Cal-Maine Foods 10K 2023 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC

20549

FORM

10-K

☑

ANNUAL REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For The Fiscal Year

Ended

June 3, 2023

☐

TRANSITION REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number:

001-38695

CAL-MAINE FOODS, INC.

(Exact name of registrant as specified in its charter)

Delaware

64-0500378

(State or other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

1052 Highland Colony Pkwy, Suite 200

Ridgeland

Mississippi

39157

(Address of principal executive offices) (Zip Code)

(

601

)

948-6813

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on which registered:

Common Stock, $0.01 par value per share

CALM

The

NASDAQ

Global Select Market

Securities registered pursuant to Section 12 (g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.

Yes

☑

☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

☐

☑

Indicate by check mark whether the registrant (1)

has filed all reports required to be filed

by Section 13 or 15(d) of the

Securities Exchange Act

of 1934 during the preceding

12 months (or for such

shorter period that the registrant

was required to file such

reports), and (2) has

been subject

to such filing requirements for the past 90 days.

Yes

☑

☐

Indicate by check mark whether

the registrant has submitted

electronically every Interactive Data

File required to be

submitted pursuant to Rule

405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to

submit

such files).

Yes

☑

☐

Indicate

check

mark

whether

the

registrant

large

accelerated

filer,

accelerated

filer,

non-accelerated

filer,

smaller

reporting

company,

or an emerging

growth company.

See the definitions

of “large accelerated

filer,” “accelerated

filer”, “smaller reporting

company”,

and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an

emerging

growth company,

indicate by

check mark

if the

registrant has

elected not

to use

the extended

transition period

for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

☐

Indicate by

check mark

whether the registrant

has filed

a report on

and attestation

to its management's

assessment of

the effectiveness

of its

internal control over

financial reporting under

Section 404(b) of

the Sarbanes-Oxley Act

(15 U.S.C.

7262(b)) by the

registered public accounting

firm that prepared or issued its audit report.

☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes

☐

☑

The aggregate market value, as

reported by The NASDAQ Global Select

Market, of the registrant’s

Common Stock, $0.01 par value,

held by

non-affiliates

at November 25,

2022, which

was the

date of

the last

business day

of the

registrant’s

most recently

completed second

fiscal

quarter, was $

2,435,832,883

As of

July 25,

2023,

44,184,049

shares of

the registrant’s

Common Stock,

$0.01 par value,

and

4,800,000

shares of

the registrant’s

Class A

Common Stock, $0.01 par value, were outstanding.

DOCUMENTS INCORPORATED

BY REFERENCE

The information called

for by Part

III of this Form

10-K is incorporated

herein by reference

from the registrant’s

Definitive Proxy Statement

for its 2023

annual meeting of

stockholders which will be

filed pursuant to

Regulation 14A not later

than 120 days

after the end

of the fiscal

year covered by this report.

TABLE OF CONTENTS

Item

Page

Number

Part I

FORWARD -LOOKING STATEMENTS

Business

1A.

Risk Factors

1B.

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities

Reserved

Management’s Discussion and Analysis of Financial Condition and Results of Operations

7A.

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

9A.

Controls and Procedures

9B.

Other Information

9C.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Part III

10.

Directors, Executive Officers and Corporate Governance

11.

Executive Compensation

12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

13.

Certain Relationships and Related Transactions, and Director Independence

14.

Principal Accounting Fees and Services

Part IV

15.

Exhibit and Financial Statement Schedules

16.

Form 10-K Summary

Signatures

PART

FORWARD

-LOOKING STATEMENTS

This report contains numerous forward-looking statements within the meaning

of Section 27A of the Securities Act of 1933 (the

“Securities Act”) and

Section 21E of the

Securities Exchange Act

of 1934 (the “Exchange

Act”) relating to

our shell egg

business,

including estimated future production data, expected construction schedules, projected construction costs, potential future supply

of and demand

for our products,

potential future corn and

soybean price trends,

potential future impact

on our business

of inflation

and rising interest rates,

potential future impact on

our business of new legislation,

rules or policies, potential outcomes

of legal

proceedings, and other projected

operating data, including anticipated

results of operations

and financial condition. Such

forward-

looking statements are identified

by the use

of words such

as “believes,” “intends,” “expects,”

“hopes,” “may,” “should,” “plans,”

“projected,”

“contemplates,”

“anticipates,”

similar

words.

Actual

outcomes

results

could

differ

materially

from

those

projected in

the forward-looking statements.

The forward-looking

statements are based

on management’s

current intent, belief,

expectations, estimates,

and projections

regarding the

Company and

its industry.

These statements

are not

guarantees of

future

performance and involve

risks, uncertainties, assumptions,

and other factors

that are difficult

to predict and

may be beyond

our

control. The

factors that

could cause

actual results

to differ

materially from

those projected

in the

forward-looking

statements

include, among others, (i) the risk factors set forth in Item 1A Risk Factors and elsewhere in this report as well as those included

in other

reports we

file from

time to

time with

the Securities

and Exchange

Commission (the

“SEC”) (including

our Quarterly

Reports on Form 10-Q and Current Reports on Form 8-K), (ii) the risks and hazards inherent in the shell egg business (including

disease, pests,

weather conditions,

and potential

for product

recall), including

but not

limited to

the current

outbreak of

highly

pathogenic avian

influenza (“HPAI”)

affecting poultry

in the

United States

(“U.S.”), Canada

and other

countries that

was first

detected in commercial

flocks in the U.S.

in February 2022, (iii)

changes in the demand

for and market prices

of shell eggs and

feed costs, (iv)

our ability

to predict

and meet

demand for cage-free

and other specialty

eggs, (v)

risks, changes,

or obligations

that

could

result

from

our

future

acquisition

new

flocks

businesses

and

risks

changes

that

may

cause

conditions

completing

a pending

acquisition not

to be

met, (vi)

risks relating

to increased

costs, rising

inflation and

rising interest

rates,

which

began

response

market

conditions

caused

part

the

COVID-19

pandemic

and

which

generally

have

been

exacerbated by

the Russia-Ukraine

War

that began in

February 2022, (vii)

our ability to

retain existing customers,

acquire new

customers and grow

our product mix

and (viii) adverse

results in pending

litigation matters. Readers

are cautioned not

to place

undue

reliance

forward-looking

statements

because,

while

believe

the

assumptions

which

the

forward-looking

statements are based

are reasonable,

there can be

no assurance that

these forward-looking

statements will prove

to be accurate.

Further, forward-looking statements included herein

are only made as of the respective dates thereof, or if no date is stated, as of

the

date

hereof.

Except

as otherwise

required

law,

we disclaim

any

intent

obligation

update

publicly

these

forward-

looking statements, whether because of new information, future events, or

otherwise.

ITEM 1.

BUSINESS

Our Business

We are the largest

producer and distributor of shell eggs in the United States. Our mission is to be the most sustainable

producer

and reliable

supplier of

consistent, high

quality fresh

shell eggs

and egg

products

in the

country,

demonstrating

a "Culture

Sustainability" in everything we do, and

creating value for our shareholders,

customers, team members and communities. We sell

most of our shell

eggs in the southwestern,

southeastern, mid-western and

mid-Atlantic regions of the

U.S. and aim to maintain

efficient, state-of-the-art operations located close to our customers. We

were founded in 1957 by the late Fred R. Adams, Jr. and

are headquartered in Ridgeland, Mississippi.

The Company has one reportable

operating segment, which is the production,

grading, packaging, marketing and distribution

shell eggs. Our integrated

operations consist of hatching

chicks, growing and maintaining

flocks of pullets, layers

and breeders,

manufacturing feed, and

producing, processing, packaging, and

distributing shell eggs.

Layers are mature

female chickens, pullets

are female chickens usually less than 18 weeks of age, and breeders are male and female chickens used to produce fertile eggs to

be hatched for egg production

flocks. Our total flock as of

June 3, 2023 consisted of approximately

41.2 million layers and 10.8

million pullets and breeders.

Many of our customers rely

on us to provide most of

their shell egg needs, including

specialty and conventional eggs.

Specialty

eggs encompass

a broad

range of

products. We

classify cage-free,

organic,

brown, free-range,

pasture-raised

and nutritionally

enhanced

as specialty

eggs

for

accounting

and

reporting

purposes.

classify

all other

shell

eggs

as conventional

products.

While we report separate sales information

for these egg types, there are

many cost factors that are not

specifically available for

conventional or

specialty eggs

due to

the nature

of egg

production. We

manage our

operations and

allocate resources

to these

types of eggs on a consolidated basis based on the demands of our customers.

believe that

an important

competitive advantage

for Cal-Maine

Foods is our

ability to meet

our customers’

evolving needs

with a

favorable product

mix of

conventional and

specialty eggs,

including cage-free,

organic and

other specialty

offerings, as

well

as egg

products.

have

also

enhanced

our efforts

to provide

free-range

and pasture

-raised

eggs that

meet

consumers’

evolving choice preferences.

While a small

part of our

current business,

the free-range and

pasture-raised eggs

we produce and

sell represent

attractive

offerings

to a

subset of

consumers, and

therefore

our customers,

and

help us

continue

to serve

as the

trusted provider of quality food choices.

Throughout the Company’s history,

we have acquired other companies in our industry. Since 1989 through our fiscal year ended

June 3, 2023,

we have completed

23 acquisitions ranging

in size from

160 thousand layers to

7.5 million layers. Most

recently,

effective on May 30, 2021, the Company acquired

the remaining 50% membership interest in Red River Valley

Egg Farm, LLC

(“Red River”), which owns and operates a specialty shell egg production complex that includes 1.7 million cage-free hens. For a

further

description

this

transaction,

refer

Part

II.

Item

Notes

the

Consolidated

Financial

Statements,

Note 2 –

Acquisition

. We are also focused on additional ways to enhance our product mix and support new opportunities in the restaurant,

institutional and

commercial food

preparation area.

Beginning in fiscal

2022, we have

invested approximately

$32.3 million in

Meadowcreek Foods,

LLC (“Meadowcreek”),

an egg

products operation

focused on

offering

hard-cooked eggs.

In addition

growth through

acquisitions, we

have also

grown by

making substantial

investments in

our business,

primarily to

increase our

cage-free production capacity.

When

use

“we,”

“us,”

“our,”

the

“Company”

this

report,

mean

Cal-Maine

Foods,

Inc.

and

our

consolidated

subsidiaries,

unless

otherwise

indicated

the

context

otherwise

requires.

The

Company’s

fiscal

year-end

the

Saturday

closest to May

31. Our

fiscal year

2023 and

fourth quarter ended

June 3, 2023,

included 53 weeks

and 14

weeks, respectively.

The first three fiscal quarters of fiscal 2023 ended August 27, 2022,

November 26, 2022, and February 25, 2023, all included 13

weeks.

All references herein to a fiscal year means our fiscal year and all references

to a year mean a calendar year.

Industry Background

According to the U.S.

Department of Agriculture (“USDA”) Agricultural

Marketing Service, in 2022 approximately

71% of table

eggs produced in the U.S.

were sold as shell

eggs, with 56.6% sold through food

at home outlets such

as grocery and convenience

stores, 12.4% sold to

food-away-from home channels such

as restaurants and 1.7% exported.

The USDA estimated that in

2022

approximately 29.6%

of eggs

produced in

the U.S.

were sold

as egg

products (shell

eggs broken

and sold

in liquid,

frozen, or

dried

form)

institutions

(e.g.

companies

producing

baked

goods).

For

information

about

egg

producers

the

U.S.,

see

“Competition” below.

Our

industry

has

been

greatly

impacted

the

outbreaks

highly

pathogenic

avian

influenza

(“HPAI”),

first

detected

commercial flocks in

the U.S. in

February 2022 and

continuing during our

fiscal 2023. For

additional information regarding HPAI

and its impact

on our industry

and business, see

Part II. Item 7. Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Given

historical

consumption

trends,

we believe

that general

demand

for

eggs in

the U.S.

increases basically

in line

with the

overall

U.S.

population

growth;

however,

specific

events

can

impact

egg

supply

and

consumption

particular

period,

occurred with the 2015 HPAI outbreak,

the COVID-19 pandemic (particularly during 2020), and the most recent HPAI

outbreak

starting in

early 2022.

According to

the USDA’s

Economic Research

Service, estimated

annual per

capita consumption

in the

United States between 2018

and 2022 varied, ranging from 279 to 292 eggs. In calendar year 2022,

per capita U.S. consumption

was estimated to

be 279 eggs,

or approximately 5.4

eggs per

person per week.

According to

the USDA,

the decline in

consumption

was primarily

due to limited

availability caused

by the outbreak

of HPAI.

As of July

18, 2023,

the USDA projects

that the

per

capita consumption

will increase

in calendar

year 2023

and 2024

to 282.6

and 292.7,

respectively.

The USDA

calculates per

capita consumption by dividing

total shell egg disappearance in the U.S. by the U.S. population.

Prices for Shell Eggs

Wholesale shell

egg sales

prices are

a critical

component of

revenue for

the Company.

Wholesale shell

egg prices

are volatile,

cyclical, and impacted

by a number

of factors, including

consumer demand, seasonal

fluctuations, the number

and productivity

of laying hens

in the U.S.

and outbreaks of

agricultural diseases such

as HPAI.

While we use

several different pricing mechanisms

in pricing

agreements with

our customers,

we believe

the majority

of conventional

shell eggs

sold in

the U.S.

in the

retail and

foodservice channels

are sold

at prices

that take

into account,

in varying

ways, independently

quoted wholesale

market prices,

such as those published

by Urner Barry Publications,

Inc. (“UB”) for shell

eggs, however, grain-based and cost

plus arrangements

are being

utilized in

the food

service channel

and some

western markets.

sell the

majority of

our conventional

shell eggs

based on formulas that take into account, in varying ways, independently

quoted regional wholesale market prices for shell eggs

or formulas related

to our costs of production,

which include the cost

of corn and soybean

meal. We

do not sell eggs

directly to

consumers or set the prices at which eggs are sold to consumers.

The weekly

average price for

the southeast region

for large white

conventional shell

eggs as quoted

by UB is

shown below for

the past three

fiscal years along

with the five-year average

price. As further

discussed in

Part II. Item 7. Management’s Discussion

and Analysis – Results of Operations

, conventional

shell egg prices

rose during

the fourth quarter

of fiscal 2022

and first three

quarters of fiscal

2023, due

to the reduced

supply related

to the HPAI

outbreak first

detected in

commercial flocks

in February

2022,

steady shell egg demand

and higher production costs. Conventional shell

egg prices continued to rise

into the fourth quarter

of fiscal 2023 followed by a substantial decline,

as demand for shell eggs began to decrease in line

with typical seasonal variance

and as

supply increased

due to

the repopulating

of HPAI

-affected

layer flocks.

The actual

prices that

we realize

on any

given

transaction will not necessarily equal quoted market prices because of

the individualized terms that we negotiate with individual

customers which are influenced by many factors. Depending on market conditions, input costs

and individualized

contract terms,

the price we receive

per dozen eggs in any

given transaction may be

more than or less than

our farm production and

other costs

per dozen.

Specialty eggs

are typically

sold at

prices and

terms negotiated

directly with

customers. Historically,

prices for

specialty eggs

have

experienced

less

volatility

than

prices

for

conventional

shell

eggs

and

have

generally

been

higher

due

customer

and

consumer willingness to pay more for specialty eggs. However, throughout most of

fiscal 2023 conventional egg prices exceeded

specialty egg prices. Conventional

egg prices generally respond

more quickly to market conditions

because we sell the majority

of our conventional

shell eggs based on

formulas that adjust periodically

and take into account,

in varying ways, independently

quoted regional wholesale market prices for shell eggs or

formulas related to our costs of

production. Because the majority of our

specialty eggs

are typically

sold at prices

and terms negotiated

directly with

customers, specialty

egg prices

do not fluctuate

much as conventional pricing.

Feed Costs for Shell Egg Production

Feed is a primary cost component in

the production of shell eggs and

represented 63.1% of our fiscal 2023 farm

production costs.

routinely fill

our storage

bins during

harvest season

when prices

for feed

ingredients, primarily

corn and

to a

lesser extent

soybean meal,

are generally

lower.

ensure continued

availability of

feed ingredients,

we may

enter into

contracts for

future

purchases

corn

and

soybean meal,

and

as part

of these

contracts,

may

lock-in

the basis

portion

of our

grain

purchases

several months in advance.

Basis is the difference between the local cash price for grain and the applicable futures price. A basis

contract is a common transaction in the grain market that allows us to lock-in a basis level for a specific delivery period and wait

to set

the futures

price at

a later

date. Furthermore,

due to

the more

limited supply

for organic

ingredients,

we may

commit to

purchase organic ingredients in advance to help assure supply.

Ordinarily, we do not enter into long-term contracts beyond a year

purchase

corn

and

soybean

meal

hedge

against

increases

the

prices

corn

and

soybean

meal.

the

quality

and

composition of feed is a critical factor in the nutritional value of shell eggs and health of our chickens, we formulate

and produce

the vast

majority of

our own

feed at

our feed

mills located

near our

production plants.

Our annual

feed requirements

for fiscal

2023 were 2.0 million tons of finished

feed, of which we manufactured 1.9 million

tons. We currently

have the capacity to store

182 thousand tons of corn and soybean meal, and we replenish these stores as needed

throughout the year.

Our primary feed ingredients, corn

and soybean meal, are commodities subject

to volatile price changes due to

weather, various

supply and

demand factors,

transportation and

storage costs,

speculators and

agricultural, energy

and trade

policies in

the U.S.

and internationally and most recently

the Russia-Ukraine War.

While we do not import corn

or soy directly from the region,

the

Russia-Ukraine War

has had

a negative

impact on

the worldwide

supply of

grain, including

corn, putting

upward pressure

prices.

purchase

the

vast

majority

our

corn

and

soybean

meal

from

U.S

sources

but

may

forced

purchase

internationally

when

U.S.

supplies are

not

readily

available.

Feed

grains

are

currently

available

from

adequate

number

sources in the U.S. As a point

of reference, a multi-year comparison

of the average of daily closing prices

per Chicago Board of

Trade for each period in our fiscal calendar are

shown below for corn and soybean meal:

Shell Egg Production

Our percentage of dozens produced to sold

was 92.3%

of our total shell eggs sold in fiscal 2023,

with 91.8% of such production

coming from company-owned facilities,

and 8.2% from contract

producers. Under a

typical arrangement with

a contract producer,

own

the

flock,

furnish

all feed

and

critical

supplies,

own

the

shell

eggs

produced

and

assume

market

risks.

The contract

producers own and operate their facilities and are paid a fee based on production

with incentives for performance.

The commercial production of shell eggs requires a source of baby chicks for laying flock replacement. We hatch the majority of

our chicks in

our own breeder

farms and hatcheries

in a

computer-controlled environment and obtain

the balance from

commercial

sources. The chicks are grown in our own pullet farms and are placed into the laying

flock once they reach maturity.

After eggs are

produced, they are

cleaned, graded and

packaged. Substantially all

our farms have

modern “in-line” facilities

which

mechanically

gather,

clean,

grade

and

package

the

eggs

the

location

where

they

are

laid.

The

in-line

facilities

generate

significant efficiencies

and cost

savings compared

to the

cost of

eggs produced

from non-in-line

facilities, which

process eggs

that

have

been

laid

another

location

and

transported

to the

processing

facility.

The

in-line

facilities

also

produce

higher

percentage of USDA Grade A eggs, which sell at higher prices. Eggs

produced on farms owned by contractors are brought to our

processing plants

to be graded

and packaged.

Because shell eggs

are perishable,

we do not

maintain large

egg inventories. Our

egg

inventory

averaged

six

days

sales

during

fiscal

2023.

believe

our

constant

focus

production

efficiencies

and

automation throughout the supply chain enable us to be a low-cost supplier

in our markets.

are proud

to have

created and

upheld

what we

believe is

a leading

poultry

Animal Welfare

Program

(“AWP”).

have

aligned our AWP with

regulatory, veterinary

and our third-party certifying bodies’ guidance to govern welfare of

animals in our

direct care, our contract farmers’ care and our farmer-suppliers’

care. We continually

review our program to monitor and evolve

standards that guide how we hatch chicks, rear pullets and nurture

breeder and layer hens. At each stage of

our animals’ lives, we

are dedicated to providing welfare conditions aligned

to our commitment to the principles of the internationally

recognized

Five

Freedoms of Animal Welfare

. Our standards apply to

our enterprise and are

tailored for our owned and

contract grower operations

with oversights and approvals from senior members of our compliance team.

do not

use artificial

hormones in

the production

of our

eggs. Hormone

use in

the poultry

and egg

production industry

has

been

effectively

banned

the U.S.

since

the

1950s.

have

extensive

written

protocol

that

allows

the

use

medically

important

antibiotics

only

when

animal

health

risk,

consistent

with

guidance

from

the

United

States

Food

and

Drug

Administration

(“FDA”)

and

the

Guidance

for

Judicious

Therapeutic

Use

Antimicrobials

Poultry,

developed

the

American Association of Avian Pathologists. When antibiotics are medically necessary, a licensed veterinary

doctor will approve

and administer approved doses for a restricted period. Our programs are designed to ensure antibiotics are ordered and used only

when necessary and records of their usage – when and where – are maintained to monitor compliance with our protocols. We

not use antibiotics for growth promotion or performance enhancement.

Specialty Eggs

are

one

the

largest

producers

and

marketers

value-added

specialty

shell

eggs

the

U.S.,

which

continues

significant and growing segment

of the market.

