Cal-Maine shares drop after DOJ launches egg price probe

Rising egg prices prompted an antitrust investigation by the Department of Justice into America’s largest egg producer, Cal-Maine Foods, the company disclosed this week.

Its shares fell over 4% in after-hours trading on Tuesday.

The company, which supplies about 20% of US eggs, said it received notice last month and is cooperating.

Egg prices have soared in the past few months due to the US bird flu epidemic killing over 166 million egg-laying chickens. A dozen eggs averaged $5.90 in February, up 10.4% from last year. In some supermarkets, they cost nearly $7 in January.

Despite record sales of 331.4 million dozen eggs and tripled net income of $508.5 million in the third quarter, Cal-Maine missed Wall Street’s expectations. 

The company said its Q3 sales rose to $1.42 billion as average egg prices doubled to $4.06 per dozen. However, it fell short of the $1.43 billion forecast.

Cal-Maine is attempting to recover from the bird flu impacts by boosting hen and chick numbers and lowering feed costs.