8 Worst Small Cap Agriculture Stocks to Buy

2. Cal-Maine Foods, Inc. (NASDAQ:CALM)

Number of Hedge Fund Holders: 34

% of Short Float: 11.20%

Cal-Maine Foods, Inc. (NASDAQ:CALM) is the largest producer and distributor of fresh shell eggs in the United States, offering conventional, cage-free, organic, and specialty eggs under the trademarks Egg-Land’s Best, Land O’ Lakes, and Farmhouse Eggs. The company’s products are sold to national grocery chains, club shops, independent supermarkets, and food service distributors in different regions of the United States.

Cal-Maine Foods, Inc. (NASDAQ:CALM) shared strong earnings for Q2 FY25 ended November 30, 2024. Net sales grew to $954.7 million, nearly doubling from $523.2 million in the second quarter of FY24, thanks to higher egg prices and increasing sales volume. The company sold 329.8 million dozen eggs, up from 288.2 million in the prior year quarter, with specialty egg sales increasing by more than 25% to 120.2 million dozen. Net income rose to $219.1 million, or $4.47 per diluted share, from $17 million, or $0.35 per share, in Q2 FY24. Production expenses per dozen fell 8.5% year-on-year, driven by lower feed prices. However, greater costs for outside egg imports negated some cost savings as the company struggled to meet demand despite industry-wide supply constraints.

Despite significant earnings growth, Cal-Maine Foods, Inc. (NASDAQ:CALM)’s stock is down 11.53% year-to-date as of the writing of this article, reflecting widespread volatility among the worst-performing small-cap agriculture stocks. The company is still dealing with uncertainties as a result of avian influenza, which caused the depopulation of 38.4 million commercial layer hens in 2024, affecting supply levels and driving price swings. Concerns about potential future outbreaks and their impact on production have contributed to a larger short percentage of float as investors remain wary of the industry’s stability.

Looking ahead, Cal-Maine Foods, Inc. (NASDAQ:CALM) is expanding its production capacity, with $60 million set aside for new cage-free facilities that will house 1.1 million more hens by late summer 2025. The company is also investing in its egg products segment, which will improve processing capabilities for liquid egg products with a longer shelf life. While industry-wide supply restrictions exist, the company’s size and strategic acquisitions enable it to navigate market changes while aiming for long-term growth despite immediate hurdles.