Eggsperts

Sup, mother fucks, it's Gabe Azar, Managing Director and Head of Burrito rolling of the infamous Azar Capital Group. Your grandma's favorite investor. Currently writing to you nerds from my L desk. Today I am writing about Cal-Main Foods. Now sit back, you greasy bastards, and enjoy. And remember, buy low and sell high, my friends.

Cal-Maine Foods (Cal) is the king of eggs; the company is the LARGEST egg producer in the United States, controlling 17% of the entire egg market. That is about one out of every six eggs coming from Cal. Cal owns their entire supply chain: the hens, the feed, the processing, and the delivery to the local grocery store. As of their most recent report, the company stated they operate almost 50 million hens, 11.4 million pullets, and breeders across the nation. The company's core strategy revolves around three pillars: expanding specialty eggs, growing prepared foods, and disciplined M&A moves to expand reach. 

In Cal's most recent quarterly earnings report, they generated $769.5 million in total revenue. This is down nearly 20% YoY. Shelled eggs generated 84.4% of revenue, but were down from 94% from last year. Conventional eggs brought in $363.9 million, but that's down nearly 41% YoY as egg prices collapsed. Specialty eggs revenue held up despite last year's panic buying, as they represent 44% of total shell egg sales. Prepared foods saw a massive increase in revenue thanks to the Echo Lake Foods acquisition. Conventional eggs are still the biggest piece of the revenue pie, but are shrinking as the business expands into specialty and prepared products. 

Several key catalysts include the specialty egg movement, preparted foods expansion, hybrid pricing, Cal’s strong balance sheet, and Cal’s large investments in biosecurity. In their most recent report, Cal ended the quarter with $1.14 billion in cash and short term investi’s with basically zero debt. This can enable them to take lots of shots on goal in the acquisition game and continue to return capital to shareholders. Cal is also investing capital to increase prepared food capacity. Including a $15 million investment to expand its scrambled egg line and $14 million to build out its pancake product line. Ten states have passed cage-free legislation, which represents 27% of the U.S population. Cal-Maine is well positioned to capture this demand as it operates cage-free, organic, brown, free-range, and pasture-raised facilities, enabling it to secure continued revenue growth. 

Just like every business, Cal faces serious risks related to egg prices, safety and health standards, prepared food execution, feed cost, and potential legal battles. Prices of eggs in the past two years have been extremely volatile, with the USDA reporting 302 million hens as of December 2025, which is down from 312 million the year prior. Despite this supply has stabilized and demand cooled after last year's shenanigans. Retailers have rebuilt inventories, enabling wholesaler pricing to return to normal. HPAI risks are real, despite Cal investing heavily into biosecutiy no farm is immune to viruses. Risks related to prepared foods are also big as Echo Lakes Foods is undergoing a massive remodel and facilities expansion; any extended delay in integrating updates could significantly impact growth. Cal is currently facing EIGHT federal antitrust lawsuits alleging price manipulation and coordination during the 2022 HPAI outbreak. The lawsuits are extremely pricey; even if they win the lawsuits, they still will have spent tons of capital on legal bills. 

The egg industry is more complicated than it seems; the business is shaped by biology, weather, regulations, diseases, and consumer psychology. The sector produces around 100 billion eggs ennaully which generates $15-20 billion at thefarm-level revenue, depending on where prices are. People will always need eggs; it is basically an essential food category and has never faced a meaningful demand event in history. Despite decades of consolidation, Cal is the king of eggs with 17%, while the remaining percent of the market is split between hundreds of small regional players and producers. Smaller players face significant competition because they lack the capital to invest in biosecurity, capacity, and the ability to absorb losses and negotiate with large retail chains. 

The egg business is split into three tiers that are almost three separate businesses. The conventional egg market accounts for the majority of the eggs sold. Prices are set by the market and tracked through the Urner Barry Egg Index, which is based on good old supply and demand. The margin profile on these eggs is slim, but demand is high. The next tier is speciality eggs, which includes cage free, organic, free-range, and brown eggs. These eggs usually cost more than traditional eggs, and when conventional eggs spike in price, specialty eggs' prices remain calm. Many states have also passed legislation, and food service operators have made commitments to transition their egg programs towards cage-free heavy formats. Then the third tier is egg-based products, prepared foods like liquid eggs, frozen eggs, dried eggs, and fully prepared items. This segment serves food manufacturers, restaurant chains, institutions, and convenience store formats. 

