CAL-MAINE FOODS INC
For the period ended Jun 1, 2024. Filed Jul 23, 2024.
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FY2024 · Filed Jul 23, 2024
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Item 1. Business
Our Business
We are the largest
producer and distributor of shell eggs in the United States. Our mission is to be the most sustainable
and reliable
supplier of
consistent, high
quality fresh
and egg
in the
country,
demonstrating
a "Culture
of
Sustainability" in everything we do, and
creating value for our shareholders,
customers, team members and communities. We sell
most of our shell eggs throughout the majority of the U.S.
and aim to maintain efficient, state-of-the-art operations located
close
to our customers. We
were founded in 1957 by the late Fred R. Adams, Jr.
and are headquartered in Ridgeland, Mississippi.
The Company has one reportable
operating segment, which is the production,
grading, packaging, marketing and distribution
of
shell eggs. Our integrated
operations consist of hatching
chicks, growing and maintaining
flocks of pullets, layers
and breeders,
manufacturing feed, and
producing, processing, packaging, and
distributing shell eggs.
Layers are mature
female chickens, pullets
are female chickens usually less than 18 weeks of age, and breeders are male and female chickens used to produce fertile eggs to
be hatched for egg production flocks.
Our total flock as of June 1, 2024
consisted of approximately 39.9 million
layers and 11.8
million pullets and breeders.
Many of our customers rely
on us to provide most of
their shell egg needs, including
specialty and conventional eggs.
eggs encompass
a broad
range of
products. We
classify cage-free,
brown, free-range,
and nutritionally
enhanced eggs as specialty eggs for accounting and reporting purposes. We classify all other shell eggs as
conventional products.
While we report separate sales information
for these egg types, there are
many cost factors that are not
specifically available for
conventional or
specialty eggs
due to
the nature
of egg
production. We
manage our
operations and
allocate resources
to these
types of eggs on a consolidated basis based on the demands of our customers.
We
believe that
an important
competitive advantage
for Cal-Maine
Foods is our
ability to meet
our customers’
evolving needs
with a favorable product mix of
conventional and specialty eggs, including
cage-free, organic, brown, free-range,
and nutritionally-enhanced eggs, as well
as egg products. While a
small part of our current business,
the free-range and pasture-
raised eggs we produce and sell continues to grow and represents attractive offerings to a subset of consumers, and therefore our
customers, and help us continue to serve as the trusted provider of quality food choices.
Throughout the Company’s
history, we have acquired other businesses in
our industry. Since 1989,
we have acquired and
integrated 24 businesses. Subsequent to the end of our 2024 fiscal year,
we acquired our 25
th
business when we purchased
substantially all the assets of ISE America, Inc. and certain of its affiliates, relating
to their commercial shell egg production
and processing business. For information on our recent acquisitions, refer to
Part II. Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations - Acquisitions
.
When
we
use
“we,”
“us,”
“our,”
or
the
“Company”
in
this
report,
we
mean
Foods,
Inc.
and
our
subsidiaries,
unless
otherwise
indicated
or
the
context
otherwise
requires.
The
fiscal
year-end
is
on
the
Saturday
closest to May 31. Our fiscal
year 2024 ended June 1, 2024,
and the first three fiscal quarters
of fiscal 2024 ended September
2,
2023,
December 2, 2023,
and March 2, 2024.
All references herein
to a fiscal year
means our fiscal year
and all references to
a
year mean a calendar year.
Industry Background
According to the U.S.
Department of Agriculture (“USDA”) Agricultural
Marketing Service, in 2023
approximately 70% of table
eggs produced in the U.S. were sold as shell eggs, with 57% sold through food-at-home outlets such as grocery and convenience
stores,
11%
sold
to
food-away-from
home
channels such
as restaurants
and
2%
exported.
The
USDA estimated
that
in
approximately 30% of eggs produced in the U.S. were sold as egg products (shell eggs broken and sold in liquid, frozen, or dried
form) to institutions
(e.g. companies producing baked
goods). For information
about egg producers
in the U.S.,
see “Competition”
below.
Our
has
been
greatly
by
the
of
highly
avian
(“HPAI”)
.
For
information regarding
HPAI
and its impact
on our
industry and
business, see
and
Part II. Item 7.
