CALM's Strategic Cage-Free Expansion Sets It for Solid Market Gains
Cal-Maine Foods CALM is moving ahead with its $60 million expansion plan, aimed at expanding capacity for 1.1 million cage-free layer hens and 250,000 pullets by end of 2025. This is part of CALM's multi-year strategy to capitalize on shifting consumer preference for cage-free eggs. With ten U.S. states enforcing cage-free egg production by 2030, around 73% of U.S non-organic laying hens will need to be transitioned to cage-free systems to meet demand.
To address this evolving market, Cal-Maine has been strategically scaling its cage-free operations through a combination of organic investments and acquisitions. The company has been upgrading existing facilities and converting conventional housing to cage-free environments.
Cal-Maine's inorganic growth efforts are equally significant. In 2022, it acquired the remaining 50% interest in Red River Valley Egg Farm, adding around 1.7 mm cage free layers. The acquisition of Fassio Egg Farms, Inc in September 2023 increased capacity by 1.2 million laying hens, primarily cage-free. The acquisition of ISE America, Inc. in late 2024 added an additional 1 million cage-free laying hens.
Backed by its efforts, cage-free eggs now account for a larger share of CALM's product mix and represented approximately 29.5% of its total net shell egg sales in fiscal year 2024.
While cage-free egg production is more expensive than for conventional eggs, it supports premium pricing, offering a long-term growth driver for Cal-Maine.
Post Holdings Steps Up Cage-Free Investment
Post Holdings, Inc. POST is also incurring additional operating and capital costs to procure cage-free eggs, modify existing layer hen facilities and construct new cage-free layer hen housing and comply with other farm animal initiatives.
Post Holdings' investment plan for 2025 includes the completion of the Norwalk, IA, precooked egg facility expansion and continued cage-free egg facility expansion, for aggregate expenditures of $80-$90 million.
Vital Farms' Pasteur-Raised Offerings Have an Edge
The specialty egg (including pasture raised and free-range) market has witnessed a CAGR of 21.4% between 2020 and 2024 to reach $8.3 billion in retail sales in 2024.
Vital Farms, Inc. VITL, the leading U.S. pasture-raised egg brand, is riding strong consumer demand, with customers willing to pay more for ethically sourced, transparent and sustainable food.
Vital Farms continues to accelerate supply expansion. During the first quarter of 2025, Vital Farms added new family farms to its network, which now exceeds 450 family farmers. Vital Farms' internal capacity expansion plans also remain on track, with the construction of an additional egg washing and packing line at its Egg Central Station facility in Missouri slated for completion during the fourth quarter of 2025, as originally scheduled.
CALM's Price Performance, Valuation & Estimates
Cal-Maine gained 68.1% in a year against the industry 's 9.2% decline.
CALM is currently trading at a forward 12-month price/earnings (P/E) ratio of 17.84X compared with the industry's 11.32X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cal-Maine's fiscal 2025 earnings is $22.73 per share, indicating a year-over-year increase of 299.5%. The estimate for fiscal 2026 of $5.71 indicates a 74.9% decline. The chart below depicts the revision activity for CALM's earnings estimates for 2025 and 2026.
CALM currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Cal-Maine Foods, Inc. (CALM): Free Stock Analysis Report
Post Holdings, Inc. (POST): Free Stock Analysis Report
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Why Did Cal-Maine Foods Stock Drop Today?
Shares of Cal-Maine Foods (NASDAQ: CALM), America's biggest producer of chicken eggs, closed down 2.5% on Wednesday, a day in which there seemed no obvious news to serve as a catalyst for the decline. To find the catalyst, you may have to flip back a few days on your calendar. Bad news is good news for Cal-Maine Specifically, flip back to June 6, when the August Egg Company announced a voluntary recall of its brown cage-free and organic brown eggs on worries of salmonella contamination. That recall affected multiple brands of eggs wholesaled by August to retailers, across nine states -- and removed 20.4 million eggs from the market, sparking worries of rising egg prices. With August out of the market, companies not recalling their eggs -- companies like Cal-Maine Foods -- actually stood to benefit from the salmonella scare. From recall day through yesterday, Cal-Maine's stock price had risen nearly 4%. As worries over a supply deficit recede, however, Cal-Maine may have begun giving back its gains. Is Cal-Maine stock a buy? Current shareholders may not be thrilled with today's price decline, but new investors should be -- because it makes the stock even cheaper than it already was. Valued on trailing-12-month profits, Cal-Maine stock costs a lowly 5 times earnings. And granted, last year's expensive eggs may become cheaper in the future, hurting profits. But based on analyst forecasts for more than $8 a share in earnings next year, Cal-Maine stock remains attractively priced at 12 times forward earnings. Scramble in a generous 6.6% dividend yield, and Cal-Maine stock looks even more attractive. Unless and until you see eggs at your supermarket getting significantly cheaper, now could be a good time to buy Cal-Maine stock. Should you invest $1,000 in Cal-Maine Foods right now? Before you buy stock in Cal-Maine Foods, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cal-Maine Foods wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $689,813!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $906,556!* Now, it's worth noting Stock Advisor 's total average return is809% — a market-crushing outperformance compared to175%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
