Vital Farms CEO says egg shortages will ease later this year, no plans to raise prices
Egg shortages have caused a frenzy among American shoppers this year as the bird flu epidemic takes a toll on US egg production.
But premium egg producer Vital Farms (VITL) expects some improvement later this year.
“Industry supply will remain under pressure to start the year due to the impact of HPAI [bird flu] on poultry flocks across the United States,” Vital Farms CEO Russell Diez-Canseco said in an earnings release. “However, as the year progresses, we believe the supply chain investments we made in 2024 and into 2025 will begin bearing fruit.”
Vital Farms stock jumped 4% in midday trading Friday following its fourth quarter results.
As of 3:39:25 PM EST. Market Open.
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In the three months ending Dec. 29, the company reported revenue rose 22.2% to $166 million. For the full year, revenue tallied $606 million. Vital Farms also said it expects its full-year 2025 revenue to be “at least” $740 million.
“Near-term demand trends are strong and the long-term runway is solid, given continued market share gains of pasture-raised eggs via favorable macro trends and initiatives, including higher household penetration, new distribution, greater shelf space, and new products,” Sarang Vora, a research analyst at Telsey Advisory Group, wrote in a note to clients.
As prices for regular eggs have risen, premium producers have benefited from a shrinking price difference for higher-end eggs.
Nationally, a dozen large Grade A eggs cost a record-high $4.95 in January, compared to $2.52 a year ago. It marked a 53% increase in the cost of eggs year over year, according to data from the Bureau of Labor Statistics, as overall grocery inflation rose 1.9% compared to a year ago.
Read more: From $5 eggs to insurance premiums, here’s where prices are rising
Although the US Department of Agriculture expects egg prices to increase 41% in 2025, Diez-Canseco told Yahoo Finance that Vital Farms has no plans to raise prices.
“We’re not playing a short-term game of … gaming the pricing in the marketplace,” Diez-Canseco said Friday (see video above).
He added that egg prices are “outrageous” right now, and Vital Farms plans to stick to its model.
“We’re building a brand for the long haul, and that’s resulted in very consistent growth with positive gross margins and profitability since the IPO,” he said. “That’s pretty rare for a small, fast-growing company like ours.”
Meanwhile, investors have also flocked to America’s largest egg producer, Cal-Maine Foods (CALM), which supplies eggs to Walmart (WMT) and many private-label brands. Cal-Maine shares increased 55% in the past year, while Vital Farms stock is up roughly 80%.
