US: Waning free-range egg sales prompts production cut
Waning free-range egg sales in the United States has prompted the nation’s largest egg producer to cut back on their production.
Mississippi-based Cal-Maine Foods said that while it has committed considerable resources to the free-range sector in the light of the drive by retailers to sell cage-free eggs, it was concerned that the public did not want to pay the higher costs.
In the company’s first quarter results, chairman Dolph Baker said many food service providers, national restaurant chains and major retailers had made a public commitment to transition away from conventional eggs and exclusively offer cage-free eggs by future specified dates.
“However, the higher price gap between conventional eggs and speciality eggs has resulted in reduced demand for speciality eggs.
“We have adjusted our production levels in line with current consumer demand for cage-free eggs and we are well positioned to increase our capacity when demand trends change.
“Above all we will continue to support our customers with a favourable mix that included cage-free eggs, as well as other healthy and affordable options for consumers including conventional, nutritionally enhanced and organic eggs.”
Cal-Maine’s largest customer is Wal-Mart, which committed to being cage-free by 2025.
Commenting on the wider egg situation in the US, Mr Baker said lower institutional demand for egg products and reduced export demand have resulted in an over-supply and created additional pricing pressures.
“USDA reports that shell egg exports have returned to historical levels since the beginning of calendar 2017, but are still below peak levels reached before the AI outbreak in 2015.”
Meanwhile, the second largest egg producer in the US Rose Acre Farms, has also said it was shutting its construction programme down.
Rose Acre Farms has spent $250m over four years upgrading its poultry facilities with 20% of birds cage free.
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