Dive Brief
Cal-Maine Foods is seeing early indications that U.S. conventional egg supply and demand may be moving back toward balance, although the company cannot yet say when the oversupply that has pressured wholesale prices will come to an end.
President and CEO Sherman Miller highlighted the developments during the company’s Sept. 30 earnings call. Among the signals are stronger demand, a larger-than-expected reduction in the U.S. layer flock, fewer chicks being hatched from breeder eggs and a modest decline in estimated monthly egg-case production, based on industry reports.
“These indicators do not establish that the market will turn, but they provide important context on the potential direction of supply,” Miller told investors during the Q1 FY2027 call.
Dive Insight
The current surplus marks a sharp reversal from conditions a year earlier, when an avian influenza outbreak killed more than 145 million birds in the United States. The resulting egg shortage sent prices sharply higher. Since then, increased production has created an oversupply that has pushed prices lower and weighed on Cal-Maine’s earnings.
The impact was particularly visible in the company’s latest results. Conventional shell egg sales dropped 59.5% year over year to $201.7 million during the first quarter, Cal-Maine reported.
The American Egg Board, an industry-funded organization, attributes the surplus to elevated flock numbers, strong hen productivity and exports that have not been sufficient to absorb the additional production. However, Miller pointed to several figures in the AEB’s September report as evidence that the market may be beginning to rebalance.
The AEB estimated the U.S. layer-hen flock at between 336 million and 343 million birds, approximately 4 million fewer than previous estimates. At the same time, hatchings from breeder eggs were down 12% year to date. Monthly egg-case production over the previous three months also edged lower, reaching 19.9 million cases compared with the figure reported previously.
Demand, meanwhile, has remained relatively resilient.
Cal-Maine has detected no “structural weakness in egg demand,” Miller said, adding that the data remains constructive across retail, food service and exports.
According to NielsenIQ data cited by Miller, U.S. retail egg volume increased by about 4% between January and August compared with the same period a year earlier. Sales during the four weeks ending Aug. 29 were also slightly higher, while the average price per dozen declined by approximately 27%.
Miller said the combination of improved affordability and increased promotional activity could help sustain consumption as the market enters the seasonally stronger fall baking and holiday periods.
