UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      DC 20549





**FORM
      10-Q**


(mark
      one)





x
      Quarterly report
      pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For
      the
      quarterly period ended March 1, 2008




OR


o
      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: 000-04892





**CAL-MAINE
      FOODS, INC.**


(Exact
      name of registrant as specified in its charter)


**Delaware**
              **64-0500378**(State
                  or other Jurisdiction of
              (I.R.S.
                  Employer Identification No.)Incorporation
                  or Organization)





**3320
      Woodrow Wilson Avenue, Jackson, Mississippi 39209**


(Address
      of principal executive offices)  (Zip
      Code)





**(601)
      948-6813**


(Registrant’s
      telephone number, including area code)





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
x  No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of accelerated
      filer and large accelerated filer as defined in Rule 12b-2 of the Exchange
      Act.




Large
      Accelerated filer o Accelerated
      filer x Non-
      Accelerated filer o





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


Yes
o No
x





APPLICABLE
      ONLY TO CORPORATE ISSUERS:




Indicate
      number of shares outstanding of each of the issuer’s classes of common stock
      (exclusive of treasury shares), as of March 31, 2008.


Common
                  Stock, $0.01 par value
              21,312,291
                  sharesClass
                  A Common Stock, $0.01 par value
              2,400,000
                  shares









**CAL-MAINE
      FOODS, INC. AND SUBSIDIARIES**





**INDEX**


**Page****Number****Part
                  I.**
              **Financial
                  Information**Item
                  1.
              Condensed
                  Consolidated Financial Statements (unaudited)Condensed
                  Consolidated Balance Sheets -March
                  1, 2008 and June 2, 2007
              
              3Condensed
                  Consolidated Statements of Income -Thirteen
                  Weeks and Thirty-Nine Weeks EndedMarch
                  1, 2008 and March 3, 2007
              
              4Condensed
                  Consolidated Statements of Cash Flows -Thirty-Nine
                  Weeks Ended March 1, 2008 andMarch
                  3, 2007
              
              5Notes
                  to Condensed Consolidated Financial Statements
              
              6Item
                  2.
              Management’s
                  Discussion and Analysis ofFinancial
                  Condition and Results of Operations
              
              8Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              
              14Item
                  4.
              Controls
                  and Procedures
              
              15**Part
                  II.**
              **Other
                  Information**Item
                  1.
              Legal
                  Proceedings
              
              15Item
                  1A.
              Risk
                  Factors
              
              16Item
                  5.
              Other
                  Information
              
              17Item
                  6.
              Exhibits
              
              17Signatures
              
              
              18





2




**PART
      I. FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




**CAL-MAINE
      FOODS, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(in
      thousands)**




March
                1, 2008
            
            
            June
                2, 2007(unaudited)
            
            
            (note
                1)ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            85,798
            
            $
            15,032Investments
                (note 6)
            
            
            —
            
            
            39,500Trade
                and other receivables
            
            
            63,977
            
            
            38,180Inventories
            
            
            74,703
            
            
            62,208Prepaid
                expenses and other current assets
            
            
            1,068
            
            
            1,390Total
                current assets
            
            
            225,546
            
            
            156,310Notes
                receivable and investments (note 6)
            
            
            59,142
            
            
            7,913Goodwill
            
            
            4,195
            
            
            4,195Other
                assets
            
            
            7,461
            
            
            2,560Property,
                plant and equipment
            
            
            403,933
            
            
            376,316Less
                accumulated depreciation
            
            
            (199,329
            )
            
            (182,726
            )204,604
            
            
            193,590TOTAL
                ASSETS
            
            $
            500,948
            
            $
            364,568




LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                liabilities:Accounts
                payable and accrued expenses
            
            $
            74,488
            
            $
            45,051Dividends
                payable
            
            
            19,059
            
            
            —Current
                maturities of purchase obligation
            
            
            10,758
            
            
            5,435Current
                maturities of long-term debt
            
            
            11,717
            
            
            13,442Deferred
                income taxes
            
            
            11,745
            
            
            11,830Total
                current liabilities
            
            
            127,767
            
            
            75,758Long-term
                debt, less current maturities
            
            
            90,220
            
            
            99,410Non-controlling
                interests in consolidated entities
            
            
            1,707
            
            
            1,894Purchase
                obligation, less current maturities
            
            
            9,600
            
            
            9,867Other
                non-current liabilities
            
            
            2,240
            
            
            2,150Deferred
                income taxes
            
            
            19,855
            
            
            19,750Total
                liabilities
            
            
            251,389
            
            
            208,829Stockholders’
                equity:Common
                stock $0.01 par value per share:Authorized
                shares - 60,000Issued
                35,130 shares and 21,312 shares outstanding atMarch
                1, 2008 and 21,193 shares outstanding at June 2, 2007
            