.
Given
historical
trends,
that general
demand
for
eggs in
increases basically
in line
overall
U.S.
population
growth;
specific
events
can
impact
egg
supply
and
in
a
particular
period,
as
occurred with the 2015 HPAI outbreak, the COVID-19 pandemic (particularly during
2020), and the most recent
HPAI outbreaks
starting in early 2022 and
again in late 2023. For fiscal
2024, shell egg household penetration
is approximately 97%. According
to the
USDA’s
Economic
Research Service,
estimated annual
per capita
in the
United
States between
and
varied,
ranging
from
to
eggs
which
is
directly
by
supply.
The
USDA
calculates
per
capita
consumption by dividing total shell egg disappearance in the U.S. by
the U.S. population.
The most significant
shift in demand
in recent years
has been among
specialty eggs, particularly
cage-free eggs.
For additional
information, see “Specialty Eggs.”
Prices for Shell Eggs
Wholesale shell egg sales prices
are a critical component
of revenue for the Company.
We sell the
majority of our conventional
shell eggs at prices
based on formulas
that take into
account, in varying
ways, independently quoted
regional wholesale market
prices for shell eggs or formulas
related to our costs of production,
which include the cost of corn
and soybean meal. We
do not
sell eggs directly to consumers or set the prices at which eggs are sold to consumers.
Wholesale shell
egg
prices are
volatile,
cyclical,
and impacted
by a
factors,
including consumer
demand, seasonal
fluctuations,
the number
and productivity
of laying
hens in
and outbreaks
of agricultural
diseases such
as HPAI.
We
believe the majority of
conventional shell eggs sold in
the U.S. in the retail
and foodservice channels are
sold at prices that take
into
account,
in
varying
ways,
independently
quoted
wholesale
market
prices,
such
as
those
published
by
Urner
Barry
Publications,
Inc.
(“UB”)
or the
USDA
for
shell
eggs;
grain-based
or variations
of
cost
plus arrangements
are
also
commonly utilized.
The weekly
average price for
the southeast region
for large white
conventional shell
eggs as quoted
by UB is
shown below for
the past three
fiscal years along with
the five-year average
price. The actual prices
that we realize on
any given transaction
will
not necessarily equal quoted market
prices because of the individualized terms
that we negotiate with
individual customers which
are
influenced
by many
factors.
As further
discussed
in
Part II. Item 7. Management’s Discussion and Analysis – Results of
Operations
, egg prices in fiscal 2022 through fiscal 2024 were significantly impacted by HPAI.
Wholesale prices for cage-free eggs are quoted by independent
sources such as UB and USDA.
There is no independently quoted
wholesale
market
price
for
other
eggs
such
as
enhanced,
pasture-raise
and
free-range
eggs.
Specialty eggs are typically sold at
prices and terms negotiated directly with
customers and in the case of cage-free
eggs, can be
sold at
prices that
take into
account independently
quoted markets.
Historically,
prices for
specialty eggs
have generally
been
higher due to
customer and consumer willingness
to pay more
for specialty eggs. We utilize several
different pricing mechanisms;
however, the majority of our specialty eggs are typically sold at prices
and terms negotiated directly with customers.
As a result,
specialty egg prices do not fluctuate as much as conventional pricing.
Depending on market conditions, input costs and individualized contract terms, the price we receive per dozen eggs in any given
transaction may be more than or less than our farm production and other costs per
dozen.
Feed Costs for Shell Egg Production
Feed is a primary cost component in
the production of shell eggs and
represented 56.0% of our fiscal 2024 farm
production costs.
We
routinely fill
our storage
bins during
harvest season
when prices
for feed
ingredients, primarily
corn and
to a
lesser extent
are generally
lower.
To
ensure continued
availability of
feed ingredients,
we may
enter into
contracts for
future
of
corn
and
and
as part
contracts,
we
may
lock-in
the basis
portion
of our
grain
several months
in advance.
Basis is
the difference
between the
local cash
price for
grain and
the applicable
futures price.
