August 3, 2016

Cal-Maine Foods Inc. announced it has agreed to acquire all of the assets of Foodonics International Inc. and its related entities doing business under the name Dixie Egg Company for an undisclosed amount.

Selling 1.06 billion dozen shell eggs in fiscal year 2015, representing 23% of the U.S. domestic shell egg market, Cal-Maine is the largest producer and marketer of shell eggs in the U.S. The company also has the largest flock in the U.S. with a total of 33.7 million layers and 8.4 million pullets and breeders, according to the company’s website.

Upon completion of the deal, Jackson, Mississippi-based  Cal-Maine will gain commercial egg production and processing facilities with a capacity for 1.6 million laying hens and all related feed production, milling, and distribution facilities located in Georgia, Alabama, and Florida. Dixie Egg also has contracts in place for an additional 1.5 million laying hens.

Through the transaction, Cal-Maine will also gain the Egg-Land’s Best Inc. licensing franchise which brings with it markets located in Alabama, Florida, Georgia, Puerto Rico, the Bahamas, and Cuba.

These 2015 sales follow a five-year stretch over which U.S. egg consumption increased each year, reaching its highest level in 30 years in 2014 at 260.7 eggs per person, according to data from the International Egg Commission reported by Watt AgNet.

The company is also one of the largest producers and marketers of specialty, value-added eggs including cage-free, organic, nutritionally enhanced, and brown eggs. In fiscal year 2015 specialty eggs accounted for 27.2% of its egg sales, and co-packed specialty eggs represented 2.8% of its total sales.

As of March 2016, organic and cage-free egg production accounted for 30.1 million hens, or 10% of the total U.S. flock of 302 million according to the American Egg Board. Of this number, 13.5 million hens are producing organic eggs, and 16.6 million hens are producing cage-free eggs.

Prior to this deal, Cal-Maine has pursued a course of consolidation within the shell egg space, completing 18 acquisitions ranging in size from 600,000 layers to 75 million layers since 1989 according to its company website.

Today there are approximately 198 egg producers with 75,000 hens or more representing approximately 99% of all U.S. hens according to the American Egg Board, and as of December 31, 2014 there were 59 egg producers owning a minimum one million hens representing 93% of the total industry’s layers with the ten largest producers owning 47% of the total industry layers according to Cal-Maine. These numbers indicate to Cal-Maine an industry that is still positioned for further consolidation, and the company states it will “plan to capitalize upon opportunities as they arise.”

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Lynda Kiernan