            
            351
            
            
            351Class
                A common stock $0.01 par value per share, authorized, issued
                andoutstanding
                2,400 shares at March 1, 2008 and June 2, 2007
            
            
            24
            
            
            24Paid-in
                capital
            
            
            29,639
            
            
            29,043Retained
                earnings
            
            
            240,708
            
            
            147,667Common
                stock in treasury - 13,818 shares at March 1, 2008and
                13,937 shares at June 2, 2007
            
            
            (21,163
            )
            
            (21,346
            )Total
                stockholders’ equity
            
            
            249,559
            
            
            155,739TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            500,948
            
            $
            364,568





See
      notes
      to condensed consolidated financial statements.




3




**CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**
 **(in
        thousands, except per share amounts)**
 **UNAUDITED**


13
                Weeks Ended
            
            39
                Weeks EndedMarch
                1, 2008
            
            March
                3, 2007
            
            March
                1, 2008
            
            March
                3, 2007Net
                sales
            
            $
            278,017
            
            $
            175,211
            
            $
            680,311
            
            $
            428,256Cost
                of sales
            
            
            173,115
            
            
            131,029
            
            
            453,797
            
            
            350,712Gross
                profit
            
            
            104,902
            
            
            44,182
            
            
            226,514
            
            
            77,544Selling,
                general andadministrative
            
            
            19,244
            
            
            16,902
            
            
            54,921
            
            
            45,830Operating
                income
            
            
            85,658
            
            
            27,280
            
            
            171,593
            
            
            31,714Other
                income (expense):Interest
                expense, net
            
            
            (676
            )
            
            (1,639
            )
            
            (3,700
            )
            
            (5,198
            )Other
            
            
            2,905
            
            
            1,956
            
            
            8,587
            
            
            2,6372,229
            
            
            317
            
            
            4,887
            
            
            (2,561
            )Income
                before incometaxes
            
            
            87,887
            
            
            27,597
            
            
            176,480
            
            
            29,153Income
                tax expense
            
            
            30,704
            
            
            10,194
            
            
            61,177
            
            
            10,780Net
                income
            
            $
            57,183
            
            $
            17,403
            
            $
            115,303
            
            $
            18,373Net
                income per common share:Basic
            
            $
            2.41
            
            $
            0.74
            
            $
            4.87
            
            $
            0.78Diluted
            
            $
            2.41
            
            $
            0.74
            
            $
            4.86
            
            $
            0.78Dividends
                declared per common share
            
            $
            0.8038
            
            $
            0.0125
            
            $
            0.8288
            
            $
            0.0375Weighted
                average sharesoutstanding:Basic
            
            
            23,712
            
            
            23,519
            
            
            23,664
            
            
            23,508Diluted
            
            
            23,744
            
            
            23,578
            
            
            23,727
            
            
            23,583





See
      notes
      to condensed consolidated financial statements.




4




**CAL-MAINE
      FOODS, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(in
      thousands)**


**UNAUDITED**




39
                Weeks EndedMar.
                1, 2008
            
            Mar.
                3, 2007Cash
                flows from operating activitiesNet
                income
            
            $
            115,303
            
            $
            18,373Depreciation
                and amortization
            
            
            19,079
            
            
            16,172Other
                adjustments, net
            
            
            (14,613
            )
            
            2,414Net
                cash provided by operations
            
            
            119,769
            
            
            36,959Cash
                flows from investing activitiesPurchases
                of investments
            
            
            (122,825
            )
            
            (20,100
            )Sales
                of investments
            
            
            115,175
            
            
            16,500Acquisition
                of businesses, net of cash acquired
            
            
            —
            
            
            (1,152
            )Purchases
                of property, plant and equipment
            
            
            (23,581
            )
            
            (17,071
            )Payments
                received on notes receivable and from affiliates
            