The
difference can be
due to transportation
costs, storage costs,
supply and demand,
local conditions and
other factors. A
basis contract
is a common
transaction in the
grain market
that allows us
to lock-in a
basis level for
a specific delivery
period and
wait to set
the futures price at a later date. Furthermore, due to the more limited supply for organic ingredients, we may commit to purchase
organic
ingredients
in
advance
to
help
assure
supply.
Ordinarily,
we
do
not
enter
into
contracts
beyond
a
year
to
purchase corn and
soybean meal or
hedge against increases
in the prices
of corn and
soybean meal. As
the quality and
composition
of feed
is a
critical factor
in the
nutritional value
health of
our chickens,
we formulate
and produce
the vast
majority of our own feed at our feed mills located near our production plants. Our annual feed requirements for fiscal
2024 were
1.9 million tons of
finished feed,
of which we
manufactured 1.8 million tons.
We currently have the
capacity to store
210 thousand
tons of corn and soybean meal, and we replenish these stores as needed
throughout the year.
Our primary feed ingredients, corn
and soybean meal, are commodities that
are subject to volatile price changes due
to weather,
various supply
and demand
factors, transportation
and storage
costs, speculators,
agricultural, energy
and trade
policies in
the
U.S. and internationally, and global instability that could disrupt the supply chain. We purchase the vast majority of our corn and
soybean meal from U.S sources but may be forced to purchase internationally when U.S. supplies are not readily available. Feed
grains are currently
available from an
adequate number of
sources in the
U.S. As a
point of reference,
a multi-year comparison
of the average of daily closing prices
per Chicago Board of Trade for each quarter in our fiscal
years 2020-2024 are shown below
for corn and soybean meal:
Shell Egg Production
Our percentage of dozens produced to sold was 88.8%
of our total shell eggs sold in fiscal 2024.
We supplement
our production
through purchases of eggs from others
when needed. The quantity of eggs purchased will vary based on many factors
such as
our own production capabilities and current market conditions. In
fiscal 2024, 91.2% of our production came from company-
owned facilities, and 8.8% from contract producers. The majority
of our contract production is with family-owned farms for
organic, pasture-raised and free-range eggs. Under a typical arrangement
with a contract producer, we own the flock, furnish
all
feed and critical supplies, own the shell eggs produced and assume market risks. The
contract producers own and operate their
facilities and are paid a fee based on production with incentives for performance.
The commercial production
of shell eggs requires a source
of baby chicks for laying
flock replacement. We
supply the majority
of
our
chicks
from
our
breeder
farms
and
hatch
them
in our
hatcheries
in
a
computer-controlled
environment
and
obtain the
balance from commercial
sources. The chicks
are grown in
our own pullet
farms and are
placed into the
laying flock once
they
reach maturity.
After eggs are
produced, they are
cleaned, graded and
packaged. Substantially all
our farms have
modern “in-line” facilities
which
mechanically
gather,
clean,
grade
and
package
the
eggs
at
the
location
where
they
are
laid.
The
in-line
generate
significant efficiencies
and cost
savings compared
to the
cost of
eggs produced
from non-in-line
facilities, which
process eggs
that
have
been
laid
at
another
location
and
transported
to the
facility.
The
in-line
also
produce
a
higher
percentage of USDA Grade A eggs, which sell at higher prices. Eggs
produced on farms owned by contractors are brought to our
processing plants to be graded
and packaged. We maintain a Safe Quality Food
(“SQF”) Management Program which is
overseen
by our
Food Safety
Department and
senior management
team. As
of June
every Company-owned
processing plant
is
SQF certified. Because shell eggs are perishable, we do not maintain large
egg inventories. Our egg inventory averaged
six days
of
sales during
fiscal
- We
believe
our constant
focus
on production
efficiencies
and
automation
throughout
our vertical
integrated operations enable us to be a low-cost supplier in our markets.
We
are proud
to have
created and
upheld
what we
believe is
a leading
poultry
Animal Welfare
Program
(“AWP”).
We
have
aligned our AWP
with regulatory,
veterinary and our third-party certifying
bodies’ guidance to govern the welfare
of animals in
our direct care,
our contract farmers’
care. We
continually review our
program to monitor
and evolve standards
that guide how
we hatch chicks,
rear pullets and nurture
breeder and layer hens.
