Arden Hills-based Land O’Lakes Inc. is selling the bulk of its California egg operations, part of the company’s strategy to dump much of its egg business, the nation’s third-largest.
Land O’Lakes’ egg subsidiary is California-based Moark, which also has significant operations in Missouri and New England. The “majority” of Moark’s California assets are being sold to Southern California Egg Cooperative, Land O’Lakes confirmed Friday. The price was not disclosed.
Land O’Lakes’ egg business has lost money for the past three years, and the egg business is a volatile one, fraught with increasing uncertainty over animal rights issues. Legislative or ballot efforts to increase cage space for hens have been brewing.
California, often a bellwether state, will require egg producers by Jan. 1 to expand living space per hen to about 116 square inches, compared with an industry average of 67. All out-of-state egg producers must adopt California cage rules if they want to sell there.
Against that backdrop, Land O’Lakes adopted a plan late last year to “divest of substantially all of the assets of the West and Midwest regions of Moark,” according to its annual financial report. It’s not clear what will become of other egg operations in Maine and Connecticut.
Moark had 16.1 million hens at the end of last year, making it the third-largest U.S. egg producer as ranked by bird count, according to Egg Industry magazine. The country’s largest and second-largest producers had 32 million and 24.6 million hens.
The egg business made up a single-digit percentage of Land O’Lakes’ $14.2 billion in sales last year.