One of the largest and most powerful macro tailwinds for the egg industry is the booming demand for protein. Eggs are at the center of this, as they are affordable, nutritious, and contain all the essential amino acids. No other sources of protein can compete with eggs in terms of the value per dollar that eggs provide. When steak, chicken, pork, and plant-based sources fail to satisfy or increase in price, customers flock back to eggs. Another tailwind is the GLP-1 wave with drugs like Ozempic and Wegovy suppressing appetite. During this, users tend to gravitate to high-protein and high-satiety foods, in which eggs tick all the boxes. If millions of Americans end up taking these drugs, as well as non-drug users, the demand for premium egg products could see a massive increase. 

Demographics are also working in the egg industry's favor, with basically every age group enjoying a good egg. Younger consumers are gravitating towards pasture-raised and organic eggs, as well as putting major thought into products with clean labels, transparency, and health-conscious products. They are also increasingly cooking at home for health and economic reasons. At the same time, older customers are being advised by professionals to prioritize protein to preserve muscle mass, with eggs being a key recommendation source. 

The regulatory landscape is also heating up, which hurts small producers as they can’t keep up with continuous regulations and health code standards. This favors Cal and other larger players who can afford to invest in these items. Ten states have passed cage-free legislation, with more states likely to follow. Any following states that follows these legislations would place more pressure on the small players. With increased regulation likely leading to more consolidation rather than more competition. Tariffs add another small layer of complexity to the egg game. Although the egg industry is largely focused within the US, feed ingredients like corn and soybeans are deeply tied to global commodity markets. This is another win for the larger players as they can buy with scale and create vertical feed production within their own supply chains. 

Biosecurity technology has become one of the most important competitive moats in the egg industry. HPAI is an airborne pathogen that spreads through contact with wild birds, contaminated gear, and human movement between facilities. Cal has invested almost $100 million in biosecurity since 2015, with every dollar being invested widening the company's moat. Air filtration systems, foot baths, dedicated protective clothing, traffic control protocols, and real-time monitoring of bird health are all a part of this biosecurity infrastructure. Automation and precision agriculture are also transforming egg products in ways that favor guess who. The large-scale operators are, as usual. Modern facilities are highly automated through egg collection, feeding systems, climate control systems, and real-time health monitoring. While these systems require significant upfront capital, they reduce labor requirements and improve yield. 

Data analytics and supply chain technology are becoming increasingly important in the egg business as regulations and demand change. Cal sells their eggs to national retail chains with sophisticated inventory systems, and it expects suppliers to integrate their data into these inventory systems. As per usual, this is another double u for the big players as they can afford to invest in demand prediction, optimizing flock cycling, and managing seasonal productional shifts tools. Companies are also investing in lab-grown egg proteins, plant-based egg substitutes, and fermentation-derived egg components. While these are real projects, they face a challenge as they cannot match the nutritional complexity, cost structure, and functional versatility that real eggs offer. 

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Cal-Maine is basically in a league of its own, with 17% market share of the entire egg market. The next largest producers are Rose Acre Farms, Versova, Hillsandale Farms, and Daybreak Farms, all of which are privately held, but estimates suggest they control 3-6% each. This gap is enormous compared to other industries, and it will compound over time as Cal-Maine takes advantage of its based balance sheet and infrastructure. Rose Acre Farms is still a family-owned business based in Indiana and has been around since 1939. While they are large and well-run, they are not able to access the capital that Cal-Maine can. While the private players are safe from all the nonsense of being a publicly traded company, like quarterly earnings and whatnot, that also means they are more capital restrictive. This makes it harder for them to deploy capital in biosecurity, cage-free, and prepared foods expansion. 

Cal-Maine has almost 50 million hens spread across the states. This is something that smaller regional players cannot replicate overnight. This is a major competitive advantage to gain business with the large retailers, as they want partners who can guarantee a consistent supply across all their distribution sites. Another durable advantage is Cal’s balance sheet, as it enables Cal to invest in biosecurity, supply chain improvements, and potential acquisitions. Cal’s ability to invest in its biosecurity is a massive advantage because, as soon as a flock tests positive, the entire facility must be taken out immediately, whether they are infected or not. Regrowing this flock may take 12-22 weeks to reach egg-laying maturity, which is potentially a business-ending catastrophe for smaller players. 