We classify cage-free, organic, brown, free-range, pasture-raised and

nutritionally

enhanced as specialty eggs for accounting and

reporting purposes. Specialty eggs are intended to

meet the demands of consumers

sensitive to environmental, health and/or animal welfare issues and

to comply with state requirements for cage-free eggs.

As defined by the USDA, eggs packed in USDA grade

marked consumer packages labeled as cage-free are

laid by hens that are

able to roam vertically and horizontally in indoor houses and have access to fresh food and water.

Cage-free systems must allow

hens to

exhibit natural

behaviors and

include enrichments

such as

scratch areas,

perches and

nests. Hens

must have

access to

litter, protection from predators and be

able to move in a barn in a manner that promotes bird welfare.

Ten

states

have

passed

legislation

regulations

mandating

minimum

space

cage-free

requirements

for

egg

production

mandated the sale of

only cage-free eggs and

egg products in

their states, with implementation

of these laws ranging

from January

2022 to January 2026. These states represent approximately 27% of the U.S. total population according to the 2020 U.S. Census.

California,

Massachusetts, and Colorado, which collectively represent approximately 16% of the total estimated

U.S. population

have cage-free legislation in effect currently.

In May 2023, the U.S. Supreme Court upheld as

constitutional California’s law that

requires the sale of

only cage-free eggs

in that state and

regardless of the state

in which the eggs

are produced. Although

we do

not sell the majority of our eggs in these ten states, these state laws have impacted

egg production practices nationally.

A significant number of our customers previously announced goals to

offer cage-free eggs exclusively on or before 2026, subject

in most cases to availability of supply,

affordability and consumer demand, among other contingencies. Some of these customers

have recently

changed those

goals to

offer 70%

cage-free eggs

by the

end of

2030. Our

customers typically

do not

commit to

long-term purchases

of specific quantities

or types of

eggs with us,

and as a

result, it is

difficult to

accurately predict

customer

requirements for cage-free eggs. We are focused on adjusting our cage-free production capacity with a goal of meeting the future

needs of our customers in light of changing

state requirements and our customer’s

goals. As always, we strive to offer a product

mix that aligns with current and anticipated customer purchase decisions. We are engaging with our customers to help them meet

their announced goals and needs. We have invested significant capital in

recent years to acquire and construct

cage-free facilities,

and we expect our focus for future expansion will continue

to include cage-free facilities. Our volume of cage-free egg sales has

continued to increase and account for a larger share of our product mix. Cage-free sales represented approximately 20.1% of our

total net

shell sales

for

fiscal

year

2023.

At the

same time,

we understand

the importance

of our

continued

ability to

provide

conventional eggs in order to provide our customers with a variety

of egg choices and to address hunger in our communities.

We are a member of the Eggland’s

Best, Inc. cooperative (“EB”) and produce, market, distribute and sell

Egg-Land’s

Best®

and

Land O’

Lakes®

branded eggs

under license

from EB at

our facilities under

EB guidelines.

Land O’

Lakes®

branded eggs

are

produced by hens that are fed a

whole-grain vegetarian diet. Our

Farmhouse Eggs

® brand eggs are produced at our

facilities by

cage-free hens

that are

provided with

a vegetarian

diet. We

market organic,

vegetarian and

omega-3 eggs

under our

4-Grain®

brand, which

consists of

conventional and

cage-free eggs.

also produce,

market and

distribute private

label specialty

shell

eggs to several customers.

Egg Products

Egg products are shell eggs broken

and sold in liquid, frozen, or

dried form. We

sell liquid and frozen egg products

primarily to

the institutional, foodservice and food manufacturing sectors in the U.S. Our egg products are primarily

sold through our wholly

owned subsidiaries American Egg Products, LLC located in Georgia

and Texas Egg Products, LLC located

in Texas.

During March 2023,

MeadowCreek Food,

LLC (“Meadowcreek”),

a majority-owned subsidiary,

began operations with

a focus

on being a

leading provider of

hard-cooked eggs. We

serve as the

preferred provider to

supply specialty and

conventional eggs

that MeadowCreek

needs to

manufacture egg

products. MeadowCreek’s

marketing plan

is designed

to extend

our reach

in the

foodservice and retail marketplace and bring

new opportunities in the restaurant,

institutional and industrial food products arenas.

Summary of Conventional and Specialty Shell Egg and Egg Product

Sales

The

following

table

sets

forth

the

contribution

percentage

revenue

and

volumes

dozens

sold

conventional

and

specialty shell egg and egg product sales for the following fiscal years:

2023

2022

2021

Revenue

Volume

Revenue

Volume

Revenue

Volume

Conventional Eggs

65.2

65.3

59.8

69.0

56.8

73.2

Specialty Eggs

Egg-Land’s Best®

14.7

16.6

19.2

15.9

20.9

13.5

Other Specialty Eggs

15.7

18.1

17.3

15.1

19.1

13.3

Total Specialty Eggs

30.4

34.7

36.5

31.0

40.0

26.8

Egg Products

3.9

3.4

2.7

Marketing and Distribution

In fiscal 2023, we sold our shell eggs in 38 states through

the southwestern, southeastern, mid-western and mid-Atlantic regions

of the U.S.

through our extensive

distribution network

to a diverse group

of customers, including

national and regional

grocery

store chains,

club stores,

companies servicing

independent supermarkets

in the

U.S., foodservice

distributors and

egg product

consumers. Some of

our sales

are completed through

co-pack agreements –

a common practice

in the

industry whereby production

and

processing of

certain products

are outsourced

to another

producer.

Although we

face intense

competition

from numerous

other companies,

we believe

that we

have the

largest market

share for

the sale

of shell

eggs in

the grocery

segment, including

large U.S. food retailers.

The majority of eggs sold are based on the daily

or short-term needs of our customers. Most sales to established

accounts are on

payment terms ranging from

seven to 30

days. Although we

have established long-term relationships

with many of

our customers,

most of them are free to acquire shell eggs from other sources.

The shell eggs we

sell are either delivered to

our customers’ warehouse or retail

stores, by our own

fleet or contracted refrigerated

delivery trucks, or are picked up by our customers at our processing facilities.

are a member

of the Eggland’s

Best, Inc. cooperative

and produce, market,

distribute and

sell

Egg-Land’s

Best®

and

Land

O’ Lakes®

branded eggs directly and through

our joint ventures, Specialty

Eggs, LLC and Southwest

Specialty Eggs, LLC, under

exclusive

license

agreements

Alabama,

Arizona,

Florida,

Georgia,

Louisiana,

Mississippi

and

Texas,

and

portions

Arkansas, California,

Nevada, North

Carolina,

Oklahoma and

South Carolina.

also have

an exclusive

license in New

York

City in addition

to exclusivity in

select New York

metropolitan areas, including

areas within New

Jersey and Pennsylvania.

discussed above under “Specialty Eggs,” we also sell our own Farmhouse

Eggs® and 4Grain® branded eggs.

During

2022,

the

Company

joined

the

formation

new

egg

farmer

cooperative

the

western

United

States.

ProEgg,

Inc.(“ProEgg”) is comprised

of leading egg production

companies, including Cal-Maine

Foods, servicing retail and

foodservice

shell egg customers in 13 western states. ProEgg is a producer-owned

cooperative organized under the Capper-Volstead

Act.

The Company’s

top priority in joining

as a member of

ProEgg is serving

our valued customers in

this important market

region.

Our

membership

ProEgg

expected

provide

benefits

for

its

customers,

including

supply

chain

stability

and

enhanced

reliability. Initially,

Cal-Maine Foods’ customer relationships and customer support are expected to remain the same. We

expect

that starting January

1, 2024, each

producer member

will sell through

ProEgg the

shell eggs it

produces for

sale in the

western

states covered by the cooperative. Customers will

have a single point of

contact for their shell egg

purchases, as ProEgg will have

a dedicated team to market and sell the members’ combined egg production

in the region.

Customers

Our top

three customers

accounted for

an aggregate of

50.1%, 45.9%

and 48.6% of

net sales dollars

for fiscal 2023

2022, and

2021,

respectively.

Our largest

customer,

Walmart

Inc. (including

Sam's Club),

accounted for

34.2%, 29.5%

and 29.8%

of net

sales dollars for fiscal 2023, 2022 and 2021, respectively.

In fiscal 2023,

approximately 85.3% of

our revenue related

to sales to retail

customers, 10.8% to

sales to foodservice

providers

and 3.9%

to egg products

sales. Retail customers

include primarily

national and

regional grocery

store chains,

club stores, and

companies

servicing

independent

supermarkets

in the

U.S. Foodservice

customers

include

primarily

companies that

sell food

products and related items to restaurants, healthcare and education facilities and

hotels.

Competition

The production, processing,

and distribution of shell

eggs is an intensely

competitive business, which

has traditionally attracted

large numbers of

producers in the United

States. Shell egg competition

is generally based on

price, service and product

quality.

The shell

egg production

industry remains

highly fragmented.

According to

Egg Industry

Magazine

, the

ten largest

producers

owned approximately

53% of industry

table egg layer

hens at year-end

2022 and 2021.

believe industry

consolidation may

continue,

and

plan

capitalize

opportunities

they

arise.

believe

further

concentration

could

result

reduced

cyclicality of shell egg prices, but no assurance can be given in that regard.

Seasonality

Retail sales of shell eggs historically have been highest during the fall and winter months and lowest during the summer months.

Prices for shell eggs fluctuate

in response to seasonal demand

factors and a natural

increase in egg production during

the spring

and early summer.

Historically,

shell egg prices tend

to increase with the

start of the school

year and tend

to be highest prior

holiday

periods,

particularly

Thanksgiving,

Christmas

and

Easter.

Consequently,

and

all

other

things

being

equal,

would

expect to experience

lower selling prices,

sales volumes and net

income (and may

incur net losses) in

our first and

fourth fiscal

quarters ending in August/September and May/June, respectively. Accordingly, we generally expect our need for

working capital

to be highest during those quarters.

Growth Strategy

Our growth strategy is focused on remaining a

low-cost provider of shell eggs located near

our customers, offering our customers

choices

that

meet

their

requirements

for

eggs

and

egg

products

and

continuing

grow

our

focus

specialty

eggs

and

egg

products. For example, our

recent investment in MeadowCreek,

discussed under the heading

“Egg Products” above, is

intended

extend

our

reach

the

foodservice

and

retail

marketplace

and

bring

new

opportunities

the

restaurant,

institutional

and

industrial food products arenas.

In light

of the growing

customer demand

and increased

legal requirements

for cage-free

eggs, we

intend to

continue to

closely

evaluate the

need to expand

through selective acquisitions,

with a priority

on those that

will facilitate our

ability to expand

our

cage-free shell

egg production

capabilities in

key locations

and markets.

will also

continue to

closely evaluate

the need

continue to expand and convert

our own facilities to increase production

of cage-free eggs based on

a timeline designed to meet

the anticipated

needs of

our customers

and comply

with evolving

legal requirements.

As the

ongoing

production

of cage-free

eggs

costly

than

the

production

conventional

eggs,

aligning

our

cage-free

production

capabilities

with

changing

demand for cage-free eggs is important to the success of our business.

Trademarks

and License Agreements

We own the trademarks

Farmhouse Eggs®

Sunups®

Sunny Meadow®

and

4Grain®

. We produce and

market

Egg-Land's Best

and

Land O’ Lakes

® branded eggs under

license agreements with

EB. We

believe these trademarks

and license agreements

are

important to our business.

Government Regulation

Our facilities and

operations are subject

to regulation by

various federal, state,

and local agencies,

including, but not

limited to,

the FDA,

USDA, Environmental

Protection

Agency (“EPA

”), Occupational

Safety and

Health Administration

("OSHA") and

corresponding state agencies or

laws. The applicable regulations relate

to grading, quality control,

labeling, sanitary control and

reuse or

disposal of

waste. Our

shell egg

facilities are

subject to

periodic USDA,

FDA, EPA

and OSHA

inspections. Our

feed

production facilities are

subject to FDA,

EPA

and OSHA regulation

and inspections. We

maintain our own

inspection program

monitor

compliance

with

our

own

standards

and

customer

specifications.

possible

that

will

required

incur

significant

costs

for

compliance

with

such

statutes

and

regulations.

the

future,

additional

rules

could

proposed

that,

adopted, could increase our costs.

Ten

states

have

passed

legislation

regulations

mandating

minimum

space

cage-free

requirements

for

egg

production

mandated the sale of

only cage-free eggs and

egg products in

their states, with implementation

of these laws ranging

from January

2022 to January 2026. These states represent approximately 27% of the U.S. total population according to the 2020 U.S. Census.

California,

Massachusetts, and Colorado, which collectively represent approximately 16% of the total estimated

U.S. population

have cage-free legislation in effect currently.

In May 2023, the U.S. Supreme Court upheld as

constitutional California’s law that

requires the sale of only cage-free eggs in that state and regardless of the

state in which the eggs are produced.

Environmental Regulation

Our operations and facilities are subject to various federal, state, and local environmental, health and safety laws and regulations

governing,

among

other

things,

the

generation,

storage,

handling,

use,

transportation,

disposal,

and

remediation

hazardous

materials. Under these laws and regulations, we must obtain permits from governmental authorities,

including, but not limited to,

wastewater discharge

permits. We

have made, and

will continue to make,

capital and other expenditures

relating to compliance

with existing environmental, health and safety laws and regulations and permits. We are not currently aware of any major capital

expenditures

necessary

comply

with

such

laws

and

regulations;

however,

environmental,

health

and

safety

laws

and

regulations are becoming

increasingly more stringent,

including those relating to

animal wastes and wastewater discharges,

it is

possible that we will have to incur significant costs for compliance with such

laws and regulations in the future.

Human Capital Resources

As of June 3, 2023, we had 2,976 employees, of whom 2,305 worked in egg production, processing,

and marketing, 207 worked

feed

mill operations

and 464, including

our

executive officers,

were

administrative

employees. Approximately

5.4% of

our

personnel

are

part-time, and we

utilize

temporary

employment

agencies

and

independent

contractors

augment

our

staffing needs when necessary. For fiscal 2023, the average monthly full-time

equivalent for contingent workers was

1,349. None

of our employees are covered by a collective bargaining

agreement. We consider

our relations with employees to be good.

Culture and Values

are

proud

be contributing corporate

citizens

where

we live

and

work and to

help create healthy,

prosperous

communities. Our

colleagues

help

continue

enhance our community

contributions,

which are driven

our longstanding culture that strives to promote an environment that upholds integrity and respect and provides opportunities for

each colleague to

realize full potential. These

commitments are encapsulated

in the

Cal-Maine Foods Code

of Ethics and

Business

Conduct

and in our

Human Rights Statement

Health and Safety

Our top priority is the

health and safety of our

employees, who continue to produce

high-quality,

affordable egg choices for

our

customers and contribute to

a stable food

supply. Our enterprise safety committee

comprises two corporate safety managers,

eight

area compliance managers

(three specifically for

worker health

and safety),

55 local site

compliance managers, feed

mill managers

and general managers.

The committee that

oversees health and safety regularly reviews

our written policies and

changes to OSHA

regulation standards and shares information as it relates to outcomes from incidents in order to improve future performance. The

committee’s

goals

include

working

help

ensure

that

our

engagements

with

our consumers,

customers,

and

regulators

evidence our strong commitment to our workers’ health and safety.

Our commitment to our colleagues’ health includes a strong

commitment to on-site worker safety,

including a focus on accident

prevention and life safety.

Our Safety and Health Program

is designed to promote best

practices that help prevent

and minimize

workplace accidents and illnesses. The scope of our Safety and

Health Program applies to all enterprise colleagues. Additionally,

help

protect

the health

and well-being

our

colleagues and

people

in our

value

chain,

require

that any

contractors

vendors

acknowledge

and

agree

comply

with

the

guidelines

governed

our

Safety

and

Health

Program.

each

our

locations, our general managers are expected to

uphold and implement our Safety and Health Program in alignment

with OSHA

requirements. We

believe that

this program,

which is reviewed

annually by

our senior management

team, contributes

to strong

safety outcomes. As part of our

Safety and Health Program, we conduct multi-lingual training that

covers topics such as slip-and-

fall avoidance, respiratory protection, prevention of

hazardous communication of chemicals, the

proper use of personal

protective

equipment, hearing

conservation, emergency

response, lockout

and tagout

of equipment

and forklift

safety,

among others.

have

also

installed dry

hydrogen

peroxide biodefense

systems

our

processing

facilities

help

protect

our

colleagues’

respiratory health. To help drive

our focus on

colleague safety, we developed safety

committees at each

of our sites

with employee

representation from each department.

review

the success

of our

safety programs

on a

monthly basis

to monitor

their effectiveness

and

the development

of any

trends that need to

be addressed. During fiscal

year 2023

our recordable incident rates

decreased by 29% compared to

fiscal 2022.

Diversity, Equity and Inclusion

Our

culture seeks

embrace the

diversity

and

inclusion

all

our

team

members.

This

culture is driven

our

board

and

executive management team. Our board comprises seven members, four of

whom are independent. Women comprise 29% of our

board and 14% of our

board members identify as a

racial or ethnic

minority. As

of June 3, 2023,

our total workforce comprised

29% women and 53%

of colleagues who

identify as racial or

ethnic minorities. Our Policy

against Harassment, Discrimination,

Unlawful

Unethical

Conduct

and

Retaliation;

Reporting

Procedure affirms

our

commitment

supporting

our

employees

regardless of race, color, religion, sex, national

origin or any other basis protected by applicable law.

Cal-Maine Foods strives

to ensure that

our colleagues are

treated equitably. We are an Equal

Opportunity Employer that prohibits,

by policy and practice,

any violation of applicable

federal, state, or local

law regarding employment.

Discrimination because of

race, color, religion,

sex, pregnancy, age,

national origin, citizenship status, veteran

status, physical or mental disability,

genetic

information, or any other basis protected by applicable law

is prohibited. We value diversity in our workplaces or in

work-related

situations. We maintain

strong protocols to help our colleagues perform

their jobs free from harassment and discrimination. Our

focus

equitable

treatment

extends

recruitment,

employment

applications,

hiring,

placement,

job

assignments,

career

development, training, remuneration,

benefits, discharge

and other matters

tied to terms and

conditions of employment.

are

committed

offering

our

colleagues

opportunities

commensurate

with

our

operational

needs,

their

experiences,

goals

and

contributions.

Recruitment, Development and Retention

believe

in compensating

our

colleagues

with

fair

and competitive wages, in

addition

to offering

competitive benefits. Approximately 76% of our employees

are paid at hourly rates, which are all paid at rates above

the federal

minimum

wage

requirement.

offer

our

full-time

eligible

employees

range

benefits,

including

company-paid

life

insurance. The Company provides a comprehensive self-insured health plan and pays approximately 84% of the costs of the plan

for

participating

employees

and

their

families

December

31,

2022. Recent

benchmarking

our health

plan

indicates comparable

benefits, at

lower

employee contributions, when compared

to an applicable

Agriculture

and

Food Manufacturing sector grouping, as well as peer group data.

In addition, we offer employees the opportunity to purchase an

extensive range of other group

plan benefits, such as dental, vision,

accident, critical illness, disability

and voluntary life.

After

one

year

employment, full-time employees

who

meet

eligibility

requirements may

elect

to participate

our

KSOP retirement plan,

which

offers

range

investment

alternatives

and

includes

many positive features,

such

automatic enrollment with scheduled

automatic contribution

increases and loan

provisions. Regardless of

the

employees’ elections

to contribute

the

KSOP,

the

Company contributes shares

of Company

stock or

cash

equivalent

to 3%

of participants’ eligible compensation for each pay period that hours

are worked.

provide

extensive

training

and

development related

safety,

regulatory

compliance,

and

task

training.

invest

developing our future leaders through our Management Intern, Management

Trainee and informal mentoring programs.

Sustainability

We understand that climate, and

the potential consequences of climate change, freshwater availability and preservation of global

biodiversity, in addition to

responsible management of

our flocks, are

vital to

the production of

high-quality eggs and

egg products

and to the success of our

Company. We have engaged in agricultural production for

more than 60

years. Our agricultural practices

continue to evolve as we continue to strive to meet the need for nutritious, affordable foods to feed a growing population even as

we exercise responsible

natural resource stewardship. We plan to publish our most recent sustainability report on or around early

August 2023, which

will be available

on our website.

Information contained

on our website is

not a part

of this report

on Form

10-K.

Our Corporate Information

maintain

website

www.calmainefoods.com

where

general

information

about

our

business

and

corporate

governance

matters is

available. The

information contained

in our

website is

not a

part of

this report.

Our Annual

Reports on

Form 10-K,

Quarterly Reports on

Form 10-Q, Current Reports

on Form 8-K, proxy

statements, and all amendments

to those reports filed

furnished pursuant

to Section

13(a) or

15(d) of

the Exchange

Act are

available, free

of charge,

through our

website as

soon as

reasonably

practicable

after

file

them

with,

furnish

them

to,

the

SEC.

addition,

the

SEC

maintains

website

www.sec.gov

that

contains

reports,

proxy

and

information

statements,

and

other

information

regarding

issuers

that

file

electronically with the SEC. Cal-Maine Foods, Inc. is a Delaware corporation,

incorporated in 1969.

ITEM 1A.

RISK FACTORS

Our

business

and

results

operations

are

subject

numerous

risks

and

uncertainties,

many

which

are

beyond

our

control. The following is a description of the known factors that may materially affect

our business, financial condition or results

of operations. They

should be considered

carefully,

in addition

to the information

set forth

elsewhere in

this Annual

Report on

Form

10-K,

including

under

Part

II.

