Cal-Maine Foods says current HPAI epidemic surpassed prior outbreak in duration

The current HPAI epidemic has surpassed the prior 2014-2015 outbreak in terms of its duration and the number of affected hens in the U.S., and HPAI continues to circulate throughout the wild bird population in the U.S. and abroad. Cal-Maine Foods has followed strict biosecurity protocols across all locations and facilities since the previous outbreak and continues to closely monitor the current outbreak. The USDA division of Animal and Plant Health Inspection Service ("APHIS") reported on March 27, 2023, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been depopulated due to HPAI since February 2022. According to the U.S. Centers for Disease Control and Prevention, these detections do not present an immediate public health concern. Outbreaks in commercial poultry flocks in the U.S. have most recently occurred during March 2023. There have been no positive tests for HPAI at any Cal-Maine Foods’ owned or contracted production facility as of March 28, 2023. The Company is working closely with federal, state and local government officials, and focused industry groups to mitigate the risk of future outbreaks, and effectively manage a response, if needed. The Company believes the HPAI outbreak will continue to exert downward pressure on the overall supply of eggs, and the duration of these effects will depend in part on the timing of replenishment of the U.S. layer hen flock. Prior to the outbreak of HPAI in February 2022, the layer hen flock five-year average from 2017 through 2021 was comprised of approximately 328 million hens. According to a LEAP Market Analytics report dated March 21, 2023, the layer hen inventory is not projected to exceed 328 million again until January of 2024. Layer hen numbers reported by the USDA as of March 1, 2023, were 312.9 million, which represents a decrease of 3.8% compared with the layer hen inventory a year ago. However, the USDA also reported that the hatch from October 2022 through February 2023 increased 4.5% as compared with the prior-year period, indicating that layer flocks may increase in the future.