At each stage
of our animals’ lives,
we are dedicated to
providing
welfare
aligned
to
our
commitment
to
the
of
the
internationally
Five
Freedoms
of
Animal
Welfare
.
We
do not
use artificial
hormones in
the production
of our
eggs. Hormone
use in
the poultry
and egg
production industry
has
been
effectively
banned
in
since
the
1950s.
We
have
an
written
protocol
that
allows
the
use
of
medically
important
antibiotics
only
when
animal
health
is
at
risk,
consistent
with
guidance
from
the
United
States
Food
and
Drug
Administration
(“FDA”)
and
the
Guidance
for
Judicious
Therapeutic
Use
of
Antimicrobials
in
Poultry,
developed
by
the
American Association of Avian Pathologists. When antibiotics are medically necessary, a licensed veterinary
doctor will approve
and
administer
doses
for
a
period.
We
do
not
use
antibiotics
for
growth
promotion
or
enhancement.
Specialty Eggs
We
are
one
of
the
largest
and
marketers
of
shell
eggs
in
the
U.S.,
which
continues
to
be
a
significant and growing segment
of the market.
We classify cage-free, organic, brown, free-range, pasture-raised and
enhanced as specialty eggs for accounting and
reporting purposes. Specialty eggs are intended to
meet the demands of consumers
sensitive to environmental, health and/or animal welfare issues and
to comply with state requirements for cage-free eggs.
Ten
states
have
passed
legislation
or
mandating
minimum
space
or
for
egg
or
mandated the sale of
only cage-free eggs and
egg products in
their states, with implementation
of these laws ranging
from January
2022 to January 2030. These states represent approximately 27% of the U.S. total population according to the 2020 U.S. Census.
California,
Massachusetts, Colorado, Oregon,
Washington,
and Nevada, which collectively
represent approximately 20% of
the
total estimated U.S. population have cage-free legislation in effect
currently.
A significant number of our customers have announced goals to either exclusively
offer cage-free eggs or significantly increase
the volume of
cage-free egg sales
in the future, subject
in most cases
to availability of supply, affordability and
consumer demand,
among other contingencies. Our customers typically do not commit to long-term purchases of specific quantities or types of eggs
with us, and as a result, it
is difficult to accurately predict customer requirements for cage-free eggs. We are focused on adjusting
our cage-free production capacity with
a goal of meeting the
future needs of our customers
in light of changing
state requirements
and our customer’s goals. As always, we strive to offer a product mix that aligns with current and
anticipated customer purchase
decisions. We are engaging with our customers to help them meet their announced goals and needs. We have invested significant
capital in recent years to acquire and construct cage-free facilities, and we expect our focus for future
expansion will continue to
include cage-free
facilities. Our
volume of
cage-free egg
sales has
continued to
increase and
account for
a larger
share of
our
product mix. Cage-free egg revenue represented approximately 29.5% of our total net shell egg
sales for fiscal year 2024. At the
same time, we understand the importance of our continued
ability to provide affordable conventional eggs in order to
provide our
customers with a variety of egg choices and to address hunger in our communities.
Branded Eggs
We are a member of the Eggland’s
Best, Inc. cooperative (“EB”) and produce, market, distribute and sell
Best®
and
Land O’
Lakes®
branded eggs
under license
from EB
at our
facilities under
EB guidelines.
EB hens
are fed
a proprietary
diet
and offerings
include nutritionally
enhanced, cage-free,
organic, pasture
-raised and
free-range eggs.
Land O’
Lakes®
branded
eggs are produced by hens that are fed a whole-grain vegetarian diet and
include brown, organic and cage-free eggs.
In 2023, EB was the third best-selling dairy brand in the U.S. The top two best-selling branded specialty egg SKUs in 2023 were
EB branded eggs
and seven
out of
10 best-selling SKUs
are EB
branded eggs. In
2023, our
sales (including sales
through affiliates)
represented approximately 50% of EB branded eggs and 45% of
Land O’ Lakes®
branded eggs nationwide.
Our
® brand eggs are
produced at our
facilities by hens that
are provided with a
vegetarian diet. Our
offerings
of
® include cage-free, organic and pasture raised eggs.
