing frameworks
or
the
hybrid
models
described above,
split almost evenly between such frameworks.
The majority
of our specialty shell eggs are
priced and sold under
frameworks
that are based
on cost of production, although
we do have
some customers
that prefer market
-based pricing for
cage-
free
eggs. As
a result,
specialty
shell egg
prices
typically do
not fluctuate
as much
as conventional
shell egg prices.
We
do not
sell eggs
directly to
consumers
or set the
prices at which eggs
are sold to
consumers.
Depending
on market
conditions,
input costs and
individualized
contract
terms, the
price we receive per dozen
eggs in any given
transaction
may
be more
than
or less than
our production
cost per dozen
.
9
Feed Costs
for Shell
Egg Production
Feed
is a primary
cost component
in the
production
of shell
eggs.
We
routinely
fill our
feed
storage bins
during harvest
season
when prices
for feed ingredients
,
primarily
corn
and to a
lesser extent
soybean
meal, are generally
lower.
We
currently have
the
capacity
to store 242
thousand
tons of corn
and
soybean
meal, and
we replenish these stores
as needed
throughout
the year.
As
the quality and
composition
of feed is
a critical
factor
in
the nutritional value of shell eggs and health
of our chickens, we formulate
and produce
the
vast majority
of our own feed at our feed
mills located
near our production
plants. Our annual
feed requirements
for fiscal 2026
were 2.2 million
tons of
finished feed,
of which we manufactured
2.1 million tons.
To ensure
continued
availability
of feed ingredients
,
we may
enter into contracts
for future purchases
of corn and
soybean
meal,
and
as part
of these
contracts,
we may
lock-in the
basis portion
of our
grain purchases
several
months
in advance
.
Basis is the
difference
between
the
local
cash
price
for
grain
and
the applicable
futures
price.
The
difference
can
be
due to
transportation
costs, storage
costs, supply
and demand,
local conditions and other factors.
A basis contract
is a common transaction
in
the grain
market
that
allows
us
to
lock-in
a
basis
level
for
a
specific
delivery
period
and
wait
to
set
the
futures
price
at
a
later
date.
Furthermore,
due to the
more limited
supply for
organic ingredients,
we may
commit to purchase
organic ingredients
in advance
to help ensure
supply.
Ordinarily,
we do
not enter
into long-term
contracts
beyond
a year
to purchase corn
and soybean
meal or
hedge against
increases in the
prices
of corn
and
soybean
meal.
Our primary
feed ingredients,
corn and
soybean
meal, are commodities
that are subject
to volatile
price changes
due to
weather,
various
supply
and
demand
factors, transportation
and
storage costs,
speculators,
and
agricultural,
energy
and
trade
policies in
the U.S.
and internationally,
and global instability
that could
disrupt the supply
chain.
We
purchase
the vast majority
of our corn
and soybean
meal
from
U.S sources but
may
be forced
to purchase
internationally
when U.S. supplies
are not readily
available.
Feed
grains
are
currently
available
from
an
adequate
number
of
sources
in
the
U.S. As
a
point
of
reference,
a
multi-year
comparison
of the
average
of daily
closing
prices per
Chicago
Board
of Trade
for each
quarter
in our fiscal
years 202
2-2026 is
shown below
for corn and
soybean
meal:
10
Shell Egg
Production
Our percentage
of dozens
produced
to sold
was 92.1
%
of our
total shell
eggs sold in
fiscal 2026.
We
supplement
our production
through purchases
of eggs from other
s
when needed
.
The quantity
of eggs purchased will vary based
on many
factors such as our
own production
capabilities
and current
market
conditions.
In fiscal 2026, 90.0
%
of our
production
came
from Company
-owned
facilities,
and
10.0%
came
from
contract
producers.
The
majority
of
our
contract
production
is
with
family
-owned
farms
for
organic,
pasture
-raised and free-range
eggs. Under
a typical
arrangement
with a contract
producer, we
own
the flock,
furnish all
feed
and
critical supplies,
own
the shell
eggs produced
and
assume
market
risks. The contract
producers
own and
operate
their
facilities and
are paid
a fee
based
on production
with incentives for performance.
The commercial
production
of shell eggs
requires
a source
of baby
chicks for laying
flock replacement.