            
            885
            
            
            846Increase
                in notes receivable and equity investments
            
            
            (744
            )
            
            (1,180
            )Net
                proceeds from disposal of property, plant and equipment
            
            
            2,280
            
            
            402Net
                cash used in investing activities
            
            
            (28,810
            )
            
            (21,755
            )Cash
                flows from financing activitiesProceeds
                from issuance of common stock from treasury
            
            
            617
            
            
            177Payment
                of purchase obligation
            
            
            (6,769
            )
            
            (6,102
            )Proceeds
                from issuance of long-term debt
            
            
            —
            
            
            3,000Principal
                payments of long-term debt
            
            
            (10,916
            )
            
            (9,563
            )Capital
                distributions
            
            
            (2,537
            )
            
            —Payment
                of dividends
            
            
            (588
            )
            
            (877
            )Net
                cash used in financing activities
            
            
            (20,193
            )
            
            (13,365
            )Net
                change in cash and cash equivalents
            
            
            70,766
            
            
            1,839Cash
                and cash equivalents at beginning of period
            
            
            15,032
            
            
            13,295Cash
                and cash equivalents at end of period
            
            $
            85,798
            
            $
            15,134





See
      notes
      to condensed consolidated financial statements.




5




**CAL-MAINE
      FOODS, INC. AND SUBSIDIARIES**


Notes
      to
      Condensed Consolidated Financial Statements


(in
      thousands, except share amounts)


March
      1,
      2008




1.  Presentation
      of Interim Information





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-Q and Article 10
      of
      Regulation S-X. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, all adjustments, consisting
      of normal recurring adjustments, considered necessary for a fair presentation
      have been included. Operating results for the thirteen-week and thirty-nine
      week
      periods ended March 1, 2008 are not necessarily indicative of the results that
      may be expected for the year ending May 31, 2008.





The
      balance sheet at June 2, 2007 has been derived from the audited financial
      statements at that date, but does not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements.




For
      further information, refer to the consolidated financial statements and
      footnotes thereto included in Cal-Maine Foods, Inc.'s annual report on Form
      10-K
      for the fiscal year ended June 2, 2007.





**Hillandale
      Acquisition**





On
      July
      28, 2005, we entered into an Agreement to Form a Limited Liability Company
      with
      Hillandale Farms, Inc. and Hillandale Farms of Florida, Inc. (together,
“Hillandale”), and the Hillandale shareholders (the “Agreement”). Under the
      terms of the Agreement, we acquired 51% of the Units of Membership in
      Hillandale, LLC for cash of approximately $27,006 on October 12, 2005, with
      the
      remaining 49% of the Units of Membership to be acquired in essentially equal
      annual installments over a four-year period. The purchase price of the Units
      equals their book value at the time of purchase as calculated under the terms
      of
      the Agreement.





In
      August
      2006, in
      accordance with the Agreement, we
      purchased, for $6,102, an additional 13% of the Units of Hillandale, LLC based
      on their book value as of July 29, 2006. In August 2007, we purchased, for
      $6,769, an additional 12% of the Units of Hillandale, LLC based on their book
      value as of July 28, 2007. Our ownership of Hillandale, LLC currently is 76%.
      Our obligation to acquire the remaining 24% of Hillandale, LLC is recorded
      at
      its present value of $20,358 as of March 1, 2008, of which $10,758 is included
      in current liabilities and $9,600 is included in other non-current liabilities
      in the accompanying condensed consolidated balance sheet. We will purchase
      an
      additional 12% of Hillandale LLC based on the book value of the Membership
      Units
      as of July 26, 2008. This estimated obligation was adjusted as of December
      1,
      2007 due to the effect of the expected earnings increase on the book value
      of
      the membership units. The
      Company will adjust the original Hillandale purchase price allocation based
      on
      the ultimate amount paid for the acquisition in accordance with SFAS
      141.





**Stock
      Based Compensation**




Refer
      to
      Note 9 of our June 2, 2007 audited financial statements for further information
      on our stock compensation plans. Total stock based compensation expense for
      the
      thirty-nine weeks ended March 1, 2008 and March 3, 2007 was $7,356 and $1,769,
      respectively. Our liabilities associated with Stock Appreciation Rights as
      of
      March 1, 2008 and March 3, 2007 was $7,758 and $2,394,
      respectively.