We market organic, vegetarian and omega-3 eggs under
our
4-Grain®
brand, which consists of
conventional and cage-free
eggs. Our
Sunups®
and
brands are sold
as
conventional eggs.
We also produce,
market and distribute private label specialty and conventional shell eggs to
several customers.
Egg Products
Egg products are shell eggs broken
and sold in liquid, frozen, or
dried form. We
sell liquid and frozen egg products
primarily to
the institutional, foodservice and food manufacturing sectors in the U.S. Our egg products are primarily sold
through our wholly
owned subsidiaries
American Egg
Products, LLC
located in
Georgia and
Texas
Egg Products,
LLC located
in Texas.
2024, egg product sales constituted approximately 3.8% of our revenue.
During March 2023,
MeadowCreek Food,
LLC (“Meadowcreek”),
a majority-owned subsidiary,
began operations with
a focus
on
being
a
leading
provider
of hard
-cooked
eggs.
We
serve
as the
preferred
supplier
of specialty
and
eggs that
MeadowCreek
needs
to
manufacture
egg
products.
MeadowCreek’s
plan
is
to
extend
our
reach
in
the
foodservice and retail marketplace and bring
new opportunities in the restaurant,
institutional and industrial food products arenas.
Summary of Conventional and Specialty Shell Egg and Egg Product
Sales
The
table
sets
forth
the
contribution
as
a
percentage
of
revenue
and
volumes
of
dozens
sold
of
and
specialty shell egg and egg product sales for the following fiscal years:
Revenue
Volume
Revenue
Volume
Revenue
Volume
Conventional Eggs
Branded
4.3
%
4.9
%
6.6
%
6.4
%
6.5
%
7.1
%
Private-label
46.8
54.4
52.9
52.6
48.3
54.9
Other
4.4
5.8
5.7
6.3
5.0
7.0
Total Conventional
Eggs
55.5
%
65.1
%
65.2
%
65.3
%
59.8
%
69.0
%
Specialty Eggs
Branded
20.3
%
17.4
%
18.0
%
20.4
%
24.2
20.0
%
Private-label
18.5
16.3
11.3
12.9
11.3
9.5
Other
1.0
1.2
1.1
1.4
1.0
1.5
Total Specialty Eggs
39.8
%
34.9
%
30.4
%
34.7
%
36.5
%
31.0
%
Egg Products
3.8
%
3.9
%
3.4
%
Marketing and Distribution
sold our
and egg products
in 39 states
through the
southwestern, southeastern,
mid-western, mid-
Atlantic and northeastern regions of the U.S. as
well as Puerto Rico through our
extensive distribution network to a diverse group
of customers, including national and regional grocery store chains,
club stores, companies servicing independent supermarkets in
the U.S., foodservice distributors
and egg product consumers.
Some of our sales are
completed through co-pack
agreements – a
common practice in the industry whereby production and processing of
certain products are outsourced to another producer.
The majority of eggs sold are based on the daily
or short-term needs of our customers. Most sales to established
accounts are on
payment terms ranging from
seven to 30
days. Although we
have established long-term relationships
with many of
our customers,
most of them are free to acquire shell eggs from other sources.
The shell eggs we
sell are either delivered to
our customers’ warehouse or retail
stores, by our own
fleet or contracted refrigerated
delivery trucks, or are picked up by our customers at our processing facilities.
We
are a member
of the Eggland’s
Best, Inc. cooperative
and produce, market,
distribute and
sell
Best®
and
Land
O’ Lakes®
branded eggs directly and through
our joint ventures, Specialty
Eggs, LLC and Southwest
Specialty Eggs, LLC, under
exclusive
license
in
Alabama,
Arizona,
Florida,
Georgia,
Louisiana,
Mississippi
and
Texas,
and
in
portions
of
Arkansas, California,
Nevada, North
Carolina,
Oklahoma and
South Carolina.
We
an exclusive
license in New
York
City in addition
to exclusivity in
select New York
metropolitan areas, including
areas within New
Jersey and Pennsylvania.
As
discussed above under “Branded Eggs,” we also sell our own
® and
4-Grain
® branded eggs.
In 2022, we
joined as a member
during the formation
of ProEgg, Inc. (“ProEgg”),
a new egg farmer
cooperative in the
western
United
States.