We
supply the
majority
of
our
chicks
from
our
breeder
farms
and
hatch
them
in
our
hatcheries
in
a computer
-controlled
environment
and
obtain
the
balance
from commercial
sources.
The chicks
are grown
in our own
pullet farms
and are
placed
into the
laying flock
once they
reach
maturity.
After eggs are produced, they
are cleaned, graded and
packaged. Substantially all our farms have
modern “in-line”
facilities which
mechanically
gather,
clean,
grade
and
package
the
eggs
at
the
location
where
they
are
laid.
The
in-line
facilities
generate
significant
efficiencies
and
cost savings
compared
to
the
cost
of
eggs produced
from
non-in-line facilities, which
are
facilities
that process
their
eggs that
have been
laid at
one location
and transported
to a separate
processing
facility.
The
in-line facilities
also produce
a higher
percentage
of USDA Grade
A eggs, which
generally
sell at higher
prices, compared
to eggs that
are either
not graded or lower grade
.
Eggs produced on farms
owned by contract
producers are brought to our processing plants to be graded
and
packaged.
We
maintain
a
Safe
Quality
Food
(“SQF”)
Management
Program
which
is
overseen
by
our
Food
Safety
Department
and
senior management
team.
As of
May
30,
2026,
every
Company
-owned
processing plant
was
SQF certified.
Because
shell eggs are perishable,
we do
not maintain
large egg inventories.
Our egg inventory
average
d
six days of sales
during
fiscal
2026.
We
believe
our
constant
focus
on
production
efficiencies
and
automation
throughout
our
vertically
integrated
operations
enable
us to be a
low-cost supplier in our markets.
We
are
proud
to
have
created,
implemented
and
maintained
what
we
believe
is
a
leading
poultry
Animal
Welfare
Program
(“AWP”).
We
have
aligned
our
AWP
with
regulatory,
veterinary
and
certain
third-party
certifying bodies’
guidance
to govern
the welfare
of animals
in our direct
care
and our
contract
farmers’ care.
We
continually
review
our AWP
to monitor
and evolve
standards
that guide how we hatch
chicks, rear pullets and
nurture breeder and
layer hens. At each stage of
our animals’
lives, we
are dedicated
to providing welfare
conditions
aligned to our
commitment
to the principles of
the internationally
recognized
Five
Freedoms
of Animal
Welfare
.
We
do not
use
artificial
hormones
in the
production
of
our
eggs.
Hormone
use in
the poultry
and
egg production
industry
has
been
effectively
banned
in
the
U.S.
since
the
1950s.
We
have
an
extensive
written
protocol
that
allows
the
use
of
medically
important
antibiotics
only when animal
health is
at risk,
consistent
with guidance
from the
U. S.
Food and
Drug Administration
(“FDA”)
and the Guidance
for Judicious
Therapeutic
Use of
Antimicrobials
in Poultry,
developed
by the American
Association
of
Avian
Pathologists.
When
antibiotics
are
medically
necessary,
a
licensed
veterinary
doctor
will
approve
and
administer
approved
doses for
a restricted
period. We do
not use
antibiotics
for growth promotion
or performance
enhancement.
Specialty Shell
Eggs
We
are one of the largest producers
and marketers
of specialty
shell eggs in the
U.S.,
which continues to
be a significant
segment
of
the
market.
Specialty
shell
eggs
are
intended
to
meet
the demands
of consumers
sensitive
to
environmental,
health
and/or
animal
welfare issues and,
as applicable,
to comply
with state
requirements
for cage
-free eggs.
Ten
states
in
the
U.S.
have
passed
legislation
or
regulations
mandating
minimum
space
or
cage-free
requirements
for
egg
production
or mandated
the sale of only cage-free eggs
and egg products in their states, with implementation
of these laws ranging
from
January
2022
to January
2030,
representing
approximately
27% of
the total
U.S.
population
according
to
the
2020
U.S.
Census.
California,
Massachusetts,
Colorado,
Michigan,
Oregon,
Washington,
and
Nevada,
which
collectively
represent
approximately
23% of
the
total
U.S.
population,
have
cage-free legislation in effect.
A significant
number of
our customers
have announced
goals to either exclusively
offer
cage-free eggs
or significantly
increase
the volume of cage
-free egg sales in the future, subject in most cases to availability of supply,
affordability
and consumer
demand,
among
other
contingencies.
