The dynasty behind our Egg Giants hopes to make money with the profits of bird flu

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The largest households in control of the U.S. egg sellers are seeking to cash in a bird flu crisis, which has pushed prices to an all-time high.

The company’s securities filing shows that four daughters and the daughter of Cal-Maine Foods founder Fred R Adams JR have reached an agreement with the company to convert its supervote stock into common stock, thus giving up control before “potential diversification of personal financial portfolios.”

The family’s stake in Cal-Maine is held through a Shell company called Daughters LLC. At the end of Friday, the share was worth nearly $532 million, including $434 million in supervote stocks and another $98 million in common stock.

Meanwhile, Ridgeland, Mississippi-based Cal-Maine said it will conduct a $500 million stock buyback program, the first stock in two decades, and disclosed that it could use the program to “buy back some of the common stock of family members” because they sold their own shares.

The deal appears to smooth out the process of reducing or selling all of its shares for a family, said Ben Silverman, vice president of research at Veritydata. “It is not uncommon for companies to buy back shares from major shareholders,” he added.

Representatives of the company declined multiple requests for comment.

In wholesale markets this week, U.S. egg prices hit $8.58 per dozen in a severe bird flu outbreak, a 70% increase from the same period last year, commodity price information service expana said. According to the U.S. Department of Agriculture, the outbreak has caused farmers to seize 100 million chickens, turkeys and egg hens in the United States, which has caused egg shortages, and experts predict that prices will keep prices in the coming months in history.

In the crisis, last month’s California Food Food reported a fourfold increase in total quarterly profits a year ago at $356 million.

Adolphus “Dolph” Baker, Adams’ son-in-law and chairman of the board of directors of Cal-Maine, said in a statement that the family’s move to abandon control of the company “is a personal decision related to our respective financial and legacy planning efforts.”

According to his prosecutor in local newspapers, Adams is known as the Big Chicken, a six-foot offensive and defensive end of his high school soccer team. After a short career in college and feed sales, he founded Cal-Maine Foods in 1957, leased land outside Jackson, Mississippi, and started his first farm.

By the time he died in 2020, it had grown into a producer of one-tenth of eggs provided by the United States. His four daughters – Luanne Adams, a psychologist and board member of the Washington Ballet; Nancy Adams Briggs of Virginia; Laurel Adams Krodel of Tennessee; and Dinnette “Dea Dea” Adams Baker of Mississippi has since controlled the company. Dolph Baker is Dea Dea’s husband.

Super voting stocks have the same value as common stocks, but have 10 times the voting rights. The agreement will reduce the voting rights of families from 53.2% to 12%.

Stocks have risen 56% over the past year, hitting record highs in January, closing at $90.39 on Friday.

Advocates of small farmers accused Cal-Maine of restricting egg supplies in the United States. The company is one of a group of egg producers that is responsible for price fixation in 2023 and has been ordered to pay $53 million in losses to food manufacturers including Kraft Foods, General Mills and Nestlé. Cal-Maine and other egg producers have filed court documents seeking a new trial and a judgment is filed.

“Major egg producers, especially Cal-Maine food, use the crisis to raise prices, accumulate record profits and consolidate market power,” Advocacy group Farm Action wrote in a letter to the Federal Trade Commission and the Justice Department. “Although the high prices, the slow recovery of flock size further demonstrates a coordinated effort to limit supply and maintain inflationary prices.”

The U.S. announced a $1 billion effort this week to curb avian flu and lower egg prices, including importing eggs from other countries and reducing exports to alleviate shortages.