During
2024,
after
careful
review
and
full
we
decided
to
withdraw
our
membership
in
ProEgg.
The
withdrawal from ProEgg did not affect any of our existing customer
relationships.
Customers
Our top
three customers
an aggregate of
49.0%, 50.1%
and 45.9%
of net sales
dollars for
2023, and
2022,
Our largest
customer,
Walmart
Inc. (including
Sam's Club),
34.0%, 34.2%
and 29.5%
of net
sales dollars for fiscal 2024, 2023 and 2022, respectively.
For shell
egg
sales in
,
89% of
our revenue
related
to sales
to retail
and
11%
to sales
to
foodservice providers. Retail customers include primarily national and regional
grocery store chains, club stores, and companies
servicing independent
supermarkets in the U.S.
Foodservice customers include
primarily companies that
sell food products
and
related items to restaurants, healthcare and education facilities and hotels.
Competition
The production, processing,
and distribution of shell
eggs is an intensely
competitive business, which
has traditionally attracted
large numbers of
producers in the U.S. Shell
egg competition is generally
based on price, service and
product quality.
The shell
egg
remains
highly
fragmented.
to
Egg
Industry
Magazine
,
the
ten
largest
owned
approximately 54% and 53% of industry table egg layer hens at calendar
year-end 2023
Seasonality
Retail sales of shell eggs historically have been highest during the fall and winter months and lowest during the summer months.
Prices for shell eggs fluctuate
in response to seasonal demand
factors and a natural
increase in egg production during
the spring
and early summer.
Historically,
shell egg prices tend
to increase with the
start of the school
year and tend
to be highest prior
to
holiday
periods,
particularly
Thanksgiving,
Christmas
and
Easter.
Consequently,
and
all
other
things
being
equal,
we
would
expect to experience
lower selling prices,
sales volumes and net
income (and may
incur net losses) in
our first and
fourth fiscal
quarters ending in August/September and May/June, respectively. Accordingly, we generally expect our need for
working capital
to be highest during those quarters.
Growth Strategy
Our
growth
strategy
is
centered
on
growth
through
strategic
acquisitions,
organic
growth,
and
expansion
of
our
We
believe
that
we
can
to
expand
our
market
reach
through
strategic
and
achieve
favorable
returns
through
our
proven
model
emphasizing
synergies
and
efficient
Organic
growth
is
grounded in
our culture of
operational excellence
to optimize everything
we can control.
We
are committed
to investing in
our
existing operations
to increase sales,
profitability and
customer service.
We
have continued to
increase our production
of cage-
free shell eggs and
other higher value specialty
eggs such as pasture-raised,
free-range and organic
shell eggs. We
believe there
is long-term
growth potential
in value-added
products such
as hard-cooked
eggs, which
will enable
us to
leverage our
existing
channels,
expand
our
reach
in
foodservice
and
retail
marketplaces
and
bring
new
opportunities
in
the
restaurant,
institutional and industrial food products arenas.
Trademarks
and License Agreements
We own the trademarks
Farmhouse Eggs®
,
Sunups®
,
and
4Grain®
. We produce and
market
Egg-Land's Best
®
and
Land O’ Lakes
® branded eggs under
license agreements with
EB. We
believe these trademarks
and license agreements
are
important to our business.
Government Regulation
Our facilities and
operations are subject
to regulation by
various federal, state,
and local agencies,
including, but not
limited to,
the FDA,
USDA, Environmental
Protection
Agency (“EPA
”), Occupational
Safety and
Health Administration
("OSHA") and
corresponding state agencies. The applicable regulations relate to grading, quality control, labeling,
sanitary control and reuse or
disposal of waste. Our shell egg facilities are subject to periodic USDA, FDA, EPA and OSHA
inspections. Our feed production
facilities are subject to FDA, EPA
and OSHA regulation and inspections.
We maintain
inspection programs
and in certain cases
utilize
certification
bodies
to
monitor
compliance
with
our
own
and
specifications. It is possible that
we will be required to incur
significant costs for compliance with
such statutes and regulations.
In the future, additional rules could be proposed that, if adopted, could
increase our costs.