Scale is another obvious cost advantage for Cal-Maine. Feed represents about 50% of the total cost in producing eggs; the ability to purchase corn and soybeans at a massive scale enables Cal to secure favorable contracts. Cal has also recently acquired feed mills, unlocking serious vertical integration power into its feed production. Not only does this save capital, but enables them to control supply and product quality. Cal-Maine’s product portfolio is also an underappreciated part of its moat. Cal sells eggs under some of the most recognizable names in the game, like Farmhouse Eggs, 4Grain, Sunups, Sunny Meadow, MeadowCreek Foods, Egg-Lands Best, and Land O’Lakes Eggs. Eggland's Best dominates the premium egg market in the United States, with strong consumer awareness and loyalty. Competitors who lack established brands are basically locked out of the specialty and premium segment, where the margins are the highest. 

Cal’s vertically integrated supply chain is another one of its major moats, as it owns and operate their laying flocks, feed mills, processing mills, and owns its trucking fleet. This gives Cal-Maine full control over its supply chain; they don’t rely on outsider contracts, which may prioritize other customers or face supply disruptions that smaller players may be exposed to. This is a major advantage for Cal compared to smaller companies that don’t have the capital to invest in their supply chains and outsource many of these parts to third-party providers. Cal-Maine has also been shifting a portion of its conventional egg volume towards a hybrid pricing model that blends the cost of production with market indices. Currently, a majority of Cal-Maine's specialty eggs are already being priced through cost-plus frameworks. 

Building a competitive egg business from scratch is not as easy as it seems. Modern cage-free facilities capable of housing one million hens cost between $30-50 million to construct the entire infrastructure around them. Cal-Maine operates facilities that house tens of millions of hens across the Nation. Replicating this would require billions of dollars in capex for construction, regulatory approvals, and the years that it would take to build up a supply of hens that can compete with Cal. That doesn’t even include building out a supply chain, flock management systems, customer relations, and biosecurity infrastructure. Cage-free facilities also require more expensive safety regulations under the FDA's egg safety rule that cover production, storage, and handling requirements. Cal-Maine can easily eat these costs, but new entrants or smaller players would have to bet the house to build out compliance infrastructure with little to no existing revenue to fund it. 

Customer relations are also big; major grocery stores aren’t just buying eggs but building a supply around a specific egg supplier. This includes them integrating their inventory management systems, negotiating private label packaging, and promotional programs that may take years to develop. When a retailer builds its infrastructure around Cal-Maine eggs, the switching costs become yuge, not just in dollar terms but in operational complexity and supply risk. Cal-Maine has relationships with some of the largest national grocery chains in the game. Egg-laying hens don’t appear overnight; breeder flocks produce fertile eggs, which then hatch into pullets. This process can take up to 22 weeks for them to mature into value-added hens. Cal recently reported that its total chicks hatched are up 65%, and breeder flocks are up 13% YoY. This expands their breeder infrastructure and builds a stronger moat, enabling the company to recover from any HPAI losses quickly. 

Cal’s recently reported quarterly revenue of $769.5 million, down from $954.7 million in the year prior. This decline is due to the price of eggs being extremely volatile over the past two years. This is not normal because the market saw tons of panic buying and HPAI-driven supply shortages. Shell eggs still dominate total egg sales, though speciality egg sales are rising along with prepared foods. Cal reported a quarterly profit of $207 million, representing gross margins of 27%, which is down from $365 million gross profit and 37% gross margins from the prior year quarter. Farm production costs per dozen eggs also saw a slight increase due to higher labor and facility costs, even as feed costs saw a decline. Net income also took a hit compared to the year prior, primarily due to the spike in egg costs that happened in mid 2025. 

Cal-Maine has an excellent balance sheet. In their most recent report, they noted they had $1.1 billion in cash and short-term investments. The company has basically zero debt, with current liabilities of $218 million. With a balance sheet like this, Cal is able to cook up schemes that its competitors can only dream of. Cal also saw an increase in total assets, mostly driven by its acquisition of Echo Lake. Inventories also increased from $295 million to $340 million, which is primarily due to an intentional inventory expansion and the Echo Lake acquisitions. On the liability side of things, risks are minimal, there are no concerning trends, and the company's balance sheet can enable it to play defense if and when something goes wrong. 

Yawns, fuck this financial section, shit is so boring. Operating cash flow was up $373 million, up 55.5% compared to the numbie’s in the prior year period. These banging biscuit numbers came from stronger cash collections and the contributions of the Echo Lake Foods. Capex was also increased due to the company's ongoing expansion projects, like the scrambled egg, pancake, Crepini expansion, and various cage-free projects. Cal-Maine’s capital allocation strategy is fairly simple; the goal is to return capital to shareholders and invest in high-return growth projects. The company usually pays about one-third of its quarterly net income as a cash dividend to shareholders. This policy is attractive to dividend bois because it's transparent and scales as profitability grows. 