Our
customers’
sales
initiatives
and
product
mix
are
constantly
changing,
making
it
difficult
to
accurately
predict customer requirements
for cage-free eggs.
We are
focused on adjusting
our cage
-free production capacity
with
the goal of meeting the future
needs of our customers in light of changing
state requirements
and our customers’ goals. As always,
we strive
to offer
a product
mix that
aligns with
current
and anticipated
customer purchase
decisions. We
are engaging
with
our
11
customers to
help them meet
their announced
goals and needs. We have invested
significant
capital in recent years to
acquire and
construct cage
-free facilities, and
we
expect our focus
for future expansion
to continue to include cage
-free facilities. Our volume
of cage-free egg sales has continued
to increase and account
for a larger
share of our product mix. At the
same time, we understand
the
importance
of
our
continued
ability
to
produce
more
affordable
conventio
nal shell
eggs
to
provide
our
customers
with a
variety
of egg choices
and
to address
hunger in our communities.
Branded
Eggs
We
are a member of
the Eggland’s
Best, Inc. cooperative
(“EB”) and
produce, market,
distribute and
sell
Egg-Land’s
Best®
and
Land O’
Lakes®
branded
eggs under a
license from
EB at
our facilities
under EB
guidelines.
EB hens are
fed a proprietary
diet
and
offerings
include
nutritionally
enhanced,
cage-free, organic,
pasture
-raised and
free-range
eggs.
Land
O’ Lakes®
branded
eggs are
produced
by hens
that
are fed
a whole-grain vegetarian
diet and
include brown, organic
and
cage-free eggs.
In 2025,
EB was
the
third best
-selling dairy
brand
in the
U.S.
By
volume,
the top
two best-selling
branded
specialty
shell egg
SKUs
in 202
5
were
EB branded
eggs and six
out of 10
best-selling
SKUs were
EB branded
eggs. In
2025, our
sales
(including
sales from affiliates)
represented
approximately
56% of EB branded
eggs and 43% of
Land O’ Lakes®
branded
eggs nationwide.
Our
Farmhouse
Eggs
® branded eggs are produced
at our facilities by
hens that are provided
with a vegetarian
diet. Our offerings
of
Farmhouse
Eggs
® include cage-free, organic
and pasture
raised eggs. We
market
organic, vegetarian
and omega
-3 eggs
under
our
4Grain®
brand,
which consists
of conventional
and
cage-free eggs.
Our
Sunups®
and
Sunny Meadow®
brands
are sold as
conventional
shell eggs.
We
also produce,
market
and
distribute private
label specialty
and
conventional
shell eggs
to several
customers.
Prepared
Foods
Our prepared
foods offerin
gs include
pre-cooked egg
patties,
omelets, folded
and scrambled
egg formats
,
pancakes,
waffles and
specialty
wraps. This segment
includes
our brands
Van
’s®
and
Crepini®.
We
produce
the
vast
majority
of
our
prepared
foods
products
at
our
facilities. The
majority
of
the
raw materials
used
in
the
production
of our
prepared
foods products
are commodities,
agricultural
-based
products,
including
liquid
egg products,
as well
as
packaging
material.
Liquid
egg
products
are
sourced
from
outside
vendors
as
well
as
internally.
The
majority
of
our
raw
materials are sourced
from U.S. vendors and
are generally available
from numerous
vendors. We monitor
changes in
price of raw
materials
and
supply
chain
costs
and
may
be
required
to
implement
material
price
increases
or
decreases
in
response
to
any
significant
changes
in costs.
Marketing
and Distribution
In fiscal
2026, we
sold our
products
in 47
states
as well as
Puerto
Rico
through our
extensive
distribution
network
to a
diverse
group
of
customers,
including
national
and
regional
grocery
store
chains,
club
stores,
companies
servicing
independent
supermarkets
in the U.S., foodservice
distributors
and
egg product consumers.
The majority
of our shell egg and
prepared foods
sales are based
on the daily
or short-term needs of
our customers. Most
sales to
established accounts
are on payment
terms ranging from seven to 30 days. Although we
have established
long-term arrangements
with many
of our
customers,
most
of them
are free
to acquire
products
from
other sources.
