While consumers have been enjoying cheap eggs from the grocery store, the opposite can be said for Cal-Maine Foods (NASDAQ: CALM), which hasn't been enjoying the pricing environment. The largest producer of fresh shell eggs in the U.S. shot to record highs in 2015, only to slowly decline in price ever since. The culprit for the epic rise and fall? The volatile nature of egg prices.
A two-year egg industry history
Commodity prices are volatile. Seasonal changes and small fluctuations in supply and demand for the most basic of items can result in wild swings in prices. Such is the case with agricultural products, eggs included.
In the spring of 2015, egg prices soared to record highs due to the outbreak of avian flu in the Midwest that reduced supply. The disease killed tens of millions of birds and reduced the size of national hen flocks by 12%. Farms affected by the outbreak struggled, but unaffected producers enjoyed the higher prices received from distributors and grocery stores.
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