You already know that egg prices are at crazy-high levels because of bird flu, which caused millions of hens to be put down.
But that won’t leave you feeling over easy when I share that the country’s top egg producer, Cal-Maine Foods, just reported a massive increase in quarterly profit.
How massive? Try 718% higher.
What does that mean in dollar terms? A year ago, Cal-Maine pocketed $39.5 million in quarterly profit. This time around, $323 million.
Sherman Miller, the company’s president and CEO, called the latest returns “a solid performance,” which deserves some sort of prize for understatement.
“Our results are reflective of a dynamic market environment with higher average selling prices and favorable demand,” he said in a statement.
If you’re feeling like this is a rerun of the record profits oil companies reported amid high gas prices, you’re right.
And this is why some call for windfall profits taxes during such unusual external forces.
These are examples of companies riding market trends higher without doing anything special or innovative to enhance shareholder value.
They’re just lucky.
And who pays? Consumers, of course, who watch helplessly as an enormous wealth transfer takes place.
To be sure, there are booms and busts in all markets, cycles of profits and setbacks.
But a more than 700% increase in profit over a three-month period? That’s just nuts.
“We have worked hard to respond to the challenging operating environment, targeting optimal management of every aspect of our business within our control,” Miller said.
That’s undoubtedly true.
But think of it like this: If a slot machine is broken and keeps paying out, does that mean the user is an especially astute and skillful gambler?
No. It means the slot machine is broken.