The
products
we
sell
are
either
delivered
to
our
customers’
warehouse
or
retail
stores,
by
our
own
fleet
of,
or
contracted
refrigerated
delivery trucks,
or are picked
up by
our customers
at
our processing facilities.
We
distribute
and
sell
Egg-Land’s
Best®
and
Land O’
Lakes®
branded
eggs directly
and
through our
joint ventures,
Specialty
Eggs,
LLC
and
Southwest
Specialty
Eggs,
LLC,
under
exclusive
license
agreements
in
Alabama,
Arizona,
Florida,
Georgia,
Louisiana, Mississippi
and Texas,
and in portions of Arkansas,
California, Kansas,
Nevada,
North Carolina, Oklahoma
and South
Carolina.
We
also have
an exclusive license
in New
York
City in addition
to exclusivity
in select
New York
metropolitan
areas,
including areas
within New Jersey and Pennsylvania.
As
discussed above
under “Branded
Eggs,”
we also sell our own
Farmhouse
Eggs
®
4Grain
®,
Sunups®
and
Sunny Meadow®
branded
eggs. We
also
produce,
market
and
distribute private
label
specialty
and conventional
shell eggs
to several
customers.
Our
prepared foods
offerings
include
products sold
under our
brands
Van’s®
and
Crepini®
.
12
Customers
Our
top three
customers
accounted
for an
aggregate
of
43.1%, 49.2%
and
49.0%
of our
net sales
dollars
for
fiscal 2026,
2025,
and 2024,
respectively.
Our largest
customer,
Walmart
Inc. (including
Sam's Club),
accounted
for 30.0%,
33.6% and
34.0%
of
our consolidated
net sales
dollars for fiscal
2026,
2025
and
2024,
respectively.
Competition
The production,
processing,
and distribution
of shell
eggs is an
intensely
competitive
business,
which has
traditionally attracted
large numbers
of producers
in the
U.S.
Shell egg competition
is generally
based on
price,
service and
product quality.
The shell
egg
production
industry
remains
highly
fragmented.
According
to
Egg
Industry
Magazine
, the
ten
largest
producers
owned
approximately
57% and
54% of
industry table
egg layer hens at
calendar
year
-end 2025
and
2024, respectively
.
The
market
for
prepared
foods
is
highly
competitive
,
and
includes
national
and
regional
food
manufacturers,
private
label
producers, and
foodservice suppliers.
Competition
is based on a variety
of factors, including
product quality,
innovation,
service,
price,
manufacturing
capabilities,
supply
reliability,
and customer
relationships.
The Company
believes its
vertically
integrated
supply
chain,
access
to
shell
egg
inputs,
manufacturing
capabilities,
and
broad
customer
relationships
position
it
to
compete
effectively
in these markets.
Seasonality
Retail sales of
shell eggs historically
have been
highest during
the fall and winter
months
and lowest during
the summer
months.
Prices for
shell eggs
fluctuate
in response to
seasonal
demand
factors and
a natural
increase in
egg production
during the
spring
and early
summer.
Historically,
shell egg
prices tend
to increase
with the
start of the
school
year and
tend
to be highest
prior
to
holiday
periods,
particularly
Thanksgiving,
Christmas
and
Easter.
As
a
result,
we
have
historically
experienced,
and
may
experience
in the
future,
lower shell
egg selling
prices,
sales
volumes
and
shell egg
sales (and
have
incurred, and
may
incur in
the future, net
losses)
in our first
and fourth
fiscal quarters
ending in August/September
and May/June,
respectively.
Because
of
the
seasonal
and
quarterly
fluctuations,
comparisons
of our
net sales
and
operating
results
between
different
quarters
within
a
single fiscal year
are not
necessarily meaningful
comparisons.
Certain
of
our
prepared
foods
exhibit
modest
seasonality,
with
demand
generally
softening
during
the
summer
months,
particularly
in
school
-related foodservice
channels.
Overall,
demand
remains
relatively stable
given the
portfolio’s
broad
retail
and
foodservice
applications.
Trademarks
and License
Agreements
The
table below
shows the
trademarks
that we owned
or licensed
pursuant
to license
agreements
at
May 30,
2026,
as allocated
within our
reportable
segments. We
believe these
trademarks
and
license agreements
are important
to our business.