Item 7.

Management’s

Discussion

and

Analysis

Financial

Condition

and

Results

Operations,

making

any

investment

decisions

with

respect

our

securities. Additional

risks

uncertainties

that

are

not

currently known

to us,

or that we

are aware

of but

currently deem

to be

immaterial or

that could

apply to

any company

could

also materially adversely affect our business, financial condition or results

of operations.

INDUSTRY RISK FACTORS

Market prices

of wholesale

shell eggs

are volatile,

and decreases

in these

prices can

adversely impact

our revenues

and

profits.

Our operating results are significantly

affected by wholesale shell egg

market prices, which fluctuate widely and

are outside our

control. As

a result,

our prior

performance

should not

be presumed

to be

an accurate

indication of

future performance.

Under

certain circumstances, small increases

in production, or small

decreases in demand, within

the industry might

have a large adverse

effect on shell egg prices. Low shell egg prices adversely affect

our revenues and profits.

Market prices for

wholesale shell eggs

have been volatile

and cyclical. Shell

egg prices have

risen in the

past during periods

high demand such as the initial outbreak of

the COVID-19 pandemic and periods when high protein

diets are popular. Shell egg

prices

have

also

risen

during

periods

constrained

supply,

such

the

latest

highly

pathogenic

avian

influenza

(“HPAI”)

outbreak

that was

first detected

in domestic

commercial flocks

in February

2022. During

times when

prices are

high, the

egg

industry

has

typically

geared

produce

eggs,

primarily

increasing

the

number

layers,

which

historically

has

ultimately resulted in an oversupply of eggs, leading to a period of lower prices.

As discussed

above in

Part I. Item 1. Business – Seasonality

, seasonal fluctuations

impact shell

egg prices. Therefore,

comparisons

our

sales

and

operating

results

between

different

quarters

within

single

fiscal

year

are

not

necessarily

meaningful

comparisons.

A decline in consumer demand for shell eggs can negatively impact our business.

We believe the

increase in meals prepared at home due

to concerns and restrictions during the initial outbreak

of the COVID-19

pandemic,

high-protein

diet

trends,

industry

advertising

campaigns

and

the

improved

nutritional

reputation

eggs

have

all

contributed

at one

time or

another

to increased

shell egg

demand. However,

it is

possible that

the demand

for shell

eggs will

decline in the future. Adverse publicity relating to health or safety

concerns and changes in the perception of the nutritional

value

of shell eggs, changes in consumer

views regarding consumption of animal-based products, as

well as movement away from high

protein diets, could

adversely affect

demand for shell

eggs, which would

have a material

adverse effect

on our future

results of

operations and financial condition.

Feed costs are volatile and increases in these costs can

adversely impact our results of operations.

Feed costs are the largest element of our shell

egg (farm) production cost, ranging from 55%

to 63% of total farm production cost

in the last five fiscal years.

Although feed ingredients, primarily corn and soybean

meal, are available from a

number of sources, we do not

have control over

the prices

of the

ingredients we

purchase, which

are affected

by weather,

various global

and U.S.

supply and

demand factors,

transportation

and storage

costs, speculators,

and

agricultural, energy

and trade

policies in

the U.S.

and

internationally.

recently,

the Russia-Ukraine

War

has had

a negative

impact on

the worldwide

supply of grain,

including corn,

putting upward

pressure on

prices. We

saw increasing

prices for

corn and

soybean meal

for fiscal

years 2022

and 2023

as a

result of

weather-

related shortfalls

in production

and yields, ongoing

supply chain disruptions

and the Russia-Ukraine

War

and its impact

on the

export markets.

Our costs for

corn and

soybean meal are

also affected

by local basis

prices. Factors that

can affect

basis levels

include transportation

and storage costs. We

saw basis levels

increase in our

areas of operation

during fiscal 2023

as a result of

higher transportation and storage costs, resulting in higher farm production

costs during the year.

Increases in feed

costs unaccompanied by increases

in the selling price

of eggs can have

a material adverse effect

on the results

of our operations and cash flow. Alternatively, low feed costs can encourage industry overproduction, possibly resulting in lower

egg prices and lower revenue.

Agricultural risks, including outbreaks of avian

disease, could harm our business.

Our shell egg

production activities are

subject to a variety

of agricultural risks.

Unusual or extreme

weather conditions, disease

and pests can materially and adversely affect the quality and quantity of shell eggs

we produce and distribute. Outbreaks of avian

influenza among poultry occur

periodically worldwide and have occurred

sporadically in the U.S. Most recently,

an outbreak of

HPAI,

which was first detected

in February 2022,

has impacted the

industry.

Prior to 2022, there

was another significant

HPAI

outbreak in the U.S. impacting poultry during 2015. There have been no positive tests for HPAI

at any Cal-Maine Foods’ owned

or contracted facility as

of July 25,

2023. The Company maintains

controls and procedures designed

to reduce the

risk of exposing

our flocks to harmful

diseases; however, despite these efforts, outbreaks of avian

disease can and do

still occur and may

adversely

impact the

health of

our flocks.

An outbreak

of avian

disease could

have a

material adverse

impact on

our financial

results by

increasing

government

restrictions

the

sale

and

distribution

our

products

and

requiring

euthanize

the

affected

layers. Negative publicity from an outbreak within our

industry can negatively impact customer perception, even if

the outbreak

does

not

directly

impact

our flocks.

substantial portion

our

layers

or production

facilities are

affected

any

of these

factors in any given quarter or year, our business, financial condition, and results of operations could be materially and adversely

affected.

Shell

eggs

and

shell

egg

products

are

susceptible

microbial

contamination,

and

may

required

to,

or we

may

voluntarily, recall

contaminated products.

Shell eggs

and shell

egg products

are vulnerable

to contamination

by pathogens

such as

Salmonella. The

Company maintains

policies and procedures designed to comply with the complex rules and regulations governing egg production, such as The Final

Egg

Rule

issued

the

FDA

“Prevention

Salmonella

Enteritidis

Shell

Eggs

During

Production,

Storage,

and

Transportation,” and

the FDA’s

Food Safety Modernization Act. Shipment

of contaminated products, even

if inadvertent, could

result in a

violation of law and

lead to increased

risk of exposure

to product liability

claims, product recalls

and scrutiny by federal

and

state

regulatory

agencies.

have

little,

any,

control

over

proper

handling

once

the

product

has

been

shipped

delivered. In

addition,

products

purchased

from

other

producers

could

contain

contaminants

that

might

inadvertently

redistributed by us. As such, we might decide or be required

to recall a product if we, our customers

or regulators believe it poses

a potential

health risk.

Any product

recall could

result in

a loss

of consumer

confidence in

our products,

adversely affect

our

reputation

with existing

and potential

customers and

have a

material adverse

effect

on our

business, results

of operations

and

financial condition. We

currently maintain insurance

with respect to certain of

these risks, including product

liability insurance,

business interruption insurance and general liability

insurance, but in many cases such insurance is expensive,

difficult to obtain

and no assurance can

be given that such insurance

can be maintained in

the future on acceptable

terms, or in sufficient

amounts

to protect us against losses due to any such events, or at all.

Our profitability

may be adversely

impacted by

increases in other

input costs such

as packaging materials

and delivery

expenses, including as a result of inflation.

In addition to feed ingredient costs, other significant input costs include costs of packaging materials and delivery expenses. Our

costs of packing materials increased

during fiscal 2023 and 2022

due to rising inflation and labor

costs, and during 2022 also as

result

supply

chain

constraints

initially

caused

the

pandemic,

and

these

costs

may

continue

increase.

also

experienced increases in delivery expenses during fiscal 2023 and 2022 due to increases in fuel and labor costs for both our fleet

and contract

trucking, and

these costs

may continue

to increase.

Increases in

these costs

are largely

outside of

our control

and

have an adverse effect on our profitability and cash flow.

BUSINESS AND OPERATIONAL

RISK FACTORS

Global

regional

health

crises including

pandemics

epidemics

could

have

adverse impact

our

business and

operations.

The

effects

global

regional

pandemics

epidemics

can

significantly

impact

our

operations.

Although

demand

for

our

products could

increase as

a result

of restrictions

such as

travel bans

and restrictions,

quarantines, shelter-in-place

orders, and

business and government shutdowns,

which can prompt more

consumers to eat at home,

these restrictions could also significantly

increase our cost of doing business

due to labor shortages, supply-chain disruptions, increased costs and decreased availability of

packaging supplies, and increased

medical and other costs.

We experienced these impacts as a

result of the COVID-19

pandemic,

primarily during our fiscal

years 2020 and 2021.

The pandemic recovery also

contributed to increasing inflation

and interest rates,

which persist and

may continue

to persist. The

impacts of health

crises are difficult

to predict and

depend on numerous

factors

including

the

severity,

length and

geographic

scope

the outbreak,

resurgences

the disease

and

variants,

availability

and

acceptance of vaccines, and

governmental, business and individuals’

responses.

A resurgence of

COVID-19 and/or variants, or

any future major public health crisis, would disrupt our

business and could have a material adverse effect on

our financial results.

Our acquisition growth strategy subjects us to various risks.

As discussed in

Part I. Item I. Business – Growth Strategy

, we plan

to pursue a

growth strategy that includes

selective acquisitions

of other

companies engaged

in the

production and

sale of

shell eggs,

with a

priority on

those that

will facilitate

our ability

expand our cage-free shell egg production capabilities in key locations and markets. We may over-estimate or under-estimate the

demand

for

cage-free

eggs,

which

could

cause

our

acquisition

strategy

less-than-optimal

for

our

future

growth

and

profitability.

The

number

of existing

companies

with

cage-free

capacity

that

may

able

purchase

limited,

most

production of shell

eggs by other companies

in our markets currently

does not meet customer

demands or legal requirements

be designated

as cage-free.

Conversely,

if we

acquire cage-free

production capacity,

which is

more expensive

to purchase

and

operate, and customer

demands or legal

requirements for cage-free

eggs were to change,

the resulting lack

of demand for

cage-

free eggs may result in higher costs and lower profitability.

Acquisitions require capital resources and can divert management’s attention from our existing business. Acquisitions also entail

an inherent risk that we

could become subject to contingent or

other liabilities, including liabilities arising from

events or conduct

prior to

our acquisition

of a

business that

were unknown

to us

at the

time of

acquisition. We

could incur

significantly greater

expenditures in integrating an acquired business than we anticipated at the

time of its purchase.

We cannot assure

you that we:

●

will identify suitable acquisition candidates;

●

can consummate acquisitions on acceptable terms;

●

can successfully integrate an acquired business into our operations; or

●

can successfully manage the operations of an acquired business.

assurance

can

given

that

companies

acquire

the

future

will

contribute

positively

our

results

operations

financial condition.

In addition,

federal antitrust

laws require

regulatory approval

of acquisitions

that exceed

certain threshold

levels of significance, and we cannot guarantee that such approvals would

be obtained.

The consideration

we pay in

connection with any

acquisition affects

our financial results.

If we pay

cash, we could

be required

use

portion

our

available

cash

credit

facility

consummate

the

acquisition.

the

extent

issue

our

Common Stock, existing stockholders may

be diluted. In addition,

acquisitions may result in

additional debt. Our ability to

access

any additional

capital that

may be

needed for

an acquisition

may be

adversely impacted

by higher

interest rates

and economic

uncertainty.

Our largest customers have accounted for a significant portion of our net sales volume. Accordingly, our business may be

adversely affected by the loss of, or reduced purchases by,

one or more of our large customers.

Our customers, such as supermarkets, warehouse clubs

and food distributors, have continued to consolidate and consolidation

expected to continue. These consolidations have

produced larger customers and potential customers with

increased buying power

who are more

capable of operating

with reduced inventories,

opposing price increases,

and demanding lower

pricing, increased

promotional programs and specifically tailored products. Because of these trends,

our volume growth could slow or we

may need

to lower prices or increase promotional spending for our products, any of

which could adversely affect our financial results.

Our top

three customers

accounted for

an aggregate of

50.1%, 45.9%

and 48.6% of

net sales dollars

for fiscal 202

3, 2022,

and

2021, respectively.

Our largest

customer,

Walmart

Inc. (including

Sam's Club),

accounted for

34.2%, 29.5%

and 29.8%

of net

sales dollars

for fiscal

2023, 2022,

and 2021,

respectively. Although

we have

established long-term

relationships with

most of

our customers

who continue

to purchase

from us

based on

our ability

to service

their needs,

they are

generally free

to acquire

shell eggs

from other

sources. If, for

any reason, one

or more

of our

large customers

were to

purchase significantly

less of

our

shell eggs

in the

future or

terminate their

purchases from

us, and

we were

not able

to sell

our shell

eggs to

new customers

comparable levels, it would have a material adverse effect

on our business, financial condition, and results of operations.

Our business is highly competitive.

The

production

and

sale

fresh

shell

eggs,

which

accounted

for

virtually

all

our

net

sales

recent

years,

intensely

competitive. We

compete with

a large

number of

competitors that

may prove

to be

more successful

than we

are in

producing,

marketing and

selling shell

eggs. We

cannot provide

assurance that

we will

be able

to compete

successfully with

any or

all of

these companies.

Increased competition could result in price reductions,

greater cyclicality, reduced

margins and loss of market

share, which would negatively affect our business, results of operations,

and financial condition.

are

dependent

our

management

team,

and

the

loss

any

key

member

this

team

may

adversely

affect

the

implementation of our business plan in a timely manner.

Our success

depends largely

upon the

continued service

of our

senior management

team. The

loss or interruption

of service

one or more

of our key

executive officers

could adversely

affect our

ability to manage

our operations effectively

and/or pursue

our growth strategy.

have not entered

into any employment

or non-compete

agreements with any

of our executive

officers.

Competition could cause us to lose talented employees, and unplanned turnover could deplete institutional

knowledge and result

in increased costs due to increased competition for employees.

Our

business

dependent

our

information

technology

systems

and

software,

and

failure

protect

against

effectively respond to

cyber-attacks, security

breaches, or other

incidents involving those systems,

could adversely affect

day-to-day operations and decision making processes and

have an adverse effect on our performance and reputation.

The efficient operation of our business depends on our

information technology systems, which we rely on to effectively manage

our business data, communications, logistics, accounting, regulatory

and other business processes. If we do not allocate and

effectively manage the resources necessary to build

and sustain an appropriate technology environment, our business,

reputation, or financial results could be negatively impacted. In

addition, our information technology systems may be

vulnerable to damage or interruption from circumstances beyond our control,

including systems failures, natural disasters,

terrorist attacks, viruses, ransomware, security breaches or cyber

incidents. Cyber-attacks are becoming more sophisticated and

are increasing in the number of attempts and frequency by groups and individuals

with a wide range of motives. We

have

experienced and expect to continue to experience attempted cyber-attacks

of our information technology systems or networks.

A security breach

sensitive

information

could

result

damage

our

reputation

and

our

relations

with

our

customers

employees. Any such damage or interruption could have a material adverse

effect on our business.

Technology

and business and regulatory requirements continue to change rapidly.

Failure to update or replace legacy systems to

address

these

changes

could

result

increased

costs,

including

remediation

costs,

system

downtime,

third

party

litigation,

regulatory actions or cyber security vulnerabilities which could have

a material adverse effect on our business.

Labor shortages or increases in labor costs could adversely

impact our business and results of operations.

Labor is a primary component of our farm production costs. Our success is dependent

upon recruiting, motivating, and retaining

staff to operate our farms. Approximately 76% of our employees are paid at hourly rates, often in entry-level positions. While all

our employees are paid at

rates above the federal minimum wage

requirements, any significant increase

in local, state or federal

minimum wage requirements could

increase our labor

costs. In addition,

any regulatory changes

requiring us to

provide additional

employee

benefits

mandating

increases

other

employee-related

costs,

such

unemployment

insurance

workers

compensation, would increase our

costs. A shortage

in the labor

pool, which may be

caused by competition from

other employers,

the remote

locations of

many of

our farms,

decreased

labor participation

rates or

changes in

government-provided

support or

immigration laws, particularly in times of lower unemployment,

could adversely affect our business and results of operations.

shortage of labor

available to

us could

cause our

farms to

operate with

reduced staff, which

could negatively impact

our production

capacity and efficiencies.

In fiscal 2021 and 2022, our labor costs increased primarily due to the pandemic

and its effects, which

caused us to

increase wages in

response to labor shortages.

In fiscal 2023,

labor wages continued to

rise due to

increasing inflation

and low unemployment.

Accordingly, any significant labor shortages or increases

in our labor costs

could have a material

adverse

effect on our results of operations.

We are controlled by the family of our late founder, Fred

R. Adams, Jr., and Adolphus B. Baker,

Chairman of our Board

of Directors,

controls the vote of 100% of our outstanding Class A Common Stock.

Fred R. Adams,

Jr., our

Founder and Chairman Emeritus

died on March 29,

2020. Mr.

Adams’ son-in-law,

Adolphus B. Baker,

Chairman

our

board

directors,

Mr.

Baker’s

spouse

and

her

three

sisters

(Mr.

Adams’

four

daughters)

(collectively,

the

“Family”)

beneficially

own,

directly

indirectly

through

entities,

100%

our

outstanding

Class

Common

Stock

(which has

10 votes

per share),

controlling approximately

52.1% of

our total

voting power.

Such persons

also have

additional

voting power

due to

beneficial ownership

of our

Common Stock

(which has

one vote

per share),

directly or

indirectly through

related entities, resulting in family voting control of approximately 53.8% of our total voting power.

Mr. Baker controls the vote

of 100% of our outstanding Class A Common Stock.

We understand that the Family

intends

to retain ownership

of a

sufficient amount of our

Common Stock and

our Class A

Common

Stock to assure continued ownership of more than 50% of the voting power of

our outstanding shares of capital stock. As a result

this ownership,

the

Family has

the

ability

to exert

substantial

influence

over

matters requiring

action

by our

stockholders,

including

amendments

to our

certificate

of incorporation

and by-laws,

the election

and removal

of directors,

and any

merger,

consolidation,

sale of

all or

substantially

all of

our

assets,

other

corporate

transactions.

Delaware

law

provides

that

the

holders of a majority of the voting power of shares entitled to vote must approve certain fundamental corporate transactions such

as a merger,

consolidation and sale of

all or substantially all

of a corporation’s

assets; accordingly,

such a transaction involving

and

requiring

stockholder

approval

cannot

effected

without

the

approval

the

Family.

Such

ownership

will

make

unsolicited acquisition of our Company more difficult and discourage

certain types of transactions involving a change of control

of our Company, including

transactions in which the holders of our Common Stock might otherwise receive a premium for their

shares over then current market prices.

The Family’s controlling

ownership of our capital stock may adversely

affect the market

price of our Common Stock.

The

price

our

Common

Stock

may

affected

the

availability

for

sale

the

market,

and

you

may

experience significant dilution as a result of future issuances

of our securities, which could materially and adversely

affect

the market price of our Common Stock.

The sale or availability for sale of substantial amounts of our Common Stock could adversely impact its price.

The Family holds

approximately 1.4 million shares of Common Stock (the “Subject Shares”) that are subject to an Agreement Regarding Common

Stock

(the

“Agreement”)

filed

exhibit

this

report.

The

Subject

remain

subject

potential

sale

under

the

Agreement. The Agreement

generally provides that

if a holder

of Subject Shares

intends to sell any

of the Subject

Shares, such

party must give the

Company a right of first

refusal to purchase all or

any of such shares.

The price payable by

the Company to

purchase shares

pursuant to

the exercise

of the

right of

first refusal

will reflect

a 6%

discount to

the then-current

market price

based

the

business-day

volume-weighted

average

price.

the

Company

does

not exercise

its right

first

refusal

and

purchase the shares offered, such party will, subject to the approval of a special committee of independent

directors of the Board

of Directors, be

permitted to sell

the shares not

purchased by the

Company pursuant to

a Company registration

statement, Rule

144 under the Securities Act of 1933, or another manner of sale agreed to by the Company. Although

pursuant to the Agreement

the Company

will have a

right of first

refusal to purchase

all or any

of those shares,

the Company

may elect not

to exercise its

rights

first

refusal,

and

if so

such

would

eligible for

sale pursuant

the registration

rights

the

Agreement

pursuant

Rule

144

under

the Securities

Act

1933.

Sales, or

the

availability

for

sale, of

large

number

shares of

our

Common Stock could result in a decline in the market price of our

Common Stock.

In addition,

our articles

of incorporation

authorize us

to issue

120,000,000 shares

of our

Common Stock.

As of

June 3,

2023,

there were

44,184,048 shares

of our

Common Stock

outstanding. Accordingly,

a substantial

number of

shares of

our Common

Stock

are

outstanding

and

are,

could

become,

available

for

sale

the

market.

addition,

may

obligated

issue

additional shares of our Common Stock in connection with employee benefit

plans (including equity incentive plans).

In the

future, we

may decide

to raise

capital through

offerings of

our Common

Stock, additional

securities convertible

into or

exchangeable for

Common Stock, or

rights to acquire

these securities or

our Common Stock.

The issuance of

additional shares

of our Common Stock or additional securities convertible into or exchangeable for our Common Stock could result in dilution of

existing stockholders’ equity interests in

us. Issuances of substantial amounts of

our Common Stock, or the perception

that such

issuances could

occur,

may adversely

affect prevailing

market prices

for our

Common Stock,

and we

cannot predict

the effect

this dilution may have on the price of our Common Stock.

