US egg prices have been declining over the past three weeks, dropping from above $8 to around $4 per dozen. The drop is attributed to “highly volatile” markets and consumers buying fewer eggs due to high prices. Despite a 1.7% increase in shell egg inventory, it may take time for producers to rebuild their flocks.
However, shares of America’s largest egg producer, Cal-Maine Foods, and Vital Farms are up 45% and 32%, respectively, in the past year. New Constructs’ David Trainer says Cal-Maine is an attractive stock due to its high revenue increase and strong demand trends.
The US market share for pasture-raised eggs has also seen significant gains, with Vital Farms benefiting from increased distribution and shelf space. However, Trainer prefers Cal-Maine over Vital Farms, citing a more stable valuation.
Egg producers face a balancing act between making higher profits and increasing supply to meet growing demand. Experts predict that egg prices will generally “ebb and flow” in the near term, but higher prices during Easter may cause a spike.
United States Agriculture Secretary Brooke Rollins has introduced a five-part strategy to combat avian flu outbreaks, which may impact egg prices. As a result, investors are looking to get in on shares of egg producers like Cal-Maine Foods and Vital Farms.
Source: https://finance.yahoo.com/news/egg-prices-are-dropping-but-egg-stocks-could-be-an-attractive-addition-to-the-basket-213424917.html