Cal-Maine ceases operations at Texas facility after bird flu detected

A Cal-Maine Foods facility in Parmer County, Texas, has temporarily ceased operations after highly pathogenic avian influenza was detected on the premises, the company said Tuesday.

After some of its chickens tested positive for the virus, Cal-Maine, the nation’s largest egg producer, depopulated approximately 1.6 million laying hens and 337,000 pullets, or approximately 3.6% of the Company’s total flock as of March 2.

Cal-Maine is working to increase production at other locations to minimize disruption to its customers.

“This is absolutely devastating news for Cal-Maine and the entire Panhandle region which has already suffered so much already,” Texas Agriculture Commissioner Sid Miller said in a statement. “Given this latest development, all producers must practice heightened biosecurity measures. The rapid spread of this virus means we must act quickly.”

The detection at Cal-Maine comes as a peculiar strain of avian influenza starts to affect herds of dairy cows in Texas, Kansas, Michigan and other parts of the country. There is no risk of the virus being harmful to the country’s milk supply, federal officials said. However, a person tested positive for bird flu after presumed contact with infected cattle in Texas, health officials confirmed Monday.

“The current risk to the public remains minimal,” Miller said. “It is important for us as an industry to maintain a high level of vigilance. State and national agencies will continue to provide updated guidance as developments warrant.”

This is not the first time Cal-Maine has paused production due to bird flu. During the third quarter ending March 2, the company reported an outbreak within its facilities in Kansas, resulting in the depopulation of 1.5 million laying hens and 240,000 pullets.

“Like other producers, we have navigated significant challenges related to [avian influenza], and we remain diligent in our efforts to mitigate any future risks,” Sherman Miller, president and CEO of Cal-Maine, said in a statement. 

The risk of the virus spreading to humans through contaminated eggs is low.

YOY sales decline but egg demand boosts earnings

On Tuesday, Cal-Maine reported net sales of $703 million during the third quarter, down 30% from the previous year, citing a “significant decrease” in egg prices. A year ago, prices were historically high for eggs due to problems related to avian influenza. Once again, seasonal and market forces are driving prices higher as bird flu continues to affect commercial operations.

Net income for the latest quarter was $146.7 million compared to a record $323.2 million last year. As profits leveled out, Cal-Maine’s sales volumes increased 3% from last year’s corresponding quarter.  

At the end of the quarter, Cal-Maine closed its acquisition of a former Tyson Foods facility in Dexter, Missouri. The company plans to repurpose the acquired assets for eggs and egg production.

“We remain focused on identifying other acquisition opportunities that complement our operating model and further extend our market reach,” Miller said.