Capex is around $200 million annually, a slight increase due to the Echo Lake expansion. Cal is also investing heavily in cage-free facilities and expanding new ones to meet regulatory requirements and customer demand. Management has been disciplined about communicating their capex spending, noting that initial estimates growth will exceed well above the cost of capital, and prepared foods investments are expected to generate double-digit growth. Once egg prices stabilize and “recover,” Cal should see an increase in free cash flow, and they'll be able to accelerate both growth investments and capital returns. 

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Cal is focused on increasing its product portfolio beyond purely volume growth. Cal-Maine is not going to get 10%+ in a mature product category like eggs; this is why they are expanding their product portfolio to include prepared foods and specialty eggs. Management believes that specialty eggs will eventually exceed 50% of total shell egg sales. This is because younger customers prefer the specialty eggs, pasture-raised, organic, and free-range eggs. This segment is willing to pay more for these products regardless of macroeconomic conditions. Cal is able to benefit from this because they have an egg portfolio that spans across every segment, enabling it to capture growth wherever consumers are looking. 

Cal believes that prepared foods represent a major growth opportunity. The Echo Lake acquisition brought in $127 million in revenue in the first half of the company's fiscal year. Management is also investing heavily in this segment, intending to increase prepared food capacity by 30% over the next two years. The company also believes that its Crepini joint ventures will bring in $200-$300 million annually by late 2028. This is an entirely new product line for Cal that didn’t exist several years ago. In the conventional egg game, Cal has basically zero pricing power, though in specialty eggs, they have meaningful pricing power from brand equity and customer relationships. This enables Cal to pass on input costs (feed, labor, facility) to customers if and when they rise. 

Geographic expansion is another major opportunity for Cal, though it's more about market penetration than entering new territories. Cal currently operates across the nation, and its acquisition of ISE gave it a more meaningful presence in the Northeast and Mid-Atlantic. This is major because these regions have some of the highest egg consumption rates in the country, with some of the most aggressive cage free manades around. The prepared foods category creates tons of new growth opportunities that the shell eggs can’t compete with. These specialty / prepared foods can be sold to hospitals, schools, quick services restuarents, convenience stores, and frozen food aisles. Echo Lake Foods and Crepini have existing relationships with major food service distributors that Cal will be able to take advantage of and continue to scale at a rapid pace. These growth revenues are also uncorrelated to the traditional shell egg market. 

Over the last few years Cal-Maines M&A team has been putting in the hours, and management has been putting their balance sheet to acquire assets that either expand geographic reach, add specialty product lines, and diversify their product portfolio into the prepared foods arena. In 2025, Cal acquired assets like feed mills and facilities across Maryland, New Jersey, Delaware, and South Carolina. The company has also been making moves in the joint venture world with Crepini and Meadowcreak. Cal took a 51% stake in Crepini for $6.75 million to fund equipment and working capital. MeadowCreek focuses on hard-cooked eggs; this JV is similar to the Crepini shindig. This leaves tons of whitespace for Cal to make even more M&A moves. Currently, the company controls 17% of the market, meaning that the remaining percent are control by hundreds of small dawgs, many of which are family-owned businesses facing succession challenges. The small dawgs also lack the resources to continuously invest in biosecurity and upcoming regulations, which could force a sale to a large player for a discount. 

Supply chain acquisitions are another major possibility for Cal. In 2025, the company acquired Deal-Rite, which included two feed mills, grain storage facilities, and a retail feed business. Owning these segments is a major double u for Cal as it enables them to own its entire vertical supply chain, enabling them to control input costs, biosecurity, and provide additional security during grain market disruptions. While feed infrastructure doesn’t create notable revenue, it does reduce supply chain risk and creates competitive advantages that compound over time. While international expansion is not currently on the road map, Cal-Maine could look into firms within Mexico, Canada, or South America that could use the company's expertise in biosecurity, cage-free production, and vertical integration. 