LEGAL AND REGULATORY

RISK FACTORS

Pressure from animal rights groups regarding the treatment of animals may subject us to additional costs to conform our

practices

comply

with

developing

standards

subject

marketing

costs

defend

challenges

our

current

practices and protect

our image with

our customers. In

particular,

changes in customer

preferences and

new legislation

have accelerated an increase in demand for cage-free eggs, which increases uncertainty

in our business and increases our

costs.

We and many of our customers face pressure from animal rights groups, such as

People for the Ethical Treatment of Animals and

the Humane

Society of

the United States,

to require

companies that supply

food products

to operate

their business in

a manner

that

treats

animals

conformity

with

certain

standards

developed

approved

these

groups.

general,

may

incur

additional costs to conform our practices to address

these standards or to defend our existing

practices and protect our image with

our customers.

The standards promoted

by these groups

change over time,

but typically

require minimum

cage space

for hens,

among other requirements, and some

of these groups have led successful

legislative efforts to ban

any form of caged housing

various states.

discussed

Part I. Item 1. Business - Government Regulation

ten

states

have

passed

minimum

space

and/or

cage-free

requirements

for

hens,

and

other

states are

considering

such requirements.

addition,

in recent

years,

many

large

restaurant

chains,

foodservice

companies

and

grocery

chains,

including

our

largest

customers,

announced

goals

transition

exclusively cage-free

egg supply

chain by specified

future dates.

A significant

number of

our customers

previously announced

goals to offer cage-free eggs exclusively on or before 2026, in most cases subject to available supply, affordability and consumer

demand,

among other contingencies.

Some of these customers have recently changed those goals to offer 70% cage-free eggs by

the end of 2030. While we

anticipate that our retail and foodservice customers will

continue to transition to selling cage-free eggs

given public

commitments,

there is

no assurance

that this

transition

will take

place or

take place

according to

the timeline

current cage-free

commitments. For

example, customers

may accelerate

their transition

to stocking

cage-free eggs,

which may

challenge our

ability to

meet the

cage-free

volume needs

of those

customers and

result in

a loss

of shell

egg

sales. Similarly,

customers who

commit to

stock greater

proportional quantities

of cage-free

eggs are

under no

obligation to

continue to

do so,

which may

result in an

oversupply of

cage-free eggs and

result in lower

specialty egg

prices, which could

reduce the return

our capital investment in cage-free production.

Changing our infrastructure and operating procedures to conform to consumer preferences, customer demands and

new laws has

resulted and

will continue

to result

in additional

costs, including

capital and

operating cost

increases. The

USDA reported

that

the estimated

U.S. cage-free

flock was

121.6 million hens as

of June

30, 2023,

which is approximately

38.3% of

the total U.S.

table

egg

layer

hen

population.

According

the

USDA

Agricultural

Marketing

Service,

as of

May

2023

approximately

221

million hens,

or about

70.5% of

the U.S.

non-organic

laying flock

would have

to be

in cage-free

production by

2026 to

meet

projected demand

from the

retailers, foodservice

providers and

food

manufacturers that

have made

goals to

transition to

cage-

free eggs.

In response

to our

customers’ announced

goals and

increased legal

requirements for

cage-free eggs,

we have

increased capital

expenditures

increase

our

cage-free

production

capacity.

are

also

enhancing

our

focus

cage-free

capacity

when

considering

acquisition opportunities.

Our customers

typically do

not commit

to long-term

purchases of

specific quantities

type of eggs

with us, and

as a result,

we cannot predict

with any certainty

which types of

eggs they will

require us to

supply in

future

periods.

The

production

cage-free

eggs

costly

than

the

production

conventional

eggs,

and

these

higher

production costs contribute

to the prices

of cage-free eggs,

which historically have

typically been higher

than conventional egg

prices. Many consumers prefer to buy less expensive conventional shell eggs. These consumer preferences may in turn influence

our customers’ future needs for

cage-free and conventional eggs.

Due to these uncertainties,

we may over-estimate future demand

for cage-free

eggs, which

could increase

our costs

unnecessarily,

or we

may under-estimate

future demand

for cage-free

eggs,

which could

harm us

competitively.

If our

competitors obtain

non-cancelable

long-term contracts

to provide

cage-free eggs

our existing or potential customers,

then there may be decreased demand

for our cage-free eggs due

to these lost potential sales.

If we and our

competitors increase cage-free egg production

and there is no

commensurate increase in demand for

cage-free eggs,

this overproduction

could lead to

an oversupply of

cage-free eggs, reducing

the sales price

for specialty eggs

and our return

capital investments in cage-free production.

Failure

comply

with

applicable

governmental

regulations,

including

environmental

regulations,

could

harm

our

operating results,

financial condition,

and reputation.

Further,

we may

incur significant

costs to

comply with

any such

regulations.

We are subject to federal, state and local

regulations relating to grading, quality

control, labeling, sanitary control, waste

disposal,

and other

areas of

our business.

As a

fully-integrated

shell egg

producer,

our shell

egg facilities

are subject

to regulation

and

inspection by the USDA, OSHA, EPA

and FDA, as well as state and local health and agricultural agencies, among others. All of

our shell egg production and

feed mill facilities are subject

to FDA, EPA and OSHA regulation and inspections. In addition, rules

are often proposed

that, if adopted as proposed, could increase our costs.

Our operations and facilities are subject to various federal, state and local environmental, health, and safety laws and regulations

governing,

among

other

things,

the

generation,

storage,

handling,

use,

transportation,

disposal,

and

remediation

hazardous

materials. Under these laws and

regulations, we are required to obtain permits

from governmental authorities, including, but

not

limited to wastewater discharge permits and manure

and litter land applications.

If we

fail to

comply with

applicable laws

or regulations,

or fail

to obtain

necessary permits,

we could

be subject

to significant

fines and penalties or other sanctions, our reputation could be harmed, and our operating results and financial condition could be

materially

adversely

affected.

addition,

because

these

laws and

regulations

are

becoming

increasingly

stringent,

it is

possible that we will be required to incur significant costs for compliance

with such laws and regulations in the future.

Climate change and legal or regulatory responses

may have an adverse impact on our business and results of

operations.

Extreme

weather

events,

such

as derechos,

wildfires,

drought,

tornadoes,

hurricanes,

storms,

floods

other

natural

disasters

could materially and adversely affect our operating

results and financial condition. In fact, derechos, fires, floods,

tornadoes and

hurricanes have affected our facilities or the facilities of other egg producers in the past. Increased global temperatures

and more

frequent occurrences

of extreme

weather events,

which may

be exacerbated

by climate

change, may

cause crop

and livestock

areas to

become unsuitable,

including due

to water

scarcity or

high or

unpredictable

temperatures,

which may

result in

much

greater stress on food systems and more pronounced food

insecurity globally. Lower

global crop production, including corn and

soybean meal,

which are

the primary

feed ingredients

that support

the health of

our animals,

may result

in significantly

higher

prices for these commodity inputs, impact our ability to source the commodities we use to feed our flocks, and negatively impact

our ability

to maintain

or grow our

operations. Climate

change may

increasingly expose

workers and

animals to

high heat

and

humidity stressors that adversely impact poultry production. Increased

greenhouse gas emissions may also negatively impact air

quality, soil quality

and water quality,

which may hamper our ability to support our operations,

particularly in higher water- and

soil-stressed regions.

Increasing

frequency of

severe weather

events, whether

tied to

climate change

or any

other cause,

may negatively

impact our

ability to raise

poultry and

produce eggs profitably

or to

operate our transportation

and logistics

supply chains. Regulatory

controls

and

market

pricing may

continue

to drive

the costs

of fossil

-based

fuels higher,

which

could negatively

impact

our ability

source commodities

necessary to

operate our

farms or

plants and

our current

fleet of

vehicles. These

changes may

cause us

change, significantly, our day-to-day

business operations and our strategy. Climate change and extreme weather events may also

impact demand for our products

given evolution of consumer food preferences.

Even if we take

measures to position our business

in anticipation

of such

changes, future

compliance

with legal

or regulatory

requirements may

require significant

management

time, oversight and enterprise expense. We

may also incur significant expense tied to regulatory fines if laws and regulations are

interpreted and applied

in a manner that

is inconsistent with our

business practices. We

can make no

assurances that our efforts

to prepare

for these

adverse events

will be

in line

with future

market and

regulatory expectations

and our

access to

capital to

support our business may also be adversely impacted.

Current and future litigation could expose us to significant

liabilities and adversely affect our business reputation.

We and certain of our subsidiaries are involved in various legal proceedings.

Litigation is inherently unpredictable, and although

believe

have

meaningful

defenses

these

matters,

may

incur

liabilities

due

adverse

judgments

enter

into

settlements of claims that

could have a material

adverse effect on our

results of operations, cash

flow and financial condition.

For

discussion

our

ongoing

legal

proceedings

see

Part I. Item 3. Legal Proceedings

below

and

Part

II.

Item

Notes

the

Consolidated Financial

Statements,

Note 16 – Commitments and Contingencies

Such lawsuits are

expensive to

defend, divert

management’s

attention, and

may

result in

significant

adverse judgments

or settlements. Legal

proceedings

may expose

us to

negative publicity,

which could adversely affect our business reputation and customer preference

for our products and brands.

FINANCIAL AND ECONOMIC RISK FACTORS

Weak

or unstable

economic

conditions, including

continued

higher inflation

and rising

interest

rates,

could negatively

impact our business.

Weak

or unstable

economic conditions,

including continued

higher inflation

and rising

interest rates,

may adversely

affect our

business by:

●

Limiting our access to capital markets or increasing the cost of capital we may

need to grow our business;

●

Changing consumer spending and habits and demand for eggs, particularly

higher-priced eggs;

●

Restricting the supply of energy sources or increasing our cost to procure

energy; or

●

Reducing the availability of feed

ingredients, packaging material, and other raw

materials, or increasing the cost

of these

items.

Deterioration of economic conditions could also negatively

impact:

●

The financial condition of our suppliers, which may make it more

difficult for them to supply raw materials;

●

The financial condition of our customers, which may decrease demand for

eggs or increase our bad debt expense; or

●

The financial condition of our insurers, which could increase our cost to obtain insurance, and/or make it difficult for or

insurers to meet their obligations in the event we experience a loss due to an

insured peril.

According

the

U.S.

Bureau

Labor

Statistics,

from

May

2021

May

2022,

the

Consumer

Price Index for

All

Urban

Consumers (“CPI-U”) increased

8.5 percent, the largest

12-month increase since

the period ending December

1981. The CPI-U

increased 4.1% from May 2022 to May 2023. Inflationary costs have increased our input costs, and if

we are unable to pass these

costs through to the customer it could have an adverse effect on

our business.

hold

significant

cash balances

in deposit

accounts with

deposits in

excess of

the amounts

insured by

the Federal

Deposit

Insurance Corporation (“FDIC”). In

the event of

a bank failure

at an institution

where we maintain

deposits in excess

of the FDIC-

insured amount, we may lose such excess deposits.

The

loss

any

registered

trademark

other

intellectual

property

could

enable

other

companies

compete

effectively with us.

utilize intellectual

property in

our business. For

example, we

own the

trademarks

Farmhouse Eggs®

4Grain®, Sunups®

and

Sunny Meadow®

. We

produce and market

Egg-Land’s

Best®

and

Land O’ Lakes

® under license

agreements with EB. We

have invested a significant amount of

money in establishing and promoting

our trademarked brands. The loss or

expiration of any

intellectual property could

enable our competitors

to compete more

effectively with us

by allowing them

to make and

sell products

substantially

similar

those

offer.

This

could

negatively

impact

our

ability

produce

and

sell

those

products,

thereby

adversely affecting our operations.

Impairment in the carrying value

of goodwill or other assets

could negatively affect our results of

operations or net worth.

Goodwill

represents

the

excess

the

cost

business

acquisitions

over

the

fair

value

the

identifiable

net

assets

acquired. Goodwill

reviewed

least

annually

for

impairment

assessing

qualitative

factors

determine

whether

the

existence of events or circumstances

leads to a determination that

it is more likely than not

that the fair value of

a reporting unit

is less

than its

carrying

amount. As of

June 3,

2023, we

had $44.0 million

of goodwill. While

we believe

the current

carrying

value of this goodwill is not impaired, future goodwill impairment charges could adversely affect our results of operations in any

particular period and our net worth.

Events beyond our control such as extreme

weather and natural disasters could negatively impact our business.

Fire,

bioterrorism,

pandemics,

extreme

weather

or natural

disasters, including

droughts,

floods,

excessive

cold

heat, water

rights restrictions, hurricanes or other storms, could impair the health or growth of our flocks, decrease production or availability

of feed ingredients, or interfere

with our operations due to

power outages, fuel shortages, discharges from

overtopped or breached

wastewater treatment lagoons, damage to our production and processing facilities, labor shortages or disruption of transportation

channels, among other things. Any of these factors could have a material adverse

effect on our financial results.

ITEM 1B.

UNRESOLVED

STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

The table below provides summary information about

the primary operational facilities we use

in our business as of June

3, 2023.

Type

Quantity

(a)

Owned

Leased

Production Capacity

Location

Breeding Facilities

—

House up to 255,000 hens

GA, MS

Distribution Centers

—

FL, GA, NC, TX

Feed Mills

Production capacity of 859 tons

of feed per hour

AL, AR, FL, GA, KS, KY,

LA,

MS, OH, OK, SC, TN, TX, UT

Hatcheries

Hatch up to 407,600 chicks per

week

FL, MS

Processing and

Packaging

—

Approximately 587,700 dozen

shell eggs per hour

AL, AR, FL, GA, KS, KY,

LA,

MS, OH, OK, SC, TX, UT

Pullet Facilities

—

Grow 27.1 million pullets

annually

AR, FL, GA, KS, KY,

MS, SC,

TX, UT

Shell Egg Production

—

House up to 46.6 million layers

AL, AR, FL, GA, KS, KY,

LA,

MS, OH, OK, SC, TX, UT

Egg Products Processing

Facilities

—

Production capacity of 43,140

lbs. per hour

GA, TX, MO

(a)

Does not include idled facilities.

also

have

ongoing

construction

projects

further

expand

the

Company’s

cage-free

egg

production

capabilities.

These

projects

include

expanding

our cage-free

egg production

at existing

farms or

converting

conventional

housing

with cage-free

production.

These

projects

will

phase

into

production

through

fiscal

2027.

For

additional

information,

see

Part II. Item 7.

Management’s Discussion and Analysis – Results of Operations – Liquidity and Capital Resources

June

2023,

owned

approximately

28.0

thousand

acres

land.

There

are

material

mortgages

liens

our

properties.

ITEM 3.

LEGAL PROCEEDINGS

Refer to the description of certain legal proceedings pending against us under Part II. Item

8. Notes to the Consolidated Financial

Statements,

Note 16 – Commitments and Contingencies

, which discussion is incorporated herein by reference.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART

II.

ITEM

MARKET

FOR

REGISTRANT’S

COMMON

EQUITY,

STOCKHOLDER

MATTERS

AND

ISSUER PURCHASES OF EQUITY SECURITIES

We have two classes of

capital stock, Common Stock and Class A Common Stock. Our Common Stock trades on the NASDAQ

Global Select Market under the symbol “CALM”. There is no public

trading market for the Class A Common Stock.

All outstanding

Class A

shares are

owned by

a limited

liability company

of which

Adolphus Baker,

our Chairman,

is the

sole

managing member and will be

voted at the direction of

Mr. Baker. At July 14, 2023, there were approximately 319 record

holders

of our Common Stock

and approximately 73,626

beneficial owners whose shares

were held by nominees

or broker dealers. For

additional information

about our

capital structure,

see

Note 11 - Equity

in Part

II. Item

8. Notes

to the

Consolidated Financial

Statements.

Dividends

Cal-Maine has a

variable dividend policy

adopted by its

Board of Directors.

Pursuant to the

policy,

Cal-Maine pays

a dividend

to shareholders of

its Common Stock and

Class A Common

Stock on a quarterly

basis for each quarter

for which the Company

reports net

income attributable

to Cal-Maine

Foods, Inc.

computed in

accordance with

GAAP in

an amount

equal to

one-third

(1/3) of

such quarterly

income. Dividends

are paid

to shareholders

of record

as of

the 60th

day following

the last

day of

such

quarter, except for

the fourth fiscal quarter.

For the fourth quarter,

the Company will pay dividends

to shareholders of record on

the 65th day after the

quarter end. Dividends are payable

on the 15th day following

the record date. Following a

quarter for which

the

Company

does

not

report

net

income

attributable

Cal-Maine

Foods,

Inc.,

the

Company

will

not

pay

dividend

for

subsequent profitable quarter until the Company is profitable on a

cumulative basis computed from the date of the

last quarter for

which

dividend

was

paid. Under

the

Company's

Credit

Facility,

dividends

are

restricted

the

amount

permitted

under

the

Company’s

current dividend policy,

and may not

be paid if

a default exists

or will arise

after giving effect

to the dividend

or if

the sum of

cash and cash

equivalents of

the Company and

its subsidiaries plus

availability under

the Credit Facility

equals less

than $50 million.

Stock Performance Graph

The

Company

utilized

the

(i)

Russell

2000

Total

Return,

and

(ii)

S&P

Composite

1500

Food

Products

Industry

Index

benchmark the

Company’s

total shareholder

return. The

Company is a

member of

each of these

indexes and

believes the other

companies

included

these

indexes

provide

products

and

services

similar

Cal-Maine

Foods.

The

graph

presents

total

shareholder return and assumes $100 was invested on June 1, 2018

in the stock or index and dividends were reinvested.

June 1, 2018

May 31, 2019

May 29, 2020

May 28, 2021

May 27, 2022

June 3, 2023

Cal-Maine Foods, Inc.

100.00

80.69

97.12

76.16

105.31

114.38

Russell 2000 Total Return

100.00

90.16

87.06

143.27

120.53

118.75

S&P Composite 1500 Food

Products Industry Index

100.00

105.74

116.41

144.80

155.14

163.85

Issuer Purchases of Equity Securities

The following table is a summary of our fourth quarter 2023 share repurchases:

Issuer Purchases of Equity Securities

Total

Number of

Maximum Number

Shares Purchased

of Shares that

Total

Number

Average

as Part of Publicly

May Yet

of Shares

Price Paid

Announced Plans

Purchased Under the

Period

Purchased (1)

per Share

Or Programs

Plans or Programs

2/26/23 to 3/25/23

—

3/26/23 to 4/22/23

10,551

48.62

—

4/23/23 to 6/03/23

—

10,551

48.62

—

(1)

As permitted under

our Amended and

Restated 2012

Omnibus Long-Term

Incentive Plan,

these shares were

withheld

by us to satisfy tax withholding

obligations for employees in connection with the vesting of restricted common stock.

Recent Sales of Unregistered Securities

No sales of securities without registration under the Securities Act of 1933

occurred during our fiscal year ended June 3, 2023.

Securities Authorized for Issuance under Equity Compensation Plans

Equity Compensation Plan Information

(a)

(b)

(c)

Number of

securities to be

issued upon exercise

of outstanding

options, warrants

and rights

Weighted average

exercise price of

outstanding

options, warrants

and rights

Number of securities

remaining available for future

issuance under equity

compensation plans (excluding

securities reflected in column

(a))

Equity compensation plans

approved by shareholders

—

294,140

Equity compensation plans not

approved by shareholders

—

Total

—

294,140

(a)

There were

no outstanding options,

warrants or

rights as of

June 3, 2023.

There were 941,593

shares of restricted

stock outstanding under our Amended and Restated 2012 Omnibus Long-Term

Incentive Plan as of June 3, 2023.

(b)

There were no outstanding options, warrants or rights as of June 3, 202

(c)

Reflects shares

available for

future issuance

as of

June 3,

2023 under

our Amended

and Restated

2012 Omnibus

Long-Term Incentive

Plan.

For

additional

information,

see

Note 14 – Stock Compensation Plans

Part

II.

Item

Notes

the

Consolidated

Financial

Statements.

ITEM 6.

RESERVED

ITEM

MANAGEMENT’S

DISCUSSION

AND

ANALYSIS

FINANCIAL

CONDITION

AND RESULTS

OF OPERATIONS

RISK FACTORS;

FORWARD

-LOOKING STATEMENTS

For

information

relating

important

risks

and

uncertainties

that

could

materially

adversely

affect

our

business,

securities,

financial

condition,

operating

results,

cash

flow,

reference

made

the

disclosure

set

forth

under

Part I. Item 1A. Risk

Factors

. In

addition, because

the following

discussion includes

numerous forward

-looking statements

relating to

our business,

securities, financial condition, operating results and cash flow, reference is made to the disclosure set forth under

Part I. Item 1A.

Risk Factors

and

the

information

set

forth

the

section

Part

immediately

preceding

Item

above

under

the

caption

“

Forward-Looking Statements

.”

COMPANY

OVERVIEW

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packaging, marketing and distribution of

fresh shell eggs.

Our

fiscal

year

end

the

Saturday

closest

May 31.

The

fiscal

year

2023

and

2022

included

weeks

and

weeks,

respectively.

The Company,

which

is headquartered

in Ridgeland,

Mississippi, is

the largest

producer and

distributor

of fresh

shell eggs in the United States

(“U.S”). In fiscal 2023, we sold approximately 1,147.4 million dozen shell

eggs, which we believe

represented

approximately

21% of

domestic shell

egg consumptio

n. Our

total flock

as of

June 3,

2023

of approximately

41.2

million layers and 10.8 million pullets and breeders is the largest in the

U.S. We sell most of

our shell eggs to a diverse group of

customers, including

national and

regional grocery

store chains,

club stores,

companies servicing

independent supermarkets

the U.S., food

service distributors, and

egg product consumers

in states across

the southwestern, southeastern,

mid-western and

mid-Atlantic regions of the U.S.