During
      the thirty-nine weeks ended March 1, 2008, options were exercised for 119,600
      shares of common stock. Proceeds from the exercise of these options amounted
      to
      $617. The Company made no stock-based grants during the thirty-nine weeks ended
      March 1, 2008.




6




2.
      Inventories




Inventories
      consisted of the following:





March
                1, 2008
            
            June
                2, 2007Flocks
            
            $
            43,245
            
            $
            40,773Eggs
            
            
            6,701
            
            
            4,704Feed
                and supplies
            
            
            24,757
            
            
            16,731$
            74,703
            
            $
            62,208





3.
      Legal
      Proceedings




We
      are
      defendants in certain legal actions. It is our opinion, based on advice of
      legal
      counsel, that the outcome of these actions will not have a material adverse
      effect on our consolidated financial position or operations. Please refer to
      Part II, Item 1, of this report for a description of certain pending legal
      proceedings.





4.
      Net
      Income per Common Share





Basic
      net
      income per share was calculated by dividing net income by the weighted-average
      number of common shares outstanding during the period. Diluted net income per
      share was calculated by dividing net income by the weighted-average number
      of
      common shares outstanding during the period plus the dilutive effects of options
      and warrants.





5. Income
          Taxes





We
      adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48
“Accounting for Uncertainty in Income Taxes” (“FIN 48”), effective June 3, 2007.
      FIN 48 clarifies the accounting for income taxes by prescribing the minimum
      recognition threshold a tax position is required to meet before being recognized
      in the financial statements. FIN 48 also provides guidance on derecognition,
      measurement, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. We had no significant unrecognized tax
      benefits at the date of adoption or at March 1, 2008. Accordingly, we do not
      have any interest or penalties related to uncertain tax positions. However,
      if
      interest or penalties were to be incurred related to uncertain tax positions,
      such amounts would be recognized in income tax expense. Tax periods for all
      years after 2003 remain open to examination by the federal and state taxing
      jurisdictions to which we are subject.





6. Notes
          Receivable and Investments





Investments
      consist of auction rate securities. We have designated these investments as
      available-for-sale securities and have accounted for them in accordance with
      the
      standards of Statement of Financial Accounting Standards (“FAS”) No. 115,
“Accounting for Certain Investments in Debt and Equity Securities.”
Available-for-sale securities are reported at fair value with unrealized gains
      and losses excluded from earnings and reported in shareholders’ equity. The fair
      value of the available-for-sale securities equaled their acquisition cost.
      No
      unrealized gains or losses were recognized on these investments during either
      of
      the quarters ended March 1, 2008 or March 3, 2007.





Our
      auction rate securities are long-term debt obligations rated AAA at the date
      of
      purchase. The ratings on the auction rate securities take into account credit
      support through insurance policies guaranteeing each of the bonds’ payment of
      principal and accrued interest. We have determined that these assets should
      be
      reclassified as noncurrent available-for-sale securities. In the past, the
      auction process has allowed investors to obtain immediate liquidity if so
      desired by selling the securities at their face amounts. Liquidity for these
      securities has historically been provided by an auction process that resets
      interest rates on these investments on average every 7-35 days. However, as
      has
      been recently reported in the financial press, the current disruptions in the
      credit markets have adversely affected the auction market for these types of
      securities. Because auction sell orders have failed during the quarter as a
      result of recent liquidity disruptions, the Company believes that presentation
      of these securities as long-term investments is more accurate than presentation
      of these securities as short- term investments. As of March 1, 2008 the auction
      rate securities classified as noncurrent available-for-sale securities is
      $47,150. The remainder of the $11,992 balance in investments is made up of
      $11,987 of investments in unconsolidated affiliates and $5 represents the
      long-term portion of notes receivable.




7




7. Dividends
          declared per common share





Dividends
      declared per Common Share is the average dividend declared on all classes of
      common stock, calculated by dividing the dividends declared for the period
      by
      the average number of common stock outstanding for the period. Our Class A
      Common Stock is paid at a rate equal to 95% of the rate on our Common Stock.





Effective
      November 30, 2007, the Company’s Board of Directors approved the adoption of a
      variable dividend policy to replace the Company’s fixed dividend policy.
      Commencing with the third quarter of fiscal 2008, which ended on March