Top US Egg Maker Idles Texas Plant After Bird Flu Outbreak *Centurion Insurance AFS*

Cal-Maine Foods Inc., the biggest egg producer in the US, has culled roughly 3.6% of its flock after birds at a Texas facility tested positive for avian flu, adding to concerns over a widening outbreak.

Nearly 1.6 million laying hens and 337,000 pullets were destroyed and production at the Parmer County plant has temporarily ceased, the company said in a statement. Shares of the producer plunged as much as 6.1%, the biggest intraday decline since October, before erasing declines.

That’s the biggest bird flu casualty in the US since Dec. 7, when 2.6 million birds were killed at an egg farm in Ohio after the virus was found in the facility, according to data from the US Department of Agriculture’s Animal and Plant Health Inspection Service. Cal-Maine also reported an outbreak at a Kansas facility in December that affected 684,000 hens.

The latest Cal-Maine infections come at a time when highly pathogenic flu is spreading in dairy cattle herds — including in Texas — raising concerns about the potential impact on the food chain. In 2022, the worst-ever global outbreak of the disease prompted more than 72 million birds to be killed in the US to slow the spread of the virus.

This is the first significant outbreak of the spring migration season, and it “shines a spotlight on the prospect of additional cases impacting broader industry production and tightening the egg supply,” Stephens analysts Ben Bienvenu and Jack Hardin wrote in a note.

The company said it’s working closely with authorities and industry groups to mitigate the risk of future outbreaks. It added that the virus can’t be transmitted through safely handled and properly cooked eggs, and that no eggs have been recalled.

Cal-Maine separately announced fiscal third-quarter earnings Tuesday that surpassed analyst estimates, with strong consumer demand pushing egg sales to a record by volume. Shares climbed by about 7% in after-hours trading.

Eggs cost $2.47 a dozen last week, less than half the record high from December 2022, according to USDA data.

Copyright 2024 Bloomberg.

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