Corn and soybean costs have affected Cal-Maine’s profits in the third quarter of its financial year, the US egg processor said.
The company today (26 March) reported a 22.4% fall in net income to US$26.1m in the 13 weeks to 25 February.
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Cal-Maine said its net income in the third quarter of the preceding year had been helped by proceeds for its stake in co-op Eggland’s Best.
However, high feed costs still meant profits were lower year-on-year even without that one-off gain in the results.
Operating income was down 10.3% at $34.9m despite a 10.6% increase in net sales to $303.7m. President and CEO Dolph Baker said higher prices and “good retail demand” for shell eggs had boosted sales.
He added: “Our feed costs have continued to affect our production costs in fiscal 2012. For the third quarter, feed costs were up 4.5 cents per dozen, or 11.1%, compared with the third quarter of fiscal 2011. We expect feed costs will remain very high and volatile throughout the summer of calendar 2012 due to tight supplies of corn and soybeans, our primary feed ingredients.
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By GlobalData“However, all of Cal-Maine Foods’ operations have continued to run well and our management team is focused on managing the aspects of our business we can control and improving efficiencies where possible. We believe we are well positioned for another successful year for Cal-Maine Foods with a proven management team, efficient operations and a strong balance sheet to support our growth strategy.”
The third-quarter results led to a 2% fall in net income to $53.6m for the first nine months of its fiscal year. Operating income was higher, up 9.7% at $76.6m. Net sales increased 19.8% to $837.9m.