Eggs are a major beneficiary of the GLP-1 drug wave due to their high protein, high fat, nutrient-dense, low-calorie, and high-satiety foods. Early data shows that those on the GLP-1s have increased consumption of foods like eggs, Greek yogurt, lean meats, and vegetables while decreasing consumption of processed carbs, sugary snacks, and empty-calorie treats. Even if a small portion of the U.S population ends up on these drugs, millions of people will shift how they eat and view food, which will benefit Cal-Maine significantly. Regulatory tailwinds will also benefit Cal due to cage-free mandates and other regulations, like how SNAP dollars can be spent. Cal-Maine has spent the last few years investing heavily in building cage-free facilities, specifically in anticipation of these regulations. While their competitors are now facing a dilemma, do they either spend hundreds of millions to build such facilities or exit those markets? This is a major win for Cal-Maine, and you can bet where their lobbying dollars are going.  

Many investors are missing the major food inflation and affordability action that is going on. This is a major benefit for egg lovers, the price of beef, chicken, and pork all risen 20-50% over the past five years. While eggs have seen a slight price increase, they remain the most affordable and nutritionally rich source of protein for all consumers. As grocery store budgets tighten, eggs have the ability to become the default choice for many families. Cal-Maine also has the opportunity to enter new markets where its current infrastructure and customer relationships line up. Like Egg-based protein ingredients for food manufacturing, which is a growing category where liquid and dried egg products are used in items like protein bars and meal replacement shakes. Pet food is another play as eggs are increasingly being used as a premium protein source in high-end pet foods that are marketed around natty ingredients with complete nutrition. 

The Echo Lake and Crepini expansion are major capacity expansion opportunities as Cal is investing millions into updating facilities and their capacity. Cal is investing 15 million to consolidate all scrambled egg manufacturing into a single modernized facility, which will add 17 million pounds of annual capacity by 2027. Cal is also investing $7 million in the Crepini JV, which will add 18 million pounds of capacity. Crepini’s product line include egg based wraps, protein pancakes, and crepes, which are sold in over 3500 retail locations and online. These investments aren’t just about adding capacity but reducing waste within their supply chains. These new lines will improve yields, reduce labor requirements, and increase throughput. The demand exists for these products, but the business has been supply-constrained, and removing any issues or bottlenecks will create immediate revenue. 

Shell capacity is happening through several smaller projects, with management noting they plan to add 1.1 million cage-free layers and 250,000 pallets in 2026. The companies build outs are primarily focused on cage-free due to continued regulation mandates and consumer demand. This approach aligns with management's capacity expansion strategy, adding just enough to meet demand and not to flood the market, which would negatively impact egg prices. Cal-Maine is also investing in its own trucking fleet to deliver eggs directly to customers. Owning this layer enables them to control delivery schedules, reduce reliance on third-party nerds, and allows them to guarantee service that their customers rely on. 

Cal-Maine's supply chain is one of its strongest moats and competitive advantages; the company owns its entire stack. The company owns and operates its breeder flocks, pullet facilities, processing plants, packaging equipment, warehouses, and then delivers to the customers in company-owned trucks. More or less, Cal-Maine knows ball. The company even produces its own oil to use in its trucks for gas. Just kidding, that would be sweet though. This level of vertical integration is rare in modern food production and creates supply chain resilience that its competition simply cannot match or even afford to compete with. Cal-Maine does not depend on or rely on third-party hatcheries or feed supplies, nor does it have to compete with other companies for supplies. This enables Cal to respond fast, make moves, and operate more cost-effectively than its competitors, who are at the whims of their suppliers and service providers. 

Biosecurity is one of the most important invisible parts of Cal-Maine's supply chain. Cal to the Maine has invested nearly $100 million in biosecurity infrastructure since 2015, which creates a pathogen control system that most competitors don’t even have. Every Cal farm has protocols designed to prevent HPAI as well as real-time monitoring that enables them to use real-time data to alert management if anything goes awry. The company also has strong relationships with veterinary suppliers, diagnostic labs, and regulatory agencies that enable it to respond to outbreaks quickly. Something that the little guys can’t compete with. Relationships and facilities like this are the reason Cal can operate almost 50 million hens across the nation without facing HPAI disaster. Cal-Maine has also integrated its data with major retailers, allowing them to see delivery schedules, order management, product availability, and manage invoices. Which creates another layer of safety in case the customer wants to switch to a competitor. 

The single largest risk for Cal-Maine is a highly pathogenic avian influenza. This event is unpredictable and something that management cannot avoid despite investing tens of millions od dollar in biosecurity. One bird or one human that unknowingly tracks the virus from another location could impact millions of birds. This would put production back months, and millions of dollars would be lost in opportunity costs. When a flock gets got, you simply cannot replace it overnight; it takes several months to fully replace the capacity. In 2022, multiple facilities were hit, and the industry lost over 43 million birds in a single year. Cal-Maine, over the years, has invested heavily in breeder flocks specifically to address these risks. 

