Perhaps chicken is soon to become cheep (pun). There is in fact a glut of eggs; methinks due to the strong dollar which equals poor exports.
Over the past six weeks, egg prices have averaged 43¢/dozen. When were they last so low? Never...or at least never in the ten years that my records go back. It gets uglier; they were 38¢ for three of the past four weeks, before popping all the way up to 50¢ this week. For further context, the next lowest price in my records was 60¢ in June of 2009. These are prices for large eggs, which is where most of the action is. Medium eggs were 28¢/dozen. I doubt that that'll pay for the ink on the carton.
Here, let's interject the average egg price for CALM Q4, to be reported some time in July:
in 2015, March through May, the average price was $1.48
in 2016, March through May, the average price was 69¢
Can you say "ouch?"
What does this mean for CALM profits? It's really hard to say since CALM has been building the value-added business of cage free and Egg-lands. It should allow us to get a pretty clear picture of just how dynamic the value added portion on the business has become. If CALM can pull off a profit in this environment, they will have clearly left the commodity side of the business behind. I personally don't think that is likely, but hey, you never know.
On a brighter note, it's possible that CALM can pick up some new business from Costco, which stands behind their assertion that Hillandale brand eggs are good. If you haven't seen the latest undercover video of conditions at a Hillandale farm, check it out. Gross. Hillandale is owned by Jack DeCoster, who could reasonably be characterized as an "egg-criminal," having been previously convicted of same. He says he has nothing to do with Hillandale, but that's what we'd expect an egg-criminal to say. Costco should leave them like a Ukrainian mail order bridegroom. I think CALM is the only outfit who might be able to manage Costco demands.
All y'all enjoy the fruits of the situation, while it lasts! [more]