Cal-Maine reports avian flu in Kansas facility, stock takes a hit

By Claudia Assis

About 1.6% of the company's total flock affected, Cal-Maine says

Cal-Maine Foods Inc. has detected the avian flu pathogen at one of its facilities in Kansas, affecting about 684,000 laying hens, or 1.6% of the egg producer's total flock.

Cal-Maine (CALM), the biggest U.S. distributor of shell eggs, said it temporarily halted production at the facility, which it did not name, as it follows U.S. Department of Agriculture protocols to deal with the findings.

"Cal-Maine Foods is working to secure production from other facilities to minimize disruption to its customers," the company said. Shares of Cal-Maine dropped about 2% in the extended session Tuesday, after ending the regular trading day down 3.7%.

Cal-Maine cited the USDA as saying that detections "do not present an immediate public-health concern and are not a threat to the food supply." There's "no known risk related to HPAI associated with eggs that are currently in the market and no eggs have been recalled," the company said.

There have been no positive tests for avian flu at any other Cal-Maine Foods locations to date, the producer said. "Additional strict protocols are in place designed to prevent exposure from the Kansas facility to other locations, including the company's nearby layer complex, which houses approximately 1 million hens," it said.

Cal-Maine said it will next update investors about the detection when it reports quarterly results in early January, unless "material" information surfaces for interim updates.

The Ridgeland, Miss., company is the U.S. largest producer and distributor of fresh shell eggs, selling most of its shell eggs in states across the Southwest, Southeast, Midwest and Mid-Atlantic regions.

According to the USDA, the highly pathogenic avian influenza (HPAI) virus strains, the type detected at the Cal-Maine facility, "are extremely infectious, often fatal to chickens, and can spread rapidly from flock to flock."

The virus was detected in a sample from a wild bird in South Carolina in January 2022.

"This heralded what is currently the largest avian influenza outbreak in U.S. history" with spillover into poultry, as well as wild and captive wild mammals and outdoor domestic cats, the agency has said.

By March 2023, HPAI was confirmed in 47 states, and more than 72 million birds were affected.

Cal-Maine said last year that the outbreak would continue to hit egg supplies for the rest of the year "and possibly beyond."

Infected flocks are culled to curb the spread of the virus, tightening the supply of eggs and poultry meat.

Eggs were one of the more vivid day-to-day examples of rising prices, and egg prices peaked in January to an average of $4.83 for a dozen large eggs. They averaged $2.14 a dozen in late November, according to the U.S. Bureau of Labor Statistics, from around $1.50 a dozen in early 2020, pre-pandemic.

-Claudia Assis

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12-12-23 1717ET

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