While off to a successful start, the Echo Lake expansion risk is real, as prepared foods saw a minor revenue drop due to facility remodeling. Management states this is a temporary drop in revenue, but if the company faces any production or buildout delays, it could face several punches. From both revenue loss and overcost fees, as well as damage to customer relationships. Management depth and succession risk are also worth noting as the company has been making strong moves with Sherman Miller as its CEO, but the next leader may not have that dawg in them. Sherman has successfully executed throughout several cycles, as this industry requires deep instructional knowledge of flock management, retail supply chains, biosecurity, and industry dynamics. Labor is also a risk. 

While the people love cheap eggs, this poses a risk for Cal-Maine because cheap eggs don’t pay the bills or expand margins. If the wholesale prices reach a certain price, eggs could become deeply unprofitable for Cal. The company's farm production costs are roughly .93 cents per dozen; this doesn’t include processing, packaging, distribution, or SG&A. So if you’re a real one, buy the more expensive eggs. The USDA reported 303 million hens as of the end of 2025, which is down from 312 million in 2024. While the industry is working on rebuilding the hen population, there is a serious lag between when producers decide to add capacity and when those hens can produce profits. Cal-Maine is adding capacity strategically, though it can’t control what the other players in the egg game do. If the broader industry produces eggs out of the wazu, everyone will suffer through extended low prices (while cheap eggs are good for the end consumer, they are not good for profits). 

Cal-Maine also faces antitrust litigation and regulatory risks; the company is currently facing eight federal antitrust cases. These cases are alleging price manipulation during the 2022 HPAI outbreak. Not only are legal bills pricey, but any extra damages could also hurt the company's balance sheet and reputation. Even if the company wins, they’ll still be stuck with large legal bills and a distracted management team during the investigation shenanigans.  Cal-Maine also faces customer concentration risks, while the company doesn’t disclose individual customer revenue, one can guess that a majority of its revenue comes from about ten customers. If company XYZ decides to take its business elsewhere, Cal could lose hundreds of millions in annual revenue with no ability to replace it quickly. 

While cage-free eggs can be seen as a W because they can be sold at a premium, they do come with risks because many of the states that have mandated them have then or might outlaw traditional eggs. If and when conventional egg prices spike due to HPAI, they cannot wont be legally allowed to sell eggs in those states. They’ll be forced to sell cage-free eggs, which are lower margin. Compliance costs are also accelerating, which may vary from state to state. Cal-Maine has to maintain infrastructure across over a dozen states with different regulations, and every time a state passes new legislation, theyll need to eat the costs that go along with compliance. 

While it's predicted that the demand for eggs will go up due to GPL-1. Demand for eggs could fall because of personal preferences, plant based shit, and potential decreased costs in the meat, chicken, and pork departments. The egg has seen scares before due to phony research, like back in the day when there was an outburst in cholesterol concerns. If new studies pop up that suggest eggs are less healthy than currently believed, consumer demand could shift. While Cal-Maine is currently the noted industry king, private equity and institutional capital could fund competitors. The egg industry has historically been an oligopoly where producers don’t engage in destructive pricing, but that rationale isn’t guaranteed if new dogs enter the market with new incentives. 

The next year may be brutal for conventional egg pricing, as wholesale egg prices have crashed from $6-7 to $1-2 per dozen by the end of 2025. As the industry resupplies its flocks after HPAI losses, supply has stabilized faster than demand can absorb it. The Urner Barry index will likely stay between $1-2 per dozen for most of 2026. Underneath the conventional egg pricing mess, specialty egg mix is accelerating. Every percent shift away from conventional eggs benefits the company due to cost-plus pricing frameworks and structural margin stability. The Echo Lake expansion will also hit its stride in mid 2026, and when it does, prepared foods revenue should see a dramatic rise. 

Cal-Maine Foods is currently in a shit storm of conventional egg pricing, all while the company is executing the most significant strategic transformations in company history. Many investors are unsure about the company’s current valuation due to the broken commodity business and the stock's P/E. We believe this valuation makes sense as the company's specialty products mix is growing. The bad boys over at Azar Capital Group may or may not believe ;) that Cal is undervalued due to the ongoing demand for egg products. We don’t believe eggs are going away anytime soon and will stay in high demand for the next 1000 years. This is not a short-term trade unless you are a silly ape; we view this as a very long long play. 

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Disclosure

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