The Company has one reportable

operating segment, which is the production,

grading, packaging, marketing and distribution

shell eggs. Many of our customers rely on us to provide most of their shell egg needs, including specialty and conventional eggs.

Specialty

eggs

represent

broad

range

products. We

classify

cage-free,

organic,

brown,

free-range,

pasture-raised

and

nutritionally enhanced

as specialty eggs for

accounting and reporting

purposes. We

classify all other

shell eggs as conventional

eggs.

While

report

separate

sales

information

for

these

types

eggs,

there

are

number

cost

factors

which

are

not

specifically

available

for

conventional

specialty

eggs due

the

nature

of egg

production.

manage

our

operations

and

allocate resources to these

types of eggs on a consolidated

basis based on the demands

of our customers. For further

description

of our business, refer to

Part I. Item I. Business

HPAI

Since the first detection in

a U.S. commercial flock in

February 2022, outbreaks of highly

pathogenic avian influenza

(“HPAI”)

continued

to occur

in U.S.

poultry flocks

throughout calendar

year 2022

and, less

frequently,

in calendar

year 2023,

which is

more than twice the length of time

of the last HPAI outbreak in 2014-2015. HPAI affected more than 58 million birds in 47 states

and

resulted

the

depopulation

43.3

million

commercial

layer

hens

and

1.0

million

pullets

leading

higher

prices

for

conventional

shell eggs

beginning in

the fourth

quarter of

fiscal 2022

and continuing

through the

third quarter

of fiscal

2023.

Though the virus is still present, due to seasonal migratory patterns of wild birds (which serve as carriers for the disease) the rate

of outbreaks has substantially

decreased and the last

occurrence in a commercial

egg laying flock was in

December 2022.

The

USDA

attributes

this,

large

part,

improved

biosecurity

measures

the

commercial

poultry

industry.

The

industry

and

USDA have devoted

significant resources to

attempt to prevent

future outbreaks. With

the spring wild

bird migration complete

in the U.S., focus is on the fall migration season.

believe the

HPAI

outbreak will

continue to

impact the overall

supply of

eggs until the

layer hen

flock is

fully replenished.

The egg industry typically experiences lower sales during the

summer. The layer hen flock five-year average from 2020-2022 for

the month of June is 321.5 million hens. According to the USDA the U.S.

flock consisted of 317.4 million layers producing table

market

type

eggs as

July

2023,

which

is 0.9%

below

the

five-year

average

and

reflects

efforts

U.S.

producers

repopulate their flocks. As the layer flock began to recover in the fourth quarter of fiscal 2023, prices for conventional shell eggs

decreased

from

highs.

There

have

been

positive

tests

for

HPAI

any

Cal-Maine

Foods’

owned

contracted

production facility as of July

25, 2023. While no farm

is immune from HPAI,

we believe we have implemented

and continue to

maintain robust biosecurity programs across our locations. We

are also working closely with federal, state and local government

officials

and focused

industry groups

to mitigate

the risk

of this

and future

outbreaks and

effectively

manage our

response, if

needed.

Executive Overview of Results – Fiscal Years

Ended June 3, 2023, May 28, 2022 and May 29, 2021

Fiscal Years

Ended

June 3, 2023

May 28, 2022

May 29, 2021

Net sales (in thousands)

3,146,217

1,777,159

1,348,987

Gross profit (in thousands)

1,196,457

337,059

160,661

Net income attributable to Cal-Maine Foods, Inc.

758,024

132,650

2,060

Net income per share attributable to Cal-Maine Foods, Inc.

Basic

15.58

2.73

0.04

Diluted

15.52

2.72

0.04

Net average shell egg price

(a)

2.622

1.579

1.217

Average UB Southeast

Region - Shell Eggs - White Large

3.115

1.712

1.155

Feed costs per dozen produced

0.676

0.571

0.446

(a) The net average

shell egg selling price

is the blended price

for all sizes and

grades of shell eggs,

including non-graded

shell egg sales, breaking stock and undergrades.

For fiscal

2022, net

sales increased

to $1.8

billion, gross

profit to

$337.1 million

and net income

to $132.7

million from

fiscal

2021 net sales of

$1.3 billion, gross profit

of $160.7 million and

net income of $2.1

million. The increases resulted primarily

from

higher selling prices for

conventional eggs as well as an

increased volume of specialty

eggs sold, partially offset

by a decline in

the

volume

conventional

eggs

sold.

Gross

profit

and

net

income

increases

were

partially

offset

increased

cost

feed

ingredients and increased processing

costs. Consumer demand maintained

a steady growth throughout our

first three quarters of

fiscal

2021

but

began

trending

down

during

our

fourth

quarter

fiscal

2021

consumers

started

resume

pre-pandemic

activities.

believe

the

decreased

demand

foodservice

seen

throughout

the

first

three

quarters

fiscal

2021

due

the

pandemic contributed to the depressed price of shell

eggs for fiscal 2021 in the retail market due to the extra

supply entering the

retail channel from the foodservice channel.

For

fiscal

2022,

believe

prices

for

conventional

eggs

were

positively

impacted

better

alignment

the

size

the

conventional

production

layer

hen

flock

and

customer

and

consumer

demand

through

the

first

three

fiscal

quarters

2022.

Conventional egg

prices further

increased in

the fourth

quarter of

fiscal 2022

primarily due

to decreased

supply caused

by the

HPAI

outbreak

compounded

with

good

customer

demand.

Throughout

fiscal

2022

the

hen

numbers

reported

the

USDA

remained below the five-year average.

For fiscal

2023, net

sales increased

to $3.1

billion, gross

profit to

$1.2 billion

and net

income to

$758.0 million.

The increases

primarily resulted

from significantly

higher average

egg selling

prices, primarily

due to

the reduction

in egg

supply caused

HPAI

and

higher

grain

and

other

input

costs,

some

our

egg

sales

prices

are

based

formulas

our

costs

production. Gross

profit and

net income

increases were

partially offset

by the

increased cost

of feed

ingredients and

increased

processing, packaging

and warehouse costs.

The impact of

HPAI

continued throughout

the first three

quarters of fiscal

2023 as

prices continued to increase. For the

first three quarters of fiscal

2023, the average UB southeastern large index

price was 138.8%

higher

than

the

average

price

the

first

three

quarters

fiscal

2022.

For

the

fourth

quarter

fiscal

2023

the

average

southeastern large index price decreased 13.8% to $2.163

from the same period in the

prior year as the egg supply

improved from

the effects

of HPAI.

Conventional egg

selling prices

declined significantly

during the

latter part

of the

fourth quarter

of fiscal

2023.

Our dozens sold

increased by 5.9%

for fiscal 2023

compared to fiscal

2022, primarily due

to an increase

in specialty egg

sales.

According to

Information Resources,

Inc. (“IRI”),

for the

52 weeks

ended June

4, 2023,

which approximately

aligns with

our

fiscal year 2023, conventional egg dozens sold in the U.S. at multi-retail outlets decreased 9.3%, while specialty egg dozens sold

increased 9.9%

versus the

prior-year comparable

period. Our

conventional eggs

dozens sold

increased 0.2%

and specialty

egg

dozens sold increased 18.6% as compared to fiscal 2022, with most of the increase

due to an increase in cage-free eggs sold.

Our feed costs

per dozen produced

increased to $0.676

in fiscal 2023,

compared to $0.571

in fiscal 2022.

For fiscal year

2023,

the average Chicago

Board of Trade

(“CBOT”) daily market

price was $6.57

per bushel for

corn and $450

per ton for

soybean

meal,

representing

increases

4.1%

and

14.7%,

respectively,

compared

the

daily

average

CBOT

prices

for

fiscal

2022.

Supplies

of corn and soybean meal remained tight

relative to demand in throughout fiscal 2023,

as evidenced by a low stock-to-

use ratio

for corn,

as a

result of

weather-related

shortfalls in

production

and yields,

ongoing supply

chain disruptions

and

the

Russia-Ukraine War

and its

impact on

the export

markets. Basis

levels for

corn and

soybean meal,

which impact

our costs for

these feed ingredients, ran significantly higher in fiscal 2023 in our areas of operation compared to our prior year fiscal year as a

result of higher transportation and storage costs, adding to our expense.

RESULTS

OF OPERATIONS

The following table sets forth, for the

fiscal years indicated, certain items from our Consolidated

Statements of Income expressed

as a percentage of net sales.

Fiscal Year

Ended

June 3, 2023

May 28, 2022

Net sales

100.0

Cost of sales

62.0

81.0

Gross profit

38.0

19.0

Selling, general and administrative

7.4

11.2

Gain on insurance recoveries

(0.1)

(0.3)

(Gain) loss on disposal of fixed assets

—

Operating income

30.7

8.1

Total other income

1.0

1.3

Income before income taxes

31.7

9.4

Income tax expense

7.7

1.9

Net income

24.0

7.5

Less:

Net loss attributable to noncontrolling interest

—

Net income attributable to Cal-Maine Foods, Inc.

24.0

7.5

Fiscal Year

Ended June 3, 2023 Compared to Fiscal Year

Ended May 28, 2022

NET SALES

Total net sales for fiscal

2023

were $3.1 billion compared to $1.8 billion for fiscal 2022.

Net shell egg sales represented 96.1% and 96.6% of total net

sales for the fiscal year 2023

and 2022, respectively. Shell egg sales

classified as “Other” represent sales of miscellaneous byproducts and resale products included with our shell

egg operations. The

table below presents an analysis of our conventional and specialty shell egg

sales (in thousands, except percentage data):

June 03, 2023

May 28, 2022

Total net sales

3,146,217

1,777,159

Conventional

2,051,961

67.9

1,061,995

61.8

Specialty

956,993

31.6

648,838

37.8

Egg sales, net

3,008,954

99.5

1,710,833

99.6

Other

14,993

0.5

6,322

0.4

Net shell egg sales

3,023,947

100.0

1,717,155

100.0

Dozens sold:

Conventional

749,076

65.3

747,914

69.0

Specialty

398,297

34.7

335,875

31.0

Total dozens sold

1,147,373

100.0

1,083,789

100.0

Net average selling price per dozen:

Conventional

2.739

1.420

Specialty

2.403

1.932

All shell eggs

2.622

1.579

Egg products sales:

Egg products net sales

122,270

60,004

Pounds sold

70,035

63,968

Net average selling price per pound

1.746

0.938

Shell egg net sales

For

fiscal

2023,

shell

egg

net

sales

increased

$1.3

billion,

primarily

due

higher

net

average

selling

prices

for

conventional eggs, and to a lesser extent specialty eggs.

For fiscal 202

3, conventional

egg sales increased

$990.0 million,

or 93.2%, compared

to fiscal 2022,

primarily due

the increase in

conventional egg

prices. Changes

in price resulted

in a $988.0

million increase and

changes

in volume

resulted in a $1.7 million increase in net sales.

Conventional egg prices increased in the first three quarters

of fiscal 2023 primarily due to decreased supply

caused by

the HPAI outbreak, discussed above. Conventional egg prices decreased

substantially in the fourth

quarter of fiscal 2023

compared to average

fiscal 2023 levels, due

to an increased supply

of conventional eggs

caused by the repopulating

layer

flocks

response

the

impact

HPAI

and

typical

seasonal

decreases

demand.

Conventional

egg

prices

exceeded

specialty

egg

prices

during

fiscal

2022

and

for

the

first

three

quarters

fiscal

2023,

which

atypical

historically. Conventional

egg prices generally respond more quickly to market conditions because we sell the majority

our

conventional

shell

eggs

based

formulas

that

adjust

periodically

and

take

into

account,

varying

ways,

independently quoted regional wholesale market prices for shell

eggs or formulas related to our

costs of production. The

majority of our specialty eggs are typically sold at prices and terms negotiated

directly with customers and therefore do

not fluctuate as much as conventional pricing.

Specialty egg sales

increased $308.2 million, or

47.5%, for fiscal

2023

compared to fiscal

2022, primarily due

to a 24.4%

increase in specialty egg

prices and a 18.6% increase

in the volume of

specialty dozens sold. Changes

in price resulted

in a $187.6

million increase and

change in volume

resulted in a

$120.6 million increase

in net sales,

respectively.

Our

specialty egg sales also benefitted from our additional

cage-free production capacity.

Cage-free revenue for fiscal 2023

was 20.2% of total revenue, compared to 22.3% for fiscal 2022.

Net average selling

prices of specialty eggs

increased by agreements with

our customers in response

to rising feed and

other input costs as well as lower supply availability due to HPAI.

Demand for specialty

eggs increased during

the first three

quarters of fiscal

2023 as conventional

egg prices rose.

Our

sales volume benefited versus the prior-year period, through use of

our higher cage-free production capacity.

Egg products net sales

Egg products net sales increased $62.3 million or 103.8%, primarily due to an 86.1% selling price increase compared to

fiscal 2022, which had a $56.6 million positive impact on net sales.

Our egg products net average selling

price increased in fiscal 2023, compared

to fiscal 2022 as the supply of shell

eggs

used to produce egg products decreased due to the HPAI

outbreak that started in February 2022.

COST OF SALES

Cost of sales for fiscal 2023

were $1.9 billion compared to $1.4 billion for fiscal 2022.

Cost of

sales consists

costs directly

to producing,

processing

and

packing

shell eggs,

purchases

shell

eggs from

outside sources,

processing and

packing of

liquid and

frozen egg

products and

other non-egg

costs. Farm production

costs are

those

costs incurred

at the

egg production

facility,

including feed,

facility,

hen amortization

and other

related farm

production

costs.

The following table presents the key variables affecting our cost of

sales (in thousands,

except cost per dozen data):

Fiscal Year

Ended

June 03, 2023

May 28, 2022

% Change

Cost of Sales:

Farm production

1,118,741

927,806

20.6

Processing, packaging, and warehouse

342,836

289,056

18.6

Egg purchases and other (including change in inventory)

379,777

172,034

120.8

Total shell eggs

1,841,354

1,388,896

32.6

Egg products

108,406

51,204

111.7

Total

1,949,760

1,440,100

35.4

Farm production costs (per dozen produced)

Feed

0.676

0.571

18.4

Other

0.396

0.352

12.5

Total

1.072

0.923

16.1

Outside egg purchases (average cost per dozen)

3.02

1.72

75.6

Dozens produced

1,058,540

1,022,327

3.5

Percent produced to sold

92.3%

94.3%

(2.1)

Farm Production

Feed costs

per dozen

produced increased

18.4% in

fiscal 2023

compared to

fiscal 2022,

primarily due

to higher

feed

ingredient prices. Basis levels for corn and soybean meal

ran significantly higher in our areas of operation

compared to

our prior fiscal year due to higher transportation and storage costs, adding

to our expense.

For fiscal 2023, the average daily CBOT market price was $6.57 per bushel for corn and $450 per ton of soybean meal,

representing increases of 4.1% and 14.7%, respectively,

as compared to the average daily CBOT prices for fiscal 2022.

Other farm production

costs increased due

to higher

facility and

flock amortization.

Facility costs

increased due primarily

to increased labor costs. Labor costs increased 29.6%

due to increased use of contract labor and increased wages

raised

in response to labor shortages.

Flock amortization increased

primarily from higher

capitalized feed costs

as well as higher

amortization costs from

increase in our cage-free production.

Supplies of corn and soybean remained tight relative to demand throughout fiscal 2023, as evidenced by a low stock-to-use

ratio

for

corn,

result

weather-related

shortfalls

production

and

yields,

ongoing

supply

chain

disruptions

and

the

Russia-

Ukraine

War

and

its

impact

the

export

markets.

For

fiscal

2024,

expect

continued

corn

and

soybean

upward

pricing

pressures and further market volatility to affect feed costs.

Processing, packaging, and warehouse

Cost of packaging materials increased 18.6% compared to

fiscal 2022

as costs increased due to rising

inflation and labor

costs.

Labor costs increased 13.6% due to wage increases instituted in response

to labor shortages and rising inflation.

Dozens processed increased 3.6% compared to fiscal 2022, which

resulted in an $11.2 million increase in costs.

Egg purchases and other (including change in inventory)

Costs in this category increased

120.8% compared to fiscal 2022

primarily due to the

increase in egg prices. The

average

price

of outside

egg

purchases

increased

75.6%

per

dozen compared

fiscal

2022.

Additionally,

our

percentage

produced to

sold decreased

to 92.3%

in fiscal

2023 from

94.3% in

fiscal 2022

as we

increased our

volume of

outside

egg purchases in order to meet customer demand.

GROSS PROFIT

Gross profit,

as a percentage

of net sales,

was 38.0%

for fiscal 2023

compared to 19.0%

for fiscal 2022.

The increase resulted

primarily from higher selling prices for conventional eggs as well as the increased volume

of specialty eggs sold, partially offset

by the increased cost of feed ingredients and processing, packaging

and warehouse costs.

SELLING, GENERAL, AND ADMINISTRATIVE

EXPENSES

Selling,

general,

and

administrative

(“SGA”)

expenses

include

costs

marketing,

distribution,

accounting,

and

corporate

overhead. SG&A expenses increased

$33.6 million to $232.2

million in fiscal 2023.

The following table presents

an analysis of

our SGA expenses (in thousands):

Fiscal Year

Ended

June 03, 2023

May 28, 2022

$ Change

% Change

Specialty egg expense

57,758

59,830

(2,072)

(3.5)

Delivery expense

77,548

62,677

14,871

23.7

Payroll, taxes and benefits

57,830

43,954

13,876

31.6

Stock compensation expense

4,205

4,063

142

3.5

Other expenses

34,866

28,107

6,759

24.0

Total

232,207

198,631

33,576

16.9

Specialty egg expense

Specialty egg

expense, which

includes franchise

fees, advertising

and promotion

costs generally

tracks with

specialty

egg

volumes,

which

were

18.6%

for

fiscal

2023

compared

fiscal

2022.

However,

our

specialty

egg

expense

decreased 3.5%,

primarily due

to a

significant reduction

in advertising

costs. The

higher prices

for conventional

eggs

and

the

comparatively

lower prices

for

specialty eggs

diminished

the need

to promote

specialty eggs

in fiscal

2023.

However, we anticipate that the need to promote specialty eggs will increase

in fiscal 2024 as the market recovers from

the effects of HPAI.

Delivery expense

The increased

delivery expense

is primarily

due to

the increase

in fuel

and labor

costs for

both our

fleet and

contract

trucking. Compared to fiscal

2022, contract trucking and

labor expenses increased

approximately $10.2 million for

fiscal

2023.

Payroll, taxes and benefits expense

The

increase

payroll,

taxes

and

benefits

expense

primarily

due

increase

the

accrual

for

anticipated

performance-based bonuses.

Other expenses

The increase in other

expenses is due to

increased legal expenses of

approximately $3.6 million

as well as inflationary

pressure increasing costs.

OPERATING

INCOME (LOSS)

As a result of the above, our operating income was $967.7 million for fiscal 2023

compared to $143.5 million for fiscal 2022.

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

items

not

directly

charged

to,

operations

such

interest

income

and

expense, equity in income or loss of unconsolidated entities, and patronage dividends,

among other items.

The Company recorded interest income of $18.6 million in fiscal 2023,

compared to $988 thousand in fiscal 2022, primarily due

to significantly

higher cash

and cash

equivalents and

investment securities

available-for-sale balances

and yields.

recorded

interest expense of $583 thousand and $403 thousand

in fiscal 2023 and 2022, respectively, primarily related to commitment fees

on our Credit Facility described below.

Equity in income from unconsolidated entities for fiscal 2023 was $746

thousand compared to $1.9 million for fiscal 2022.

Other, net

for fiscal 2023

was income of

$1.9 million compared

to $9.8 million for

fiscal 2022.

The majority of

the decrease is

due

our

acquisition

fiscal

2022

the

remaining

50% membership

interest

Red

River

Valley

Egg

Farm,

LLC

(“Red

River”) as we recognized a $4.5 million gain in fiscal 2022 due to the remeasurement of our equity investment.

We also received

$1.4 million in fiscal 2022 related

to our review and adjustment

of our various marketing agreements. Additionally, the Company

recorded a $2 million impairment of an investment in an unconsolidated entity

in fiscal 2023.

INCOME TAXES

For

the

fiscal

year

ended

June

2023,

our

pre-tax

income

was

$998.6

million,

compared

$166.0

million

for

fiscal

2022.

Income tax expense of $241.8 million

was recorded for fiscal 2023 with an effective

tax rate of 24.2%.

For fiscal 2022, income

tax expense was $33.6 million with an effective tax rate

of 20.2%. Included in fiscal 2022 income tax expense is the discrete tax

benefit of

$8.3 million

discussed in

Note 2 – Acquisition

of Part

II. Item

8. Notes

to Consolidated

Financial Statements

in this

Annual Report.

Excluding the discrete

tax benefit,

income tax expense

was $41.9

million with an

adjusted effective

tax rate of

25.2%.

At June 3, 2023, the Company had

an income tax receivable of $67.0 million compared to

$42.1 million at May 28, 2022. During

fiscal 2022,

the Company

filed federal

carryback tax

returns for

fiscal 2020

and 2021

taxable net

operating losses

to recover

portion of

taxes paid

in fiscal 2015

and fiscal

2016. Subsequent

to fiscal

2023, we

received $31.8

million of

the $34.9

million

fiscal 2021 refund and believe we will receive the remaining amount of the fiscal 2020 and 2021 refunds, totaling

$11.7 million,

during our second fiscal quarter of 2024.

