Mississippi’s Cal-Maine Foods — A Pillar of Egg-celence

Jackson-based CALM is America's largest fresh-egg producer


Fred Adams Jr. helped to create Cal-Maine Foods (NASDAQ:CALM) back in 1969, and as the company’s first CEO he helped Cal-Maine become the largest fresh-egg producer in the country.

Cal-Maine is headquartered in Jackson, Miss., and employs about 2,000 people — of these, roughly 1,800 work in egg production, processing and marketing.

In fiscal 2011, Cal-Maine sold 821.4 million dozen shell eggs — accounting for 18% of the market. In all, the company has a flock of roughly 26.8 million layers (mature chickens) and 6.7 million pullets (young chickens).

To boost margins, Cal-Maine has moved into the specialty shell egg market, with brands like Egg-Land’s Best, Farmhouse and 4-Grain. These have improved nutrition (such as omega-3’s) and involve chickens that are cage free. No doubt, the specialty segment is growing at a nice clip. In all, it has helped Cal-Maine bring in around $940 million in revenues annually.

Cal-Maine has a diverse set of customers, such as grocery stores and club stores. These include biggies like Publix Super Markets and Wal-Mart (NYSE:WMT).

A key to Cal-Maine’s growth has been its aggressive acquisitions strategy. Since 1989, the company has pulled off 16 deals, but the market remains highly fragmented, so Cal-Maine should have plenty more opportunities to snatch up other egg operators across the country.

As for Adams — he remained CEO until late 2010, when son-in-law Adolphus B. Baker took the helm; Adams now is the chairman of the board.

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Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, http://investorplace.com/real-america-index/mississippi-cal-maine-foods-calm-a-pillar-of-egg-celence/.

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