Cal-Maine Joins With Rose Acre to Build Texas Egg Facility

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 [e-mail]

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