A Profitable Hedge Against Rising Egg Prices?
If you've been to the grocery store lately, you've probably noticed one thing: egg prices are soaring. From breakfast tables to bakeries, everyone’s feeling the pinch.
But while most consumers are scrambling to pay more, investors might have a way to turn rising egg prices into profits — through Cal-Maine Foods (NASDAQ: CALM), the largest shell egg producer in the U.S.
CALM is currently A-rated according to our Zen Ratings system … and may be poised to benefit from the price hike you’re seeing in your grocery bill. Here’s why.
Egg Prices Are Up — And CALM Is in the Driver’s Seat
Egg prices have been volatile for years, largely due to avian flu outbreaks that have decimated egg-laying hen populations.
Since 2021, over 140 million hens have been culled due to fears of the virus, leading to severe supply constraints and rising prices.
But here’s where it gets interesting for Cal-Maine:
- As the largest shell egg producer in the U.S., the company holds dominant market share — making it a direct beneficiary of price hikes.
- Government intervention is boosting industry support, with up to $1 billion in subsidies to egg producers.
- Short-term supply constraints remain, even as the U.S. considers ramping up imports.
Trump Administration’s Plan: A Mixed Bag?
To combat rising egg prices, the Trump administration is considering importing eggs from more countries, expanding beyond the current reliance on Turkey. While this could provide some relief to consumers, imports alone won’t be enough to offset the supply crunch.
More importantly for CALM investors, the administration is also allocating $1 billion in funding to bolster domestic egg production, including:
- $400 million in subsidies to rebuild flocks.
- $500 million for biosecurity measures.
- $100 million toward vaccine development.
What This Means for Cal-Maine Investors
Cal-Maine’s stock quickly jumped 7% on the news — a sign that the market recognizes the company’s strong position in the industry. Even if imports temporarily alleviate price pressures, government support will likely lower Cal-Maine’s costs and boost margins.
Beyond the short-term, Cal-Maine remains a strong play in the food inflation trade. As the dominant U.S. egg supplier, it’s well-positioned to benefit from long-term price trends, government backing, and its sheer scale in the industry.
Cal-Maine currently receives an A for Value according to our Zen Component Grades, which weighs these key value factors:
- Estimated earnings yield: Compares earnings expectations to current stock price.
- Earnings Before Interest and Taxes/Enterprise Value: Assesses operating profits relative to total business value.
- Cash flow yield: Evaluates the relationship between a company's cash flow and its stock price.
- Free cash flow to price: Assesses value relative to a company's ability to generate free cash flow.
- Price-to-earnings growth (PEG) ratio: Balances price-to-earnings with growth expectations.
We also think value stocks are poised to shine in 2025. Here’s why.
See how CALM scores on Growth, Momentum, and more here.
Bottom line? For investors looking to hedge against food inflation and capitalize on a tight egg market, Cal-Maine may be one of the best ways to play it.
Click here to add CALM to your watchlist.
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