Rising Costs Sink Cal-Maine's 3Q Profits

By Matt Egan Retail FOXBusiness

Egg maker Cal-Maine Foods (CALM) suffered a 22% drop in fiscal third-quarter profits as the egg producer grappled with higher feed costs that offset rising sales.

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The Jackson, Miss.-based company said it earned $26.1 million, or $1.09 a share, last quarter, compared with a profit of $33.6 million, or $1.40 a share, a year earlier.

Cal-Maine, which is the largest U.S. producer and distributor of fresh egg shells, said its sales increased 11% to $303.7 million.

Hit by the higher costs, gross margins shrank to 21.5% from 23.9%.

The parent of Eggland’s Best and Farmhouse said its quarterly feed costs soared 11.1% year-over-year.

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“Our feed costs have continued to affect our production costs in fiscal 2012,” CEO Dolph Baker said in a statement. “We expect feed costs will remain very high and volatile throughout the summer of calendar 2012 due to tight supplies of corn and soybeans, our primary feed ingredients.”

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Shares of Cal-Maine, which have rallied almost 15% so far this year, were flat ahead of  Monday’s open.

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