An additional $23.5 million income tax receivable was recorded as of June 3, 2023 for

fiscal 2023 federal overpayments in excess of federal tax liability.

Items causing

our effective

tax rate

to differ

from the

federal statutory

income tax

rate of

21% are

state income

taxes, certain

federal tax

credits and

certain items included

in income or

loss for financial

reporting purposes that

are not included

in taxable

income or

loss for income

tax purposes, including

tax exempt interest

income, certain

nondeductible expenses,

and net income

or loss attributable to noncontrolling interest.

NET LOSS ATTRIBUTABLE

TO NONCONTROLLING INTEREST

Net loss attributable

to noncontrolling

interest was $1.3

million for fiscal

2023

compared to a

$209 thousand

net loss for

fiscal

2022.

NET INCOME ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

As a result of the above, net income attributable to Cal-Maine Foods, Inc. for fiscal

2023 was $758.0 million, or $15.58 per basic

and $15.52 per diluted share, compared to $132.7 million, or $2.73 per basic

and $2.72 per diluted share for fiscal 2022.

Fiscal Year

Ended May 28, 2022 Compared to Fiscal Year

Ended May 29, 2021

The discussion

of our

results of

operations for

the fiscal

year ended

May 28,

2022 compared

to the

fiscal year

ended May

29,

2021 can be found in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results

of Operations in

the Company’s fiscal 2022

Annual Report on Form 10-K.

LIQUIDITY AND CAPITAL

RESOURCES

Working

Capital and Current Ratio

Our working capital at

June 3, 2023 was

$942.2 million, compared to $476.8 million at

May 28, 2022.

The calculation of working

capital is defined as current assets less current liabilities. Our current ratio was 6.16 at June 3, 2023 compared to 3.58 at May 28,

2022.

The current

ratio is

calculated

by dividing

current assets

by current

liabilities. The

increase

in our

working

capital and

current ratio

is primarily due

to the increase

in total current

assets, which increased

by $463.4 million

to $1.1 billion

at June 3,

2023,

due

to significant

increases in

cash and

cash equivalents

and

investment

securities available

-for-sale.

Due to

seasonal

factors described in

Part I. Item I. Business – Seasonality

, we generally expect

our need for working

capital to be highest in

the

fourth and first fiscal quarters ending in May/June and August/September,

respectively.

Cash Flows from Operating Activities

Net cash provided

by operating activities

was $863.0

million for fiscal

year 2023

compared with $126.2

million for fiscal

year

2022.

The increase in cash flow from operations

resulted primarily from higher selling prices for conventional eggs

as well as the

increased volume of specialty eggs

sold, partially offset by the increased

cost of feed ingredients and processing,

packaging and

warehouse costs.

Cash Flows from Investing Activities

continue

invest

our

facilities,

with

$136.6

million

used

purchase

property,

plant

and

equipment

for

fiscal

2023,

compared to $72.4

million in fiscal 2022.

These investments were primarily

made to expand our

cage-free production capacity.

have for many years

invested substantial amounts

to expand our cage-free

production capacity and

expect to continue to

so.

Purchases

investments

were

$530.8

million

fiscal

2023,

compared

$98.2

million

fiscal

2022.

The

increase

purchases of

investment securities

is primarily

due to

the utilization

of increased

liquidity resulting

from increased

cash flows

provided by operating

activities noted above.

Sales and maturities

of investment securities

were $291.8

million for fiscal

2023,

compared to $92.7 million

for fiscal 2022. During fiscal

2022, we also acquired the

remaining 50% membership interest

in Red

River for $44.8 million, net of cash acquired.

Cash Flows from Financing Activities

We paid dividends

totaling $252.3 million and $6.1 million in fiscal 2023

and 2022, respectively.

As of

June 3,

2023, cash

increased

$233.7 million

since May

28, 2022,

compared to

an increase

of $1.7

million during

fiscal

2022.

Credit Facility

We had no

long-term debt outstanding at the end of fiscal 2023

and 2022. On November 15, 2021, we entered

into an Amended

and Restated Credit Agreement (as amended the “Credit

Agreement”) with a five-year term. The Credit Agreement provides for

a senior

secured revolving

credit facility

(the “Credit

Facility”), in

an initial

aggregate principal

amount of

up to

$250 million.

As of June 3, 2023, no amounts were borrowed under

the Credit Facility. We

have $4.3

million in outstanding standby letters of

credit, which were issued under our Credit Facility for the

benefit of certain insurance companies. In May 2023,

we entered into

an amendment to

the Credit Agreement

to replace the

London Interbank Offered

Rate interest rate

benchmark. Refer

to Part II.

Item 8. Notes to the Financial Statements,

Note 10 – Credit Facility

for further information regarding our long-term debt.

Material Cash Requirements

Material cash

requirements for

operating activities

primarily consist

of feed

ingredients, processing,

packaging and

warehouse

costs, employee related

costs, and other

general operating expenses,

which we expect

to be paid

from our cash

from operations

and cash and

investment securities on

hand for at

least the next

12 months. While

volatile egg prices

and feed ingredient

costs,

among

other

things,

make

long-term

predictions

difficult,

have

substantial

liquid

assets

and

availability

under

our

Credit

Facility to fund future operating requirements.

Our material cash requirements for capital expenditures consist primarily

of our projects to increase our cage-free production

capacity. We

continue to monitor the increasing demand for cage-free eggs and to engage

with our customers in efforts to help

them achieve their announced timelines for cage-free egg sales. The following

table presents material construction projects

approved as of June 3, 2023 (in thousands):

Project(s) Type

Projected

Completion

Projected Cost

Spent as of

June 3, 2023

Remaining

Projected Cost

Cage-Free Layer & Pullet Houses

Fiscal 2024

54,702

18,900

35,802

Cage-Free Layer & Pullet Houses

Fiscal 2025

40,099

27,152

12,947

Cage-Free Layer & Pullet Houses

Fiscal 2026

38,883

19,218

19,665

Cage-Free Layer & Pullet Houses

Fiscal 2027

56,923

20,472

36,451

190,607

85,742

104,865

The

following

table

summarizes

fiscal

year

the

future

estimated

cash

payments,

thousands,

made

under

existing

contractual obligations

as of

June 3, 2023.

Further information

on debt

obligations is

contained in

Note 10 – Credit Facility

Part II. Item 8. Notes to the Consolidated Financial Statements. As of June 3, 2023,

we had no outstanding long-term debt.

Payments due by period

Total

Less than

1 year

1-3

years

3-5

years

More than

5 years

Lease obligations

1,714

796

914

—

Purchase obligations:

Feed ingredients and fuel

(a)

123,321

—

Construction contracts and other equipment

105,414

61,108

44,306

—

Total

230,449

185,225

45,220

—

(a)

Actual purchase obligations may change based on the contractual terms and

agreements

We believe our

current cash balances, investments, cash flows from operations, and

Credit Facility will be sufficient to fund our

capital needs for at least the next 12 months and to fund our capital commitments

currently in place thereafter.

IMPACT OF

RECENTLY

ISSUED ACCOUNTING STANDARDS

For information on changes in accounting

principles and new accounting principles,

see “

New Accounting Pronouncements

and

Policies

” in Part II. Item 8. Notes to Consolidated Financial Statements,

Note 1 - Summary of Significant Accounting Policies

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates

and assumptions

that affect the

reported amounts of

assets and liabilities

at the date

of the financial

statements and the

reported amounts of

revenues

and expenses during the reporting period. Actual results could

differ from these estimates. Critical accounting estimates are

those

estimates made in

accordance with GAAP

that involve a

significant level of estimation

uncertainty and have had

or are reasonably

likely to have a material impact

on the financial condition or results

of operations. Our critical accounting estimates are described

below.

BUSINESS COMBINATION

The Company applies the acquisition

method of accounting, which

requires that once control is obtained,

all the assets acquired

and liabilities assumed,

including amounts

attributable to noncontrolling

interests, are recorded

at their respective

fair values at

the

date

of acquisition.

The

excess

the

purchase

price

over

fair

values

identifiable

assets

and

liabilities

recorded

goodwill.

typically

use the

income method

approach for

intangible assets

acquired

in a

business combination.

Significant

judgment

exists in valuing certain

intangible assets. and the

most significant assumptions requiring

judgment involve estimating the

amount

and timing of

future cash flows,

growth rates,

discount rates selected

to measure

the risks inherent

in the future

cash flows and

the asset’s expected useful lives.

The

fair

values

identifiable

assets

and

liabilities

are

determined

internally

and

requires

estimates

and

the

use

various

valuation techniques. When a

market value is not

readily available, our internal

valuation methodology considers the

remaining

estimated life

of the

assets acquired

and significant

judgment is

required

as management

determines the

fair market

value for

those assets.

Due

inherent

industry

uncertainties

including

volatile

egg

prices

and

feed

costs,

unanticipated

market

changes,

events,

circumstances may occur that could affect the estimates and assumptions

used, which could result in subsequent impairments.

INVENTORIES

Inventories of eggs, feed,

supplies and flocks

are valued principally

at the lower

of cost (first-in,

first-out method) or

net realizable

value. If

market

prices

for

eggs and

feed

grains

move

substantially

lower,

record

adjustments

write

down

the

carrying

values of eggs

and feed inventories

to fair market

value. The cost

associated with flock inventories,

consisting principally of chick

purchases, feed, labor, contractor payments and

overhead costs, are accumulated during the growing period of approximately 22

weeks. Capitalized flock costs are then amortized over the flock’s productive

life, generally one to two years. Judgment exists in

determining

the flock’s

productive life

including

factors such

as laying

rate and

egg size,

molt cycles,

and customer

demand.

Furthermore, other factors such as

hen type or weather conditions could affect

the productive life. These factors could

make our

estimates of productive life differ from actual results. Flock mortality is charged to cost of sales as incurred. High mortality from

disease or extreme temperatures will

result in abnormal write-downs to

flock inventories. Management continually monitors each

flock and attempts to take appropriate actions to minimize the risk of mortality

loss.

GOODWILL

result

acquiring

businesses,

the

Company

has

$44.0

million

goodwill

June

2023.

Goodwill

evaluated

for

impairment

annually

first

performing

qualitative

assessment

determine

whether

quantitative

goodwill

test

necessary. After

assessing the totality of events or

circumstances, if we determine it

is more likely than not that the

fair value of

a reporting unit is less than its carrying

amount, then we perform additional quantitative tests to

determine the magnitude of any

impairment.

The

Company

has

determined

that

all

our

locations

similar

economic

characteristics

and

support

each

other

the

production of eggs and customer support. Therefore, we aggregate all our locations as a single reporting unit for testing goodwill

for

impairment.

When

the

Company

acquires

new

location,

determine

whether

should

integrated

into

our

single

reporting unit or

treated as a

separate reporting unit. Historically, we

have concluded that

acquired operations should be

integrated

into our single reporting unit due to the operational changes, redistribution of customers, and significant changes in management

that occur when we acquire businesses, which result in the acquired operations sharing

similar economic characteristics with the

rest of our locations. Once goodwill associated with acquired operations becomes part of goodwill of our single reporting unit, it

no longer represents the particular

acquired operations that gave rise to the

goodwill. We

may conclude that a business acquired

in the future should be treated as a separate reporting unit, in which case it would be tested separately

for goodwill impairment.

At June 3, 2023, goodwill represented 2.3% of total assets and 2.7% of stockholders’

equity.

Judgment exists in management’s evaluation

of the qualitative factors which include macroeconomic conditions, the current egg

industry environment, cost inputs such as

feed ingredients and overall financial performance. Furthermore, judgment

exists in the

evaluation

of the

threshold of

whether it

is more

likely than

not that

the fair

value of

a reporting

unit is

less than

its carrying

amount. Uncertainty exists due to uncontrollable events that could occur

that could negatively affect our operating conditions.

During the fourth quarter of

2023, we elected to change the

date of our annual impairment assessment

from year-end to

the first

day of the fourth quarter.

The change was made to

more closely align the impairment

assessment date with our annual

planning

and forecasting

process. The change

in impairment

assessment date

did not

have any

impact on

goodwill or

the impairment

goodwill.

The change

has been

applied prospectively

and will

not have

an impact

on a

retrospective basis.

During our

annual

impairment

test

fiscal

2023,

determined

that

goodwill

passed

the

qualitative

assessment

and

therefore

quantitative

analysis of goodwill impairment was necessary.

REVENUE RECOGNITION

Revenue recognition is completed upon satisfaction of the performance obligation to the customer, which typically occurs within

days of the Company and customer

agreeing upon the order.

See

Note 13 – Revenue Recognition

in Part II. Item 8. Notes to the

Consolidated Financial Statements for further discussion of the policy.

The Company believes

the performance obligation

is met upon delivery

and acceptance of

the product by

our customers. Costs

to deliver

product to

customers are

included in selling,

general and

administrative expenses

in the

accompanying Consolidated

Statements

Income. Sales

revenue

reported

the

accompanying

Consolidated

Statements

Income

reduced

reflect

estimated returns

and allowances. The

Company records

an estimated

sales allowance

for returns

and discounts

at the

time of

sale using historical trends based on actual sales returns and sales.

The Company periodically provides

incentive offers to its

customers to encourage purchases.

Such offers include current

discount

offers (e.g., percentage discounts off current purchases),

inducement offers (e.g., offers for future discounts

subject to a minimum

current purchase), and other similar offers. Current discount offers, when accepted by customers, are treated as a reduction to the

sales price

of the

related transaction,

while inducement

offers, when

accepted by

customers, are

treated as

a reduction

to sales

price based on estimated future redemption rates.

Redemption rates are estimated using the Company’s

historical experience for

similar inducement offers. Current discount and inducement offers

are presented as a net amount in ‘‘Net

sales.’’

As the

estimates noted

above are

based on

historical information,

we do

not believe

that there

will be

a material

change in

the

estimates and assumptions used

to recognize revenue. However,

if actual results varied significantly

from our estimates it could

expose us to material gains or losses.

LOSS CONTINGENCIES

The Company evaluates

whether a loss contingency

exists, and if the

assessment of a contingency

indicates it is probable

that a

material loss has

been incurred and

the amount of

the loss can

be reasonably estimated,

the estimated loss

would be accrued

the Company’s financial statements.

The Company expenses the costs of litigation as they are incurred.

There

were

loss

contingency

reserves

for

the

past

three

fiscal

years.

Our

evaluation

whether

loss

contingencies

exist

primarily relates to

litigation matters. The

outcome of litigation

is uncertain due

to, among other

things, uncertainties regarding

the facts will be established

during the proceedings, uncertainties

regarding how the law will

be applied to the facts

established,

and uncertainties

regarding the

calculation of

any potential

damages or

the costs

of any

potential injunctive

relief. If

the facts

discovered or the Company’s

assumptions change, future reserves for

loss contingencies may be required.

Results of operations

may be materially affected by losses or a loss contingency reserve

resulting from adverse legal proceedings.

INCOME TAXES

determine our

effective tax

rate by estimating

our permanent differences

resulting from differing

treatment of items

for tax

and accounting purposes. Judgment and uncertainty exist with management’s application of tax regulations

and evaluation of the

more-likely-than-not recognition and measurement thresholds. We

are periodically audited by taxing authorities. An adverse tax

settlement could have a negative impact on our effective tax rate

and our results of operations.

ITEM 7A.

QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISKS

COMMODITY PRICE RISK

Our primary exposure to market risk arises from changes

in the prices of conventional eggs,

which are subject to significant price

fluctuations that are largely

beyond our control. We

are focused on growing our

specialty shell egg business because

the selling

prices

specialty

shell

eggs are

generally

not

volatile

as conventional

shell

egg

prices. Our

exposure

market

risk

also

includes changes in

the prices of corn

and soybean meal,

which are commodities

subject to significant

price fluctuations due

market conditions

that are

largely beyond

our control.

ensure continued

availability of

feed ingredients,

we may

enter into

contracts for future

purchases of corn

and soybean meal,

and as part of

these contracts, we

may lock-in

the basis portion

of our

grain purchases several months in

advance and commit to purchase

organic ingredients to help

assure supply.

Ordinarily, we

not enter

long-term contracts

beyond a

year to

purchase corn

and soybean

meal or

hedge against

increases in

the price

of corn

and soybean meal.

The following table

outlines the impact

of price changes

for corn and

soybean meal on

feed costs per dozen

as feed ingredient pricing varies:

Change in price per bushel of corn

(0.84)

(0.56)

(0.28)

0.00

0.28

0.56

0.84

Change

in price

per ton

soybean

meal

(76.50)

0.616

0.626

0.636

0.646

0.656

0.666

0.676

(51.00)

0.626

0.636

0.646

0.656

0.666

0.676

0.686

(25.50)

0.636

0.646

0.656

0.666

0.676

0.686

0.696

0.00

0.646

0.656

0.666

0.676

(a)

0.686

0.696

0.706

25.50

0.656

0.666

0.676

0.686

0.696

0.706

0.716

51.00

0.666

0.676

0.686

0.696

0.706

0.716

0.726

76.50

0.676

0.686

0.696

0.706

0.716

0.726

0.736

(a)

Based on 2023

actual costs, table flexes feed cost inputs to show $0.01 impacts to per dozen egg feed production

costs.

INTEREST RATE

RISK

have

$250 million

Credit

Facility,

borrowings

under

which

would

bear

interest

variable

rates.

amounts

were

outstanding under that facility during fiscal 2023 or fiscal 2022. Under our current policies, we do not use interest rate derivative

instruments to manage our exposure to interest rate changes.

FIXED INCOME SECURITIES RISK

At June 3,

2023,

the effective maturity

of our cash equivalents

and investment securities

available for sale

was 4.8 months, and

the composite credit rating of

the holdings are AA- /

Aa3 / AA- (S&P

/ Moody’s / Fitch). Generally speaking, rising

interest rates,

as have

been

experienced

in recent

periods,

decrease

the value

of fixed

income

securities

portfolios.

As of

June 3,

2023,

the

estimated fair value

of our

fixed income securities

portfolio was approximately

$355 million

and reflected

unrealized losses

approximately

$2.4

million.

For

additional

information

see

Note 1 – Summary of Significant Accounting Policies

under

the

heading

“Investment

Securities”

and

Note 3 – Investment Securities

Part

II.

Item

Notes

the

Consolidated

Financial

Statements.

CONCENTRATION

OF CREDIT RISK

Our financial instruments exposed to concentrations of credit risk consist primarily of trade receivables. Concentrations of credit

risk with

respect to

receivables are

limited due

to our

large number

of customers

and their

dispersion across

geographic areas,

except that

at June 3,

2023 and

May 28,

2022, 30.1%

and 27.9%,

respectively,

of our net

accounts receivable

balance was due

from

Walmart

Inc.

(including

Sam’s

Club).

other

single

customer

group

represented

10%

greater

net

accounts receivable at June 3, 2023 and May 28, 2022.

ITEM 8.

FINANCIAL

STATEMENTS

AND SUPPLEMENTARY

DATA

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Cal-Maine Foods, Inc. and Subsidiaries

Ridgeland, Mississippi

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Cal-Maine Foods, Inc. and Subsidiaries as of June 3,

2023 and

May 28, 2022,

the related consolidated

statements of

income, comprehensive

income, stockholders’

equity,

and cash

flows for each

of the three

years in the

period ended June

3, 2023, and

the related consolidated

notes and schedule

listed in the

Index

Items

15(a)(1)

and

15(a)(2)

(collectively

referred

the

“consolidated

financial

statements”).

our

opinion,

the

consolidated

financial

statements

present

fairly,

all

material

respects,

the

financial

position

Cal-Maine

Foods,

Inc.

and

Subsidiaries as of

June 3, 2023

and May

28, 2022, and

the results of

their operations

and their cash

flows for each

of the three

years

the

period

ended

June

2023,

conformity

with

accounting

principles

generally

accepted

the

United

States

America.

also have

audited, in

accordance with

the standards

of the

Public Company

Accounting Oversight

Board (United

States) (“PCAOB”),

the Cal-Maine

Foods,

Inc.

and Subsidiaries’

internal

control over

financial

reporting

as of

June 3,

2023,

based

the

criteria

established

2013

Internal

Control

–

Integrated

Framework

issued

the

Committee

Sponsoring

Organizations of the Treadway

Commission and our report dated July 25, 2023 expressed an unqualified

opinion.

Basis for Opinion

These

consolidated

financial

statements

are

the

responsibility

the

entities’

management.

Our

responsibility

express an

opinion on

these consolidated

financial statements

based on

our audits.

are a

public accounting

firm registered

with the PCAOB and

are required to be

independent with respect to

Cal-Maine Foods, Inc.

and Subsidiaries in accordance

with

the

U.S.

federal

securities

laws and

the

applicable

rules

and

regulations

of the

Securities and

Exchange

Commission

and

the

PCAOB.

conducted

our audits

in accordance

with the

standards of

the PCAOB.

Those

standards require

that we

plan and

perform

the

audit

obtain

reasonable

assurance

about

whether

the

consolidated

financial

statements

are

free

material

misstatement,

whether

due

error

fraud.

Our

audits

included

performing

procedures

assess

the

risks

material

misstatement of the

consolidated financial statements,

whether due to error

or fraud, and performing

procedures that respond

those

risks.

Such

procedures

included

examining,

test

basis,

evidence

regarding

the

amounts

and

disclosures

the

consolidated financial

statements. Our

audits also

included evaluating

the accounting

principles used

and significant

estimates

made

by management,

as well

as evaluating

the overall

presentation

of the

consolidated financial

statements. We

believe

our

audits provide a reasonable basis for our opinion.