Reportable
Segment
Trademark
Conventional
Shell Eggs
Sunups® and Sunny Meadow®
Specialty
Shell Eggs
Farmhouse
Eggs®,
4Grain®, Egg
-Land's Best®
and Land
O'
Lakes®
Prepared
Foods
Van's®
and Crepini®
Government
Regulation
Our facilities
and operations
are subject
to regulation
by various
federal,
state,
and local
agencies,
including,
but not limited
to,
the
FDA,
USDA,
Environmental
Protection
Agency
(“EPA”),
Occupational
Safety
and
Health
Administration
(“OSHA”)
and
corresponding
state agencies.
The applicable
regulations relate
to grading,
quality
control, labeling,
sanitary
control and reuse or
disposal
of
waste.
Our
shell
egg
facilities
are
subject
to
periodic
USDA,
FDA,
EPA
and
OSHA
inspections.
Our
shell
egg
production
and feed
mill
facilities as well as our prepared foods
operations
are subject to FDA,
USDA, EPA
and OSHA regulation
and inspections,
as applicable.
We maintain
inspection programs
and in certain cases
utilize independent
third-party
certification
bodies
to
monitor
compliance
with
regulations,
our
own
standards
and
customer
specifications.
It
is possible
that
we will
be
required
to
incur
significant
costs
for
compliance
with
such
statutes
and
regulations.
In
the
future,
additional
rules
could
be
proposed
that, if adopted,
could increase
our costs.
Further,
the marketing,
labeling and
advertising
of our products
are subject
to extensive
regulation under
federal,
state and
local
laws, including
consumer protection
laws. Changes
in legal or
regulatory requirements,
including with respect
to nutrition
facts,
13
allergen
disclosures,
serving
size
standards,
front
-of-pack
labeling, ingredient
or packaging
restrictions,
or marketing
practices,
or differing
or evolving enforcement
priorities, may
increase our compliance
costs or require changes
to our products,
packaging
or marketing
practices.
A number of states have
passed legislation or
regulations mandating
minimum space
or cage-free requirements for egg production
or have
mandated
the sale
of only
cage-free eggs
and
egg products
in their
states.
For further
information
refer to
the heading
“Specialty
Shell Eggs”
within this
section.
In addition,
federal
antitrust
laws require
regulatory approval
of acquisitions
that
exceed
certain
threshold
levels of significance
or that
could otherwise
harm
competition,
and
we cannot
guarantee
that such
approvals
would be
obtained.
Further, current
or
future federal
antitrust regulations
may
adversely affect
current operations
or financial
condition
such as
required divestitures or
spin-offs of
certain
business or assets
and
limitations on
the types
or amounts
of products
we could produce.
For more
information
regarding government
regulations that
may
affect
our business, refer to
Part I. Item 1A. Risk Factors
.
Environmental
Regulation
Our operations
and facilities
are subject to
various federal,
state, and
local environmental,
health and
safety
laws and regulations
governing,
among
other
things,
the
generation,
storage,
handling,
use,
transportation,
disposal,
and
remediation
of
hazardous
materials. Under
these laws and
regulations, we must obtain
permits from governmental
authorities, including,
but not limited
to,
wastewater
discharge permits.
We
have made,
and will
continue to
make,
capital
and other
expenditures relating
to compliance
with
existing
environmental,
health
and
safety
laws
and
regulations
and
permits.
We
are
not
currently
aware
of
any
material
capital expenditures
necessary to
comply with
such laws
and regulations;
however,
as environmental,
health and
safety
laws and
regulations
are becoming
increasingly
more stringent,
including
those relating
to animal
wastes and
wastewater discharges,
it
is
possible that
we will have to
incur significant costs
for compliance
with such laws and
regulations in the
future.
Human Capital
Resources
As
of
May
30,
2026,
we
had 4,909
employees,
of
whom
4,292 worked
in
operations
and
marketing,
and 617,
including
our
executive
officers, were
administrative
employees. Approximately
3.0% of
our
personnel
are part
-time. We
also use
temporary
employment
agencies
and
independent
contractors
to supplement
our
workforce
when
needed;
for
fiscal
2026,
we
had
1,943
average
monthly
contingent workers.
As of May 30, 2026, 40 employees
were covered
by a collective bargaining
agreement.