A number of
states have passed
legislation or regulations mandating
minimum space or
cage-free requirements for
or have
mandated the
sale of
only cage-free
in their
states. For
further information
the heading
“Specialty Eggs” within this section.
Environmental Regulation
Our operations and facilities are subject to various federal, state, and local environmental, health and safety laws and regulations
governing,
among
other
things,
the
generation,
storage,
handling,
use,
transportation,
and
of
hazardous
materials. Under these laws and regulations, we must obtain permits from governmental authorities,
including, but not limited to,
wastewater discharge
permits. We
have made, and
will continue to make,
capital and other expenditures
relating to compliance
with
existing
environmental,
health
and
safety
and
permits.
We
are not
currently
aware
of any
capital expenditures necessary to comply with such laws and regulations; however,
as environmental, health and safety laws and
regulations are becoming increasingly
more stringent, including
those relating to animal wastes
and wastewater discharges,
it is
possible that we will have to incur significant costs for compliance with such
laws and regulations in the future.
Human Capital Resources
As of June 1, 2024, we had 3,067 employees, of whom 2,370 worked in egg production, processing,
and marketing, 204 worked
in
feed
mill operations
and 493, including
our
executive officers,
were
employees. Approximately
4.5% of
our
personnel
are
part-time, and we
utilize
employment
agencies
and
contractors
to
augment
our
staffing needs when necessary.
For fiscal 2024, we
had 1,962 average monthly
contingent workers. As of June
1, 2024, none of
our employees were covered by a collective bargaining agreement.
We consider our
relations with employees to be good.
Culture and Values
We
are
proud
to
be contributing corporate
citizens
where
we live
and
work and to
help create healthy,
prosperous
communities. Our
colleagues
help
us
to
enhance our community
contributions,
which are driven
by
our longstanding culture that strives to promote an environment that upholds integrity and respect and provides opportunities for
each colleague to
realize full potential. These commitments
are encapsulated in
the
Cal-Maine Foods Code
of Ethics and
Conduct
and in our
Human Rights Statement
.
Health and Safety
Our top priority is the
health and safety of our
employees, who continue to produce
high-quality,
affordable egg choices for
our
customers and contribute to a
stable food supply. Our enterprise safety committee is
comprised
of two corporate safety managers,
nine area compliance managers (three
specifically for worker health and
safety), and 55 local
site compliance managers, feed mill
managers
and
general
managers.
The
committee
that
oversees health
and
safety regularly
reviews
our
written policies
and
changes to OSHA regulation standards and shares information as it relates to outcomes from incidents in order to improve future
performance and
our health
and safety
practices.
The committee’s
goals include
working to
help ensure
that our
engagements
with our consumers, customers, and regulators evidence our strong
commitment to our workers’ health and safety.
Our commitment to our colleagues’ health includes a strong
commitment to on-site worker safety,
including a focus on accident
prevention and life safety.
Our Safety and Health Program
is designed to promote best
practices that help prevent
and minimize
workplace accidents and illnesses. The scope of our Safety and
Health Program applies to all enterprise colleagues. Additionally,
to
help
protect
the health
and well-being
of
our
colleagues and
people
in our
value
chain,
we
require
that any
contractors
or
vendors
acknowledge
and
agree
to
comply
with
the
guidelines
governed
by
our
Safety
and
Health
Program.
At
each
of
our
locations, our general managers are expected to
uphold and implement our Safety and Health Program in alignment
with OSHA
requirements. We
believe that
this program,
which is reviewed
annually by
our senior management
team, contributes
to strong
safety outcomes. As part of our
Safety and Health Program, we conduct multi-lingual training that
covers topics such as slip-and-
fall avoidance, respiratory protection, prevention of
hazardous communication of chemicals, the
proper use of personal
protective
equipment, hearing
conservation, emergency
response, lockout
and tagout
of equipment
and forklift
safety,
among others.
We
have
also
installed dry
hydrogen
peroxide biodefense
systems
in
our
to
help
protect
our
colleagues’
respiratory health. To help drive
our focus on
colleague safety, we developed safety
committees at each
of our sites
with employee
representation from each department.