Critical Audit Matter

The

critical

audit

matter

communicated

below

matter

arising

from

the

current

period

audit

the

consolidated

financial

statements

that

were

communicated

required

communicated

the

Audit

Committee

and

that:

(1)

relate

accounts

or disclosures

that are

material

to the

consolidated

financial

statements and

(2) involved

our especially

challenging,

subjective, or

complex judgments. The

communication of

the critical audit

matter does

not alter in

any way

our opinion on

the

consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,

providing

a separate opinion on the critical audit matter or on the accounts or disclosures to

which it relates.

Contingent Liabilities – Litigation and Claims – Refer to Note 16 in the Consolidated

Financial Statements

Critical Audit Matter Description

Cal-Maine Foods, Inc. and Subsidiaries record liabilities for legal proceedings and claims in those instances where they

can reasonably estimate the amount of the loss and when the liability is probable.

Where the reasonable estimate of the probable

loss is a range, Cal-Maine

Foods, Inc. and Subsidiaries record

the most likely estimate of

the loss, or the low end of

the range if

there is no one best estimate.

Cal-Maine Foods, Inc. and Subsidiaries either disclose the

amount of a possible loss

or range of loss

excess

established

accruals

estimable,

states

that

such

estimate

cannot

made.

Cal-Maine

Foods,

Inc.

and

Subsidiaries disclose significant

legal proceedings and

claims even where

liability is not

probable or the

amount of the

liability

is not

estimable, or

both, if

Cal-Maine Foods,

Inc. and

Subsidiaries believe

there is

at least

a reasonable

possibility that

a loss

may be incurred.

We identified litigation and claims as a critical

audit matter because of the challenges

auditing management’s judgments

applied

determining

the

likelihood

loss

the

resolution

such

claims.

Specifically,

auditing

management’s

determination of

whether any

contingent loss

arising from

the related

litigation and

claims is

probable, reasonably

possible, or

remote, and the related disclosures, is subjective and requires significant judgment

due to the sensitivity of the issue.

How the Critical Audit Matter was addressed during

the Audit

Addressing the

matter involved

performing procedures

and evaluating

audit evidence

in connection

with forming

our

overall

opinion

the

consolidated

financial

statements.

These

procedures

included

testing

the

effectiveness

the

controls

relating to the

Cal-Maine Foods, Inc.

and Subsidiaries’ evaluation

of the

liability related

to legal

proceedings and claims,

including

controls over determining the likelihood

of a loss

and whether the amount

of loss can be

reasonably estimated, as well

as financial

statement disclosures over the legal proceedings and claims.

These procedures also included obtaining and evaluating

the letters

of audit inquiry with external

legal counsel, evaluating the reasonableness of

Cal-Maine Foods, Inc. and Subsidiaries’ assessment

regarding

whether

unfavorable

outcome

reasonably

possible

probable,

and

reasonably

estimable,

evaluating

the

sufficiency

of Cal-Maine

Foods, Inc.

and Subsidiaries’

disclosures

to legal

proceedings and

claims and

evaluating

the

completeness and accuracy of Cal-Maine Foods, Inc. and Subsidiaries’ legal

contingencies.

/s/ Frost, PLLC

We have served

as the Company’s auditor since 2007.

Little Rock, Arkansas

July 25, 2023

Cal-Maine Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except for par value amounts)

June 3, 2023

May 28, 2022

Assets

Current assets:

Cash and cash equivalents

292,824

59,084

Investment securities available-for-sale

355,090

115,429

Receivables:

Trade receivables, net

110,980

169,109

Income tax receivable

66,966

42,147

Other

9,267

8,148

Total receivables,

net

187,213

219,404

Inventories, net

284,418

263,316

Prepaid expenses and other current assets

5,380

4,286

Total current

assets

1,124,925

661,519

Property, plant &

equipment, net

744,540

677,796

Investments in unconsolidated entities

14,449

15,530

Goodwill

44,006

Intangible assets, net

15,897

18,131

Other long-term assets

10,708

10,507

Total assets

1,954,525

1,427,489

Liabilities and stockholders’ equity

Current liabilities:

Trade accounts payable

82,590

82,049

Dividends payable

37,130

36,656

Accrued wages and benefits

38,733

26,059

Income tax payable

8,288

25,687

Accrued expenses and other liabilities

15,990

14,223

Total current

liabilities

182,731

184,674

Other noncurrent liabilities

9,999

10,274

Deferred income taxes

152,212

128,196

Total liabilities

344,942

323,144

Commitments and contingencies - see

Note 16

—

Stockholders’ equity:

Common stock ($

0.01

par value):

Common stock – authorized

120,000

shares, issued

70,261

703

Class A convertible common stock – authorized and issued

4,800

Paid-in capital

72,112

67,989

Retained earnings

1,571,112

1,065,854

Accumulated other comprehensive loss, net of tax

(2,886)

(1,596)

Common stock in treasury,

at cost –

26,077

and

26,121

shares in 2023 and 2022,

respectively

(30,008)

(28,447)

Total Cal-Maine Foods,

Inc. stockholders’ equity

1,611,081

1,104,551

Noncontrolling interest in consolidated equity

(1,498)

(206)

Total stockholders’

equity

1,609,583

1,104,345

Total liabilities and stockholders’

equity

1,954,525

1,427,489

See Notes to Consolidated Financial Statements.

Cal-Maine Foods, Inc. and Subsidiaries

Consolidated Statements of Income

(in thousands, except per share amounts)

Fiscal years ended

June 3, 2023

May 28, 2022

May 29, 2021

53 weeks

52 weeks

Net sales

3,146,217

1,777,159

1,348,987

Cost of sales

1,949,760

1,440,100

1,188,326

Gross profit

1,196,457

337,059

160,661

Selling, general and administrative

232,207

198,631

183,943

Gain on insurance recoveries

(3,345)

(5,492)

—

(Gain) loss on disposal of fixed assets

(131)

383

2,982

Operating income (loss)

967,726

143,537

(26,264)

Other income (expense):

Interest expense

(583)

(403)

(213)

Interest income

18,553

988

2,828

Patronage dividends

10,239

10,130

9,004

Equity in income of unconsolidated entities

746

1,943

622

Other, net

1,869

9,820

4,074

Total other income

30,824

22,478

16,315

Income (loss) before income taxes

998,550

166,015

(9,949)

Income tax expense (benefit)

241,818

33,574

(12,009)

Net income

756,732

132,441

2,060

Less:

Net loss attributable to noncontrolling interest

(1,292)

(209)

—

Net income attributable to Cal-Maine Foods, Inc.

758,024

132,650

2,060

Net income per share attributable to Cal-Maine Foods, Inc.:

Basic

15.58

2.73

0.04

Diluted

15.52

2.72

0.04

Weighted average

shares outstanding:

Basic

48,648

48,581

48,522

Diluted

48,834

48,734

48,656

See Notes to Consolidated Financial Statements.

Cal-Maine Foods, Inc. and Subsidiaries

Consolidated Statements of

Comprehensive Income

(in thousands)

Fiscal years ended

June 3, 2023

May 28, 2022

May 29, 2021

Net income

756,732

132,441

2,060

Other comprehensive loss, before tax:

Unrealized holding loss available-for-sale securities, net of reclassification

adjustments

(1,714)

(1,398)

(736)

Increase in accumulated post-retirement benefits obligation, net of

reclassification adjustments

(27)

(9)

(137)

Other comprehensive loss, before tax

(1,741)

(1,407)

(873)

Income tax benefit related to items of other comprehensive loss

(451)

(369)

(236)

Other comprehensive loss, net of tax

(1,290)

(1,038)

(637)

Comprehensive income

755,442

131,403

1,423

Less: comprehensive loss attributable to the noncontrolling interest

(1,292)

(209)

—

Comprehensive income attributable to Cal-Maine Foods, Inc.

756,734

131,612

1,423

See Notes to Consolidated Financial Statements.

Cal-Maine Foods, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(in thousands)

Accum.

Other

Common Stock

Comp.

Amount

Class A

Amount

Treasury

Amount

Paid In

Capital

Retained

Earnings

Income

(loss)

Noncontrolling

Interest

Total

Balance at May 31, 2020

70,261

703

4,800

26,287

(26,674)

60,372

975,569

—

1,010,097

Stock compensation plan transactions

—

(85)

(759)

3,667

—

2,908

Dividends ($

0.034

per share)

Common

—

(1,489)

—

(1,489)

Class A common

—

(163)

—

(163)

Contributions

—

Net income

—

2,060

—

2,060

Other comprehensive loss, net of tax

—

(637)

—

(637)

Balance at May 29, 2021

70,261

703

4,800

—

26,202

(27,433)

64,044

975,977

(558)

—

1,012,781

Stock compensation plan transactions

—

(81)

(1,014)

3,945

—

2,931

Dividends ($

0.874

per share)

Common

—

(38,578)

—

(38,578)

Class A common

—

(4,195)

—

(4,195)

Contributions

—

Net income (loss)

—

132,650

—

(209)

132,441

Other comprehensive loss, net of tax

—

(1,038)

Balance at May 28, 2022

70,261

703

4,800

26,121

(28,447)

67,989

1,065,854

(1,596)

(206)

1,104,345

Stock compensation plan transactions

—

(44)

(1,561)

4,123

—

2,562

Dividends ($

5.161

per share)

Common

—

(227,993)

—

(227,993)

Class A common

—

(24,773)

—

(24,773)

Net income (loss)

—

758,024

—

(1,292)

756,732

Other comprehensive loss, net of tax

—

(1,290)

—

(1,290)

Balance at June 3, 2023

70,261

703

4,800

26,077

(30,008)

72,112

1,571,112

(2,886)

(1,498)

1,609,583

See Notes to Consolidated Financial Statements.

Cal-Maine Foods, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

Fiscal year ended

June 3, 2023

May 28, 2022

May 29, 2021

Cash flows from operating activities:

Net income

756,732

132,441

2,060

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization

72,234

68,395

59,477

Deferred income taxes

24,467

5,676

22,351

Equity in income of affiliates

(746)

(1,943)

(622)

Gain on insurance recoveries

(3,345)

(5,492)

—

Net proceeds from insurance settlement - business interruption

3,345

—

(Gain) loss on disposal of property,

plant and equipment

(131)

383

2,982

Stock compensation expense, net of amounts paid

4,205

4,063

3,778

Unrealized (gain) loss on investments

(745)

1,810

(Gain) loss on sales of investments

(2,208)

(22)

Purchases of equity securities

(85)

(356)

(334)

Sales of equity securities

1,739

4,939

Amortization (accretion) of investments

(4,380)

977

890

Impairment of investment in affiliate

2,000

—

Gain on change in fair value of investment in affiliates

—

(4,545)

—

Other

(109)

(231)

Change in operating assets and liabilities, net of effects from acquisitions:

Increase (decrease) in receivables and other assets

30,816

(93,897)

(33,487)

Increase in inventories

(21,102)

(36,152)

(31,159)

Increase (decrease) in accounts payable, accrued expenses and other

liabilities

(2,851)

54,782

(1,412)

Net cash provided by operating activities

863,010

126,209

26,136

Cash flows from investing activities:

Purchases of investments

(530,781)

(98,243)

(88,283)

Sales of investments

291,832

92,703

129,108

Acquisition of business, net of cash acquired

—

(44,823)

—

Investment in unconsolidated entities

(1,673)

(3,000)

—

Distributions from unconsolidated entities

1,500

400

6,663

Purchases of property,

plant and equipment

(136,569)

(72,399)

(95,069)

Net proceeds from insurance settlement - property,

plant and equipment

—

7,655

—

Net proceeds from disposal of property,

plant and equipment

580

686

3,390

Net cash used in investing activities

(375,111)

(117,021)

(44,191)

Cash flows from financing activities:

Principal payments on finance lease

(224)

(215)

(205)

Purchase of common stock by treasury

(1,643)

(1,127)

(871)

Payments of dividends

(252,292)

(6,117)

(1,652)

Contributions

—

Net cash used in financing activities

(254,159)

(7,456)

(2,723)

Increase (decrease) in cash and cash equivalents

233,740

1,732

(20,778)

Cash and cash equivalents at beginning of year

59,084

57,352

78,130

Cash and cash equivalents at end of year

292,824

59,084

57,352

Supplemental information:

Cash paid for operating leases

648

805

929

Income taxes paid

258,247

1,747

995

Interest paid

561

379

508

See Notes to Consolidated Financial Statements.

Cal-Maine Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

Cal-Maine

Foods,

Inc.

(“we,”

“us,”

“our,”

the

“Company”)

primarily

engaged

the

production,

grading,

packaging,

marketing and distribution

of fresh shell eggs,

including conventional, cage-free,

organic, brown, free

-range, pasture-raised and

nutritionally-enhanced

eggs.

The

Company,

which

headquartered

Ridgeland,

Mississippi,

the

largest

producer

and

distributor

fresh

shell

eggs

the

United

States

and

sells

the

majority

its

shell

eggs

states

across

the

southwestern,

southeastern, mid-western and mid-Atlantic regions of the United States.

Principles of Consolidation

The consolidated financial statements include

the accounts of all wholly-owned

subsidiaries and of majority-owned subsidiaries

over which we exercise control. All significant intercompany transactions and

accounts have been eliminated in consolidation.

Fiscal Year

The Company’s fiscal year-end

is on the Saturday closest to May 31. The fiscal year ended

June 3, 2023

, included

weeks and

the fiscal years ended May 28, 2022 and May 29, 2021 included

weeks.

Use of Estimates

The preparation of the consolidated financial statements in conformity

with generally accepted accounting principles (“GAAP”)

in the United States of America requires management to make

estimates and assumptions that affect the amounts

reported in the

consolidated financial statements and accompanying notes. Actual results could

differ from those estimates.

Cash Equivalents

The

Company

considers

all

highly

liquid

investments

with

maturity

three

months

less

when

purchased

cash

equivalents.

maintain

bank

accounts

that

are

insured

the

Federal

Deposit

Insurance

Corporation

$250,000. The

Company

routinely

maintains

cash

balances

with

certain

financial

institutions

excess

federally

insured

amounts.

The

Company has not experienced any loss in such accounts. The Company manages this risk through maintaining cash deposits and

other highly liquid investments in high quality financial institutions.

primarily utilize a

cash management system

with a series of

separate accounts consisting

of lockbox accounts

for receiving

cash, concentration

accounts to which

funds are moved,

and zero-balance disbursement

accounts for funding

accounts payable.

Checks issued,

but not

presented to

the banks

for payment,

may result

in negative

book cash

balances,

which are

included in

accounts payable.

Investment Securities

The Company

has determined

that its

debt securities

are available-for-sale

investments. We

classify these

securities as

current

because the amounts invested are available for current operations. Available

-for-sale securities are carried at fair value, based on

quoted market prices as of the balance sheet date, with unrealized gains and losses recorded in other comprehensive income. The

amortized cost of debt securities is adjusted for amortization

of premiums and accretion of discounts to maturity and

is recorded

in interest income. The Company regularly evaluates changes to the rating of

its debt securities by credit agencies and economic

conditions

to assess

and

record any

expected credit

losses through

allowance for

credit losses,

limited to

the amount

that fair

value was less than the amortized cost basis.

Investments

mutual

funds

are

recorded

fair

value

and

are

classified

“Other

long-term

assets”

the

Company’s

Consolidated Balance Sheets. Unrealized gains and losses for equity securities are recorded in other income (expenses) as Other,

net in the Company’s Consolidated

Statements of Income.

The cost

basis for

realized gains

and losses

on available-for-sale

securities is

determined by

the specific

identification method.

Gains and losses are recognized in other income (expenses) as Other,

net in the Company’s Consolidated

Statements of Income.

Interest and dividends on securities classified as available-for-sale

are recorded in interest income.

Trade Receivables

Trade receivables are stated at their carrying values, which include a reserve for credit

losses. At June 3, 2023 and May 28, 2022,

reserves for credit losses were $

579

thousand and $

775

thousand, respectively.

The Company extends credit to customers

based

on an

evaluation

of each

customer's financial

condition

and credit

history.

Collateral is

generally

not required.

The Company

minimizes exposure to

counter party credit

risk through credit analysis

and approvals, credit

limits, and monitoring

procedures.

In determining our

reserve for

credit losses, receivables

are assigned an

expected loss based

on historical loss

information adjusted

needed

for

economic

and

other

forward-looking

factors.

June

2023

and

May

28,

2022,

one

customer

accounted

for

approximately

30.1

% and

27.9

% of the Company’s trade accounts receivable,

respectively.

Inventories

Inventories of eggs, feed,

supplies and flocks

are valued principally

at the lower

of cost (first-in,

first-out method) or

net realizable

value.

The

cost

associated

with

flocks,

consisting

principally

chicks,

feed,

labor,

contractor

payments

and

overhead

costs,

are

accumulated during a growing period

of approximately

weeks. Flock costs are amortized

to cost of sales over

the productive

lives of the flocks, generally

one

two years

. Flock mortality is charged to cost of sales as incurred.

The

Company

does

not

disclose

the

gross

cost

and

accumulated

amortization

with

respect

its

flock

inventories

since

this

information is not utilized by management in the operation of the Company.

Property,

Plant and Equipment

Property,

plant and equipment

are stated at

cost. Depreciation is

provided by the

straight-line method over

the estimated useful

lives, which

are

years for

buildings and

improvements

and

years for

machinery and

equipment. Repairs

and

maintenance are expensed as incurred.

Expenditures that increase the

value or productive capacity of

assets are capitalized. When

property,

plant, and

equipment are

retired, sold,

or otherwise

disposed of,

the asset’s

carrying amount

and related

accumulated

depreciation are removed from the accounts and any gain or loss is included in operations. The Company capitalizes interest cost

incurred on funds used to construct property, plant, and equipment

as part of the asset to which it relates and amortizes such cost

over the asset’s

estimated useful life. When

certain events or changes

in operating conditions occur,

asset lives may be adjusted

and an impairment assessment may be performed on the recoverability

of the carrying amounts.

Investments in Unconsolidated Entities

The equity method

of accounting is used

when the Company can

exert significant influence

over an entity,

but does not control

its financial

and

operating

decisions.

Under

the

equity

method,

original

investments

are recorded

cost

and

adjusted

the

Company’s share of undistributed earnings

or losses of

these entities. Equity

investments without readily

determinable fair values,

when

the

Company

does

not

have

the

ability

exercise

significant

influence

over

the

investee,

are

recorded

cost,

less

impairment, plus or minus observable price changes.

The Company is a member of Eggland’s Best, Inc.

and ProEgg, Inc., which are cooperatives.

These investments are recorded at

cost, plus or minus any allocated equities and retains.

Goodwill

represents

the

excess

the

purchase

price

over

the

fair

value

the

identifiable

net

assets

acquired.

Goodwill

evaluated for impairment annually by first performing a qualitative assessment to determine whether a quantitative goodwill test

is necessary.

After assessing the totality

of events or circumstances,

if we determine it is

more likely than not

that the fair value

of a reporting

unit is less

than its carrying

amount, then we

perform additional

quantitative tests to

determine the

magnitude of

any impairment. During the

fourth quarter of 2023,

we elected to change

the date of

our annual impairment assessment

from year-

end to the

first day of

the fourth quarter.

The change

was made to

more closely

align the impairment

assessment date

with our

annual planning and forecasting process.

The change in impairment assessment date

did not have any impact on goodwill

or the

impairment of goodwill. The change has been applied prospectively

and would not have an impact on a retrospective basis.

Intangible Assets

Included in other intangible assets are separable intangible assets acquired in business acquisitions, which include franchise

fees,

non-compete agreements

and customer

relationship intangibles.

They are

amortized over

their estimated useful

lives of

years. The

gross

cost

and

accumulated

amortization

intangible

assets

are

removed

when

the

recorded

amounts

are

fully

amortized and

the asset is

no longer

in use or

the contract

has expired.

When certain

events or changes

in operating

conditions

occur, asset lives may

be adjusted and an

impairment assessment may be

performed on the recoverability

of the carrying amounts.

Accrued Self Insurance

We use a combination of insurance

and self-insurance mechanisms to provide coverage for the potential liabilities for health and

welfare,

workers’

compensation,

auto

liability

and

general

liability

risks.

Liabilities

associated

with

our

risks

retained

are

estimated, in part, by considering claims experience, demographic factors,

severity factors and other actuarial assumptions.

Dividend Payable

accrue dividends at

the end of

each quarter according

to the Company’s

dividend policy adopted

by its Board

of Directors.

The Company

pays a dividend

to shareholders

of its Common

Stock and

Class A Common

Stock on

a quarterly basis

for each

quarter for which the Company reports net income attributable to Cal-Maine

Foods, Inc. computed in accordance with GAAP in

an amount

equal to

one-third (

1/3

) of

such quarterly

income. Dividends

are paid

to shareholders

of record

as of

the 60th

day

following the last day of such quarter, except for the fourth fiscal quarter.

For the fourth quarter, the Company pays dividends to

shareholders of

record on

the 65th

day after

the quarter

end. Dividends

are payable

on the

15th day

following the

record date.

Following a quarter for which the Company does not report net income

attributable to Cal-Maine Foods, Inc., the Company will

not pay a dividend

for a subsequent profitable

quarter until the Company

is profitable on a cumulative

basis computed from the

date of the most recent quarter for which a dividend was paid.

Treasury Stock

Treasury

stock purchases

are accounted

for under

the cost

method whereby

the entire

cost of

the acquired

stock is

recorded as

treasury

stock. The

grant

restricted

stock

through

the

Company’s

share-based

compensation

plans

funded

through

the

issuance of

treasury stock. Gains

and losses

on the

subsequent reissuance

of shares

in accordance

with the

Company’s

share-

based compensation plans are credited or charged to paid-in

capital in excess of par value using the average-cost method.

