US eggs major Cal-Maine Foods is investing $40m in new capital projects to expand cage-free production.
The Mississipp-based company, the largest producer and distributor of fresh shell eggs in the US, plans to fund the projects through a combination of available cash on hand, sales of investment securities and operating cash flow.
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Cal-Maine said the projects reflect consumer demand for free-range eggs and the need to meet regulatory requirements at the state level. They will include the addition of five new cage-free layer houses across the company’s locations in Florida, Georgia, Utah and Texas.
The group plans to start construction by the end of this year and expects to complete the projects, with an additional production capacity for around one million cage-free layer hens, by late summer 2025.
Cal-Maine said the new layer houses will primarily replace recently retired caged facilities.
The company has also provided an update on its conversion of the former Tyson Foods facilities in Dexter, Missouri, acquired in March.
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By GlobalDataIt said work to remodel and repurpose these assets for their use in shell-egg production has been progressing. It has secured commitments from growers for approximately 1.2m additional free-range hens by autumn 2025, with plans to add more capacity in the future.
In June, it was revealed Cal-Maine and Tyson are facing a class action lawsuit linked to the sale of a Tyson Dexter facility to the egg producer.
A local law firm is suing the companies on behalf of 45 local farmers who raised chickens for Tyson. Their complaint, lodged in the Circuit Court of Stoddard County, Missouri, on 6 June, accuses Tyson of reneging on a promise to refrain from anti-trust behaviour.
Legal business The Oliver Firm claimed Tyson had assured local and state officials it would sell the site to a competitor after closing two plants in the state earlier this year but instead sold it to Cal-Maine.
Commenting on today’s capex announcement, Cal-Maine president and CEO Sherman Miller said: “We are pleased to announce these new expansion projects, which support our strategy to increase our free-range production in line with customer demand and expanding state requirements for cage-free eggs.
“The additional capacity will further enhance our ability to serve our growing customer base. We have made considerable progress with the conversion of the Dexter facilities and look forward to the additional production and distribution capabilities from this location.”
Last month, Cal-Maine joined forces with US peer Crepini to form a prepared foods and egg products venture.
It said it has “completed a strategic investment” with Crepini to operate the new entity Crepini Foods, located in New York.
Cal-Maine will hold 51% of the venture and will inject $6.8m for Crepini Foods to purchase new equipment and to fund working capital.