We
review
the success
of our
safety programs
on a
monthly basis
to monitor
their effectiveness
and
the development
of any
trends that need to
be addressed. During fiscal
year 2024
our recordable incident rates
decreased by 20% compared to
People
Our
strength
as
a
company
comes
from
our
at
all
levels
and
we
have
a
long-established
culture
that
values
each
individual’s
contributions
and
encourages
productivity
and
growth.
This
culture is driven
by
our
board
and
executive
management team. Our
board is comprised
of seven members, four
of whom are independent,
two of whom
are women, one of
whom is of
a racial
or ethnic minority. As of
June 1,
2024, our
total workforce was comprised
of 31% women and
56% individuals
who identify as
racial or ethnic
minorities. Our Policy against Harassment,
Discrimination, Unlawful
or Unethical Conduct
and
Retaliation; Reporting
Procedure affirms
our commitment
to supporting
our employees
regardless of race,
color, religion,
sex,
national origin or any other basis protected by applicable law.
We
are
an
Equal
Opportunity
Employer
that
prohibits
any
violation
of
federal,
state,
or
local
law
employment. Discrimination
on any
basis protected
by applicable
law is
prohibited.
We
maintain strong
protocols to
help our
colleagues perform their jobs
free from harassment
and discrimination. We are committed
to offering our
colleagues opportunities
commensurate with our operational needs and their experiences, goals
and contributions.
Recruitment, Development and Retention
We
believe
in compensating
our
colleagues
with
fair
and competitive wages, in
addition
to offering
competitive benefits. Approximately 76% of our employees
are paid at hourly rates, which are all paid at rates above
the federal
minimum
wage
requirement.
We
offer
our
full-time
eligible
a
range
of
benefits,
company-paid
life
insurance. The Company provides a comprehensive self-insured health plan and pays approximately 82% of the costs of the plan
for
participating
and
their
families
as
of
December
31,
- Recent
benchmarking
of
our health
plan
indicates comparable
benefits, at
lower
employee contributions, when compared
to an applicable
Agriculture
and
Food Manufacturing sector grouping, as well as peer group data.
In addition, we offer employees the opportunity to purchase an
extensive range of other group
plan benefits, such as dental, vision,
accident, critical illness, disability
and voluntary life.
After
one
year
of
employment, full-time employees
who
meet
eligibility
requirements may
elect
to participate
in
our
KSOP retirement plan,
which
offers
a
range
of
alternatives
and
many positive features,
such
as
automatic enrollment with scheduled
automatic contribution
increases and loan
provisions. Regardless of
the
employees’ elections
to contribute
to
the
KSOP,
the
Company contributes shares
of Company
stock or
cash
equivalent
to 3%
of participants’ eligible compensation for each pay period that hours
are worked.
We
provide
training
and
development related
to
safety,
compliance,
and
task
training.
We
invest
in
developing our future leaders through our Management Intern, Management
Trainee and informal mentoring programs.
Sustainability
We understand that climate, and the potential
consequences of climate change, freshwater availability and preservation of global
biodiversity, in addition to
responsible management of
our flocks, are
vital to
the production of
high-quality eggs and
and to the success of our
Company. We have engaged in agricultural production for
more than 60
years. Our agricultural practices
continue to evolve as we continue to strive to meet the need for nutritious, affordable foods to feed a growing population
even as
we
exercise responsible
natural
resource
stewardship
and
conservation.
We
published our
most
recent sustainability report
for
our fiscal 2023 in July
2024, which is available on
our website. Information
contained on our website is not
a part of this report
on Form 10-K.
Our Corporate Information
We
a
website
at
www.calmainefoods.com
where
general
about
our
and
governance
matters is
available. The
information contained
in our
website is
not a
part of
this report.
Our Annual
Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q, Current Reports
on Form 8-K, proxy
statements, and all amendments
to those reports filed
or
furnished pursuant
to Section
13(a) or
15(d) of
the Exchange
Act are
available, free
of charge,
through our
website as
soon as
practicable
after
we
file
them
with,
or
furnish
them
to,
the
SEC.
In
the
SEC
maintains
a
website
at
www.sec.gov
that
contains
reports,
proxy
and
statements,
and
other
issuers
that
file
electronically with the SEC. Cal-Maine Foods, Inc. is a Delaware corporation,
incorporated in 1969.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.