Revenue Recognition and Delivery Costs

Revenue recognition is completed upon satisfaction of the performance obligation to the customer, which typically occurs within

days of

the Company

and customer

agreeing upon

the order.

See

Note 13 – Revenue Recognition

for further

discussion of

the

policy.

The Company believes

the performance obligation

is met upon delivery

and acceptance of

the product by

our customers. Costs

to deliver

product to

customers are

included in selling,

general and

administrative expenses

in the

accompanying Consolidated

Statements

Income.

Sales

revenue

reported

the

accompanying

Consolidated

Statements

Income

reduced

reflect

estimated returns

and allowances.

The Company

records an

estimated sales

allowance for

returns and

discounts at

the time

sale using historical trends based on actual sales returns and sales.

Advertising Costs

The Company expensed advertising

costs as incurred of $

3.4

million, $

12.6

million, and $

11.7

million in fiscal 2023, 2022,

and

2021, respectively.

Income Taxes

Income

taxes

are

accounted

for

using

the

liability

method.

Deferred

income

taxes

reflect

the

net

tax

effects

temporary

differences

between

the

carrying

amounts

assets

and

liabilities

for

financial

reporting

purposes

and

the

amounts

used

for

income tax purposes. The

Company’s policy with respect

to evaluating

uncertain tax

positions is

based upon whether

management

believes it

is more

likely than

not the

uncertain tax

positions will

be sustained

upon review

by the

taxing authorities.

The tax

positions must meet the more-likely-than-not

recognition threshold with consideration

given to the amounts and

probabilities of

the outcomes

that could

be realized

upon settlement

using the

facts, circumstances

and information

at the

reporting date.

The

Company

will reflect

only

the portion

of the

tax benefit

that will

sustained

upon resolution

of the

position

and

applicable

interest on the portion of the tax benefit not recognized. The Company initially and subsequently measures the largest amount

tax benefit

that is

greater than

50% likely

to be

realized upon

settlement with

a taxing

authority that

has full

knowledge of

all

relevant

information. The

Company

records

interest

and

penalties on

uncertain

tax

positions

component

income

tax

expense. Based

upon management’s

assessment, there

are no uncertain

tax positions expected

to have a

material impact on

the

Company’s consolidated

financial statements.

Stock Based Compensation

The

Company

recognizes

all

share-based

payments

employees

and

directors,

including

grants

employee

stock

options,

restricted stock and performance-based shares, in the Consolidated Statements

of Income based on their fair values. The benefits

tax

deductions

excess

recognized

compensation

cost

are

reported

financing

cash

flow. See

Note 14 – Stock

Compensation Plans

for more information.

Business Combinations

The Company applies the acquisition

method of accounting, which

requires that once control is obtained,

all the assets acquired

and liabilities assumed,

including amounts

attributable to noncontrolling

interests, are recorded

at their respective

fair values at

the date of acquisition. We

determine the fair values of identifiable assets and liabilities

internally,

which requires estimates and

the

use

various

valuation

techniques.

When

market

value

not

readily

available,

our

internal

valuation

methodology

considers the remaining estimated life of the assets acquired and what

management believes is the market value for those assets.

typically use the income

method approach for

intangible assets acquired in

a business combination. Significant

estimates in

valuing certain intangible assets include, but

are not limited to,

the amount and timing of

future cash flows, growth rates,

discount

rates and useful

lives. The excess

of the purchase

price over fair

values of identifiable

assets and liabilities

is recorded as

goodwill.

Loss Contingencies

Certain conditions may exist as of the date the financial statements are issued that may result in a loss to the Company but which

will only be

resolved when one

or more future

events occur or

fail to occur.

The Company’s

management and

its legal counsel

assess

such

contingent

liabilities,

and

such

assessment

inherently

involves

exercise

judgment.

assessing

loss

contingencies

to legal

proceedings

that are

pending against

the Company

or unasserted

claims that

may result

in such

proceedings, the Company’s

legal counsel evaluates

the perceived merits

of any legal

proceedings or unasserted

claims as well

as the perceived merits of the amount of relief sought or expected to be

sought therein.

If the assessment

of a contingency

indicates it is

probable that

a material loss

has been incurred

and the amount

of the liability

can be

estimated, the

estimated liability

would be accrued

in the Company’s

financial statements.

If the assessment

indicates a

potentially material loss contingency is

not probable, but is reasonably possible,

or is probable but cannot be estimated,

then the

nature of the

contingent liability,

together with an

estimate of the

range of possible

loss if determinable

and material, would

disclosed. Loss

contingencies considered

remote are

generally not

disclosed unless

they involve

guarantees, in

which case

the

nature of the guarantee would be disclosed.

The Company expenses the costs of litigation as they are incurred.

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective

during the fiscal year had or is expected to have a material impact on

our

Consolidated Financial Statements.

Note 2 – Acquisition

Effective on May 30, 2021, the Company acquired the remaining

% membership interest in Red River Valley

Egg Farm, LLC

(“Red River”),

including certain

liabilities. As

a result

of the

acquisition, Red

River became

a wholly

owned subsidiary

of the

Company. Red River owns and

operates a specialty

shell egg production

complex with approximately

1.7

million cage-free laying

hens,

cage-free

pullet capacity,

feed

mill, processing

plant, related

offices

and outbuildings

and

equipment located

approximately

400

acres near Bogata, Texas.

The

following

table

summarizes

the

consideration

paid

for

Red

River

and

the

amounts

the

assets

acquired

and

liabilities

assumed recognized at the acquisition date:

Cash consideration paid

48,500

Fair value of the Company's equity interest in Red River held before the business combination

48,500

97,000

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash

3,677

Accounts receivable, net

1,980

Inventory

8,789

Property, plant and equipment

85,002

Liabilities assumed

(2,448)

Deferred income taxes

(8,481)

Total identifiable

net assets

88,519

Goodwill

8,481

97,000

Cash and accounts receivable acquired along with liabilities

assumed were valued at their carrying

value which approximates fair

value due to the short maturity of these instruments.

Inventory consisted

primarily of

flock, feed

ingredients, packaging,

and egg

inventory.

Flock inventory

was valued at

carrying

value as management

believes that their

carrying value best

approximates their

fair value. Feed

ingredients, packaging

and egg

inventory were all valued based on market prices as of May 30, 2021.

Property,

plant and

equipment were

valued utilizing

the cost

approach which

is based

on replacement

or reproduction

costs of

the assets and subtracting any depreciation resulting from physical deterioration

and/or functional or economic obsolescence.

The Company recognized a gain of $

4.5

million as a result of remeasuring to fair value its

% equity interest in Red River held

before

the

business

combination.

The

gain

was

recorded

other

income

and

expense

under

the

heading

“Other,

net”

the

Company’s Condensed Consolidated Statements of Income. The acquisition

of Red River resulted

in a discrete tax

benefit of $

8.3

million,

which

includes

7.3

million

decrease

deferred

income

tax

expense

the

outside-basis

our

equity

investment in Red River, with a corresponding non-recurring,

non-cash $

955,000

reduction to income taxes expense on the non-

taxable remeasurement gain associated with the acquisition. As part of the acquisition accounting, the Company also

recorded an

8.5

million

deferred

tax

liability

for

the

difference

the

inside-basis

the

acquired

assets

and

liabilities

assumed.

The

recognition of deferred

tax liabilities resulted in

the recognition of goodwill.

None of the goodwill

recognized is expected

to be

deductible for income tax purposes.

Note 3 - Investment Securities

The following presents the Company’s

investment securities as of June 3, 2023 and May 28, 2022 (in thousands):

June 3, 2023

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated Fair

Value

Municipal bonds

16,571

—

275

16,296

Commercial paper

56,486

—

56,409

Corporate bonds

139,979

—

1,402

138,577

Certificates of deposits

675

—

675

US government and agency obligations

101,240

—

471

100,769

Asset backed securities

13,459

—

151

13,308

Treasury bills

29,069

—

29,056

Total current

investment securities

357,479

—

2,389

355,090

Mutual funds

2,172

—

2,081

Total noncurrent

investment securities

2,172

—

2,081

May 28, 2022

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated Fair

Value

Municipal bonds

10,136

—

10,104

Commercial paper

14,940

—

14,868

Corporate bonds

74,167

—

483

73,684

Certificates of deposits

1,263

—

1,245

US government and agency obligations

2,205

—

2,209

Asset backed securities

13,456

—

137

13,319

Total current

investment securities

116,167

742

115,429

Mutual funds

3,826

—

3,752

Total noncurrent

investment securities

3,826

—

3,752

Available-for-sale

Proceeds

from

the

sales and

maturities

available-for-sale

securities

were

291.8

million,

92.7

million,

and $

129.1

million

during fiscal 2023, 2022,

and 2021, respectively.

Gross realized gains for

fiscal 2023, 2022, and

2021 were $

thousand, $

181

thousand,

and

456

thousand,

respectively.

Gross

realized

losses

for

fiscal

2023,

2022,

and

2021

were

thousand,

thousand, and $

thousand, respectively. There

was

allowance for credit losses at June 3, 2023 and May 28, 2022.

Actual maturities may differ from contractual maturities because some

borrowers have the right to

call or prepay obligations with

without

call

prepayment

penalties.

Contractual

maturities

investment

securities

June

2023

are

follows

(in

thousands):

Estimated Fair Value

Within one year

269,830

1-5 years

85,260

Total

355,090

Noncurrent

Proceeds from sales and maturities of noncurrent investment securities were $

1.7

million, $

4.9

million, and $

thousand, during

fiscal 2023,

2022 and

2021, respectively.

Gross realized gains

on those sales

and maturities

during fiscal

2023,

2022 and 2021

were $

thousand, $

2.2

million and

611

thousand, respectively.

Gross realized

losses during

fiscal 2023

were $

thousand.

There were

realized losses for fiscal 2022 and 2021.

Note 4 - Fair Value

Measures

The Company

is required

to categorize

both financial

and nonfinancial

assets and

liabilities based

on the

following fair

value

hierarchy. The

fair value

of an

asset is

the price

at which

the asset

could be

sold in

an orderly

transaction between

unrelated,

knowledgeable, and willing

parties able to engage in

the transaction. A liability’s

fair value is defined

as the amount that would

be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be

paid to settle

the liability with the creditor.

●

Level 1

- Quoted prices in active markets for identical assets or liabilities

●

Level 2

- Inputs

other than

quoted

prices included

in Level

1 that

are observable

for the

asset or

liability,

either

directly or indirectly,

including:

Quoted prices for similar assets or liabilities in active markets

Quoted prices for identical or similar assets in non-active markets

Inputs other than quoted prices that are observable for the asset or liability

Inputs derived principally

from or corroborated by other observable market data

●

Level 3

- Unobservable inputs

for the asset

or liability supported

by little or

no market activity

and are significant

to the fair value of the assets or liabilities

The disclosure of fair value of certain financial assets and liabilities recorded

at cost are as follows:

Cash and cash equivalents, accounts receivable,

and accounts payable:

The carrying amount approximates fair value due to the

short maturity of these instruments.

Assets and Liabilities Measured at Fair

Value

on a Recurring Basis

In accordance with

the fair value hierarchy

described above, the

following table shows the

fair value of our

financial assets and

liabilities that are required to be measured at fair value on a recurring

basis as of June 3, 2023 and May 28, 2022 (in thousands):

June 3, 2023

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

—

16,296

—

16,296

Commercial paper

—

56,409

—

56,409

Corporate bonds

—

138,577

—

138,577

Certificates of deposits

—

675

—

675

US government and agency obligations

—

100,769

—

100,769

Asset backed securities

—

13,308

—

13,308

Treasury bills

—

29,056

—

29,056

Mutual funds

2,081

—

2,081

Total assets measured at fair

value

2,081

355,090

—

357,171

May 28, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

—

10,104

—

10,104

Commercial paper

—

14,868

—

14,868

Corporate bonds

—

73,684

—

73,684

Certificates of deposits

—

1,245

—

1,245

US government and agency obligations

—

2,209

—

2,209

Asset backed securities

—

13,319

—

13,319

Mutual funds

3,752

—

3,752

Total assets measured at fair

value

3,752

115,429

—

119,181

Investment securities – available-for-sale

classified as Level

2 consist of

securities with maturities of

three months or longer

when

purchased. We

classified these

securities as

current, because

amounts invested

are available

for current

operations. Observable

inputs for these securities are yields, credit risks, default rates, and volatility.

Note 5 - Inventories

Inventories consisted of the following (in thousands):

June 3, 2023

May 28, 2022

Flocks, net of amortization

164,540

144,051

Eggs and egg products

28,318

26,936

Feed and supplies

91,560

92,329

284,418

263,316

We grow and maintain

flocks of layers (mature female chickens), pullets (female chickens under 18 weeks of age), and breeders

(male and female

chickens used to

produce fertile eggs

to hatch for

egg production flocks).

Our total flock

at June 3,

2023 and

May 28, 2022,

consisted of approximately

10.8

million and

11.5

million pullets and

breeders and

41.2

million and

42.2

million

layers, respectively.

The Company expensed amortization and mortality associated with the

flocks to cost of sales as follows (in thousands):

June 3, 2023

May 28, 2022

May 29, 2021

Amortization

186,973

160,107

133,448

Mortality

10,455

8,011

6,769

Total flock costs charged

to cost of sales

197,428

168,118

140,217

Note 6 - Property,

Plant and Equipment

Property, plant and equipment

consisted of the following (in thousands):

June 3, 2023

May 28, 2022

Land and improvements

117,279

109,833

Buildings and improvements

552,669

517,859

Machinery and equipment

715,205

655,925

Construction-in-progress

98,605

71,967

1,483,758

1,355,584

Less: accumulated depreciation

739,218

677,788

744,540

677,796

Depreciation expense was

69.4

million, $

65.8

million and $

56.5

million in the fiscal

years ended June 3,

2023, May 28, 2022,

and May 29, 2021, respectively.

The Company

maintains insurance

for both

property damage

and business

interruption relating

to catastrophic

events, such

fires. Insurance recoveries

received for

property damage

and business

interruption in

excess of

the net

book value

of damaged

assets,

clean-up

and

demolition

costs,

and

post-event

costs are

recorded

within

“Gain

insurance

recoveries”

the period

received or committed when all contingencies associated with the recoveries are resolved. Losses related to property damage are

recorded within “(Gains) loss

on disposal of fixed assets”.

Insurance recoveries relating

to direct, recoverable costs for

business

interruption are recorded

as a reduction in cost of

sales on the Consolidated Statements

of Income. Insurance

claims incurred or

finalized

during

the fiscal

years ended

June 3,

2023,

May 28,

2022,

and

May

29,

2021 did

not have

a material

effect

the

Company’s consolidated

financial statements.

Note 7 - Investment in Unconsolidated Entities

As of

June 3,

2023

and

May 28,

2022,

the Company

owned

% in

Specialty

Eggs,

LLC (“Specialty

Eggs”)

and

Southwest

Specialty Eggs,

LLC (“Southwest

Specialty Eggs”),

which are

accounted for

using the

equity method

of accounting.

Specialty

Eggs owns the Egg-Land's Best franchise for most of Georgia and South Carolina, as well as

a portion of western North Carolina

and eastern Alabama. Southwest Specialty

Eggs owns the Egg-Land's Best franchise

for Arizona, southern California

and Clark

County, Nevada (including

Las Vegas).

As of May

29, 2021, the

Company owned

% in Red

River which was

acquired at the

beginning of

fiscal 2022 (see

Note 2 –

Acquisition

). The Company accounted for Red River using the equity method of

accounting in fiscal 2021.

Equity method investments are included

in “Investments in unconsolidated entities”

in the accompanying Consolidated Balance

Sheets and totaled $

9.7

million and $

10.5

million at June 3, 2023 and May 28, 2022, respectively.

Equity

income

unconsolidated

entities

746

thousand,

1.9

million,

and

622

thousand

from

these

entities

has

been

included in the Consolidated Statements of Income for fiscal 2023

2022, and 2021, respectively.

The condensed consolidated

financial information for

the Company’s unconsolidated joint

ventures was as

follows (in thousands):

For the fiscal year ended

June 3, 2023

May 28, 2022

May 29, 2021

Net sales

222,602

145,281

119,853

Net income

1,492

3,942

1,596

Total assets

27,784

42,971

106,592

Total liabilities

9,854

21,892

5,850

Total equity

17,930

21,079

100,742

The following relates to the Company’s

transactions with these unconsolidated affiliates (in thousands):

For the fiscal year ended

June 3, 2023

May 28, 2022

May 29, 2021

Sales to unconsolidated entities

136,351

94,311

56,765

Purchases from unconsolidated entities

75,024

60,016

76,059

Distributions from unconsolidated entities

1,500

400

6,663

June 3, 2023

May 28, 2022

Accounts receivable from unconsolidated entities

4,719

10,815

Accounts payable to unconsolidated entities

3,187

4,678

Note 8 - Goodwill and Other Intangible Assets

Goodwill and other intangibles consisted of the following (in thousands):

Other Intangibles

Franchise

Customer

Non-compete

Right of

Water

Total

Goodwill

rights

relationships

agreements

Use

rights

Trademark

intangibles

Balance May 29, 2021

35,525

16,699

1,688

1,019

720

186

55,866

Additions

8,481

—

8,491

Amortization

—

(1,628)

(362)

(159)

(21)

—

(50)

(2,220)

Balance May 28, 2022

44,006

15,071

1,326

860

720

136

62,137

Amortization

—

(1,657)

(356)

(152)

(18)

—

(51)

(2,234)

Balance June 3, 2023

44,006

13,414

970

708

—

720

59,903

For the Other Intangibles listed above, the gross carrying amounts and

accumulated amortization are as follows (in thousands):

June 3, 2023

May 28, 2022

Gross carrying

Accumulated

Gross carrying

Accumulated

amount

amortization

amount

amortization

Other intangible assets:

Franchise rights

29,284

(15,870)

29,284

(14,213)

Customer relationships

9,644

(8,674)

9,644

(8,318)

Non-compete agreements

1,450

(742)

1,450

(590)

Right of use intangible

239

(239)

239

(221)

Water rights *

720

—

720

—

Trademark

400

(315)

400

(264)

Total

41,737

(25,840)

41,737

(23,606)

Water rights are

an indefinite life intangible asset.

No significant residual value is estimated for these

intangible assets. Aggregate amortization expense for fiscal years 2023, 2022,

and 2021 totaled $

2.2

million, $

2.2

million, and $

2.5

million, respectively.

The following table presents the total estimated amortization of intangible

assets for the five succeeding years (in thousands):

For fiscal year

Estimated amortization expense

2024

2,170

2025

2,035

2026

1,831

2027

1,828

2028

1,758

Thereafter

5,555

Total

15,177

Note 9 - Employee Benefit Plans

The Company maintains a medical plan that is qualified under Section

401(a) of the Internal Revenue Code and is not subject to

tax under present income tax laws. The plan is funded by contributions from the Company and its employees. Under its plan, the

Company

self-insures

its

portion

medical

claims

for

substantially

all

full-time

employees. The

Company

uses

stop-loss

insurance

limit

its

portion

medical

claims

275,000

per

occurrence. The

Company's

expenses

including

accruals

for

incurred but not

reported claims were approximately

21.9

million, $

24.6

million, and $

21.7

million in fiscal years

2023, 2022,

and 2021, respectively.

The liability recorded

for incurred but

not reported claims

was $

2.9

million and $

2.8

million as of

June

2023

and

May 28,

2022,

respectively

and

are classified

within

“Accrued

expenses

and

other

liabilities”

the

Company’s

Consolidated Balance Sheets.

The Company

has a KSOP

plan that

covers substantially

all employees

(the “Plan”). The

Company makes

contributions to

the

Plan at a rate of

% of participants eligible compensation, plus an additional amount determined at the discretion of the Board of

Directors. Contributions

can be

made

in cash

the Company’s

Common

Stock,

and vest

immediately. The

Company’s

cash

contributions to the Plan were $

4.3

million, $

3.9

million, and $

3.8

million in fiscal years 2023, 2022 and 2021, respectively. The

Company did

t make direct contributions of the Company’s

Common Stock in fiscal years 2023, 2022, or 2021. Dividends on

the Company’s Common Stock are paid to the Plan in cash. The Plan acquires the Company’s Common Stock, which is listed on

the NASDAQ, by

using the dividends

and the Company’s

cash contribution to

purchase shares in

the public markets.

The Plan

sells Common Stock on the NASDAQ to pay benefits to Plan participants. Participants may make contributions to the Plan up to

the maximum allowed by the Internal Revenue Service regulations.

The Company does not match participant contributions.

Deferred Compensation Plans

The

Company

has

deferred

compensation

agreements

with

certain

officers

for

payments

made

over

specified

periods

beginning when the officers

reach age

or over as specified in the

agreements. Amounts accrued for the

agreements are based

upon

deferred

compensation

earned

over

the

estimated

remaining

service

period

each officer.

Payments

made

under

these

agreements

were

170

thousand in

fiscal

years

2023,

2022

and

2021. The

liability

recorded

these

agreements

was

1.0

million

and

1.1

million

June

2023

and

May

28,

2022,

respectively

and

are

classified

within

“Other

noncurrent

liabilities” in the Company’s Consolidated

Balance Sheets.

The

Company

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	6th grade V good

Cal-Maine Foods (CALM) 10-K2023 FY Annual report

Content analysis