We
believe our
employee
relations are
good.
Our ability
to operate
safely,
efficiently
and in
compliance
with
applicable
food,
workplace
safety
and employment
regulations
depends
on attracting,
retaining,
training and
developing
employees
across our
operations,
sales,
marketing
and
administrative
functions. We
focus our human
capital efforts on workplace
health and safety,
employee relations, competitive
compensation
and
benefits,
compliance
training, operational
training and
leadership development.
Health and Safety
The health
and safety
of our employees
is a priority.
Our Safety
and Health
Program is designed
to promote safe
work practices,
reduce workplace accidents
and illnesses, and support compliance
with
applicable
Occupational
Safety and Health Administration
requirements.
The
program applies
across the
Company
and is supported by an
enterprise
safety
committee
and site-level safety
committees
with employee
representation.
We
review our written
safety
policies at least annually
and monitor
safety
performance
on a monthly basis to identify
trends and
opportunities for improvement.
We also provide
multi-lingual
safety
and compliance
training on topics relevant to our operations,
including use of personal
protective equipment,
emergency response,
equipment
safety,
chemical hazard communication,
hearing
conservation,
lockout/tagout
procedures, forklift
safety
and other job
-specific safety
practices. Contractors
and vendors
working
at
our facilities are expected
to comply
with applicable
safety
requirements.
14
Employee Culture and Conduct
We
seek to maintain
a workplace culture grounded
in integrity,
respect, productivity
and ethical conduct.
Our
Code of Ethics and
Business Conduct
,
Human
Rights
Statement
and other
employee policies
support our
commitment
to lawful and ethical
conduct
and
to a
workplace
free from
harassment,
discrimination,
unlawful
conduct
and
retaliation.
We
are
an
Equal
Opportunity
Employer
and
prohibit discrimination
on any
basis protected
by applicable
federal,
state
or local
law.
We
are
committed
to providing
employees
with
opportunities
consistent
with
our
operational
needs and
their experience,
goals and
contributions.
Compensation,
Benefits,
Training
and Development
We
seek to attract,
retain and develop
employees by
offering
competitive
wages and
benefits and
by providing training
relevant
to safety,
regulatory compliance,
job-specific skills
and
leadership development.
We offer
eligible full-time
employees
a range
of
health,
welfare
and
retirement
benefits,
including
participation
in
our
KSOP
retirement
plan,
under
which
the
Company
contributes
shares of
Company
stock or a
cash
equivalent
equal
to 3%
of eligible
compensation
for each
pay
period
in which
hours are
worked.
We
also support
employee
development
through safety,
compliance
and task
-specific training, as
well
as our
Management
Intern,
Management
Trainee
and
informal
mentoring programs.
Sustainability
We
understand
that responsible management
of our flocks, among other things, is vital to the
production
of high-quality eggs and
egg
products
and to
the success
of
the
Company.
We
have
engaged
in
agricultural
production
for
more
than
60
years.
Our
agricultural
practices
continue
to
evolve
as
we continue
to
strive
to meet
the
need
for nutritious,
affordable
foods to
feed
a
growing
population
while
still
exercising
responsible
natural
resource
stewardship
and
conservation.
We
will
publish
our
sustainability
impact
report
for
our
fiscal
2025
in
the
first
quarter
of
fiscal
2027,
which
will
be
available
on
our
website.
Information
contained
on our website is not
a part
of this report
on Form 10
-K.
Our Corporate
Information
We
maintain
a
website
at
www.calmainefoods.com
where
general
information
about
our
business
and
corporate
governance
matters
is available.
The information
contained
on our website
is not
a part
of this
report.
Our Annual
Reports on
Form
10-K,
Quarterly
Reports on
Form 10-Q,
Current Reports
on Form 8-K,
proxy
statements,
and all amendments
to those reports
filed or
furnished
pursuant
to Section
13(a) or
15(d)
of the
Exchange
Act
are
available,
free of
charge,
through our
website
as soon
as
reasonably
practicable
after
we
file
them
with,
or
furnish
them
to,
the
SEC.
In
addition,
the
SEC
maintains
a
website
at
www.sec.gov
that
contains
reports,
proxy
and
information
statements,
and
other
information
regarding
issuers
that
file
electronically
with the
SEC.