Cal-Maine Foods Inc. said Thursday that it is teaming up with
Rose Acre Farms Inc. to build a shell-egg facility in Texas, in an
effort to meet growing demand for cage-free and specialty eggs.
The complex, which could accommodate between 1.8 million and 2.9
million laying hens, is expected to begin initial operations by
August.
Cal-Maine and Rose Acre are both egg producers. Closely held
Rose Acre has wagered in recent years that the future lies in
cage-free, deciding that every facility it builds or refurbishes
will not have cages. The new plant will use Rose Acre Farms's
cage-free aviary designs.
Producers across the U.S. egg industry are grappling with new
state laws and food-company policies aimed at improving the
well-being of the country's more than 300 million egg-laying hens.
Revised rules target the cramped cages that have dominated the
industry for decades, enclosures that typically confine birds to 67
square inches each--smaller than a standard sheet of paper.
Cal-Maine Chief Executive Dolph Baker said in a news release the
joint venture with Rose Acre allows it to mitigate some of the
regulatory risk of the facility.
"Considering the uncertain regulatory framework in our industry
right now, it made sense to partner with Rose Acre Farms to share
the costs and mitigate the risk of such a large-scale aviary-style
egg production facility," Mr. Baker said.
Cage-free eggs fetch a premium--at times even doubling their
price--but it isn't clear how large the market will become, farmers
have said. Demand for cage-free eggs is small but growing.
Seventeen million U.S. egg-laying hens were cage-free as of
September--6% of the U.S. flock--up from 15 million three years
earlier, according to federal data.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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