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Cal-Maine Foods to Acquire Egg Production Assets of Mahard Egg Farm

10/17/2019

In an October 17th release Cal-Maine Foods, Inc. announced that it has reached a definitive agreement to acquire substantially all of the shell-egg assets of Mahard Egg Farm, including production, processing, distribution. Subject to the completion of this transaction assets will include commercial shell egg production and processing facilities with current capacity for approximately 3.9 million laying hens and permitted capacity for up to 8.0 million laying hens, a feed mill, pullets and related production facilities located in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas.

 

Commenting on the announcement, Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., said, “We are very pleased to announce the acquisition of these assets from Mahard Egg Farm. Cal-Maine Foods already has a market presence in Texas, and, with the addition of these facilities located near the major market areas north of Dallas, we have an opportunity to reach more customers in Texas and southern Oklahoma with this additional production capacity. This proposed transaction is commensurate with our strategy to grow our business through selective acquisitions, as well as through expansion of our existing facilities. We look forward to the opportunity to extend our market reach and deliver greater value to both our customers and shareholders.”

Mahard Farms is a third-generation egg enterprise that adhered to traditional practices and standards at variance with the present industry. Their approach to biosecurity, maintenance, systems, welfare and marketing were more reminiscent of the 1960s than the present. It is evident that low prices for commodity eggs over a prolonged period depleted their working capital leading to the sale of the business. It is possible that the Mahard sale is a bellwether for mid- to large-sized, family-operated U.S. egg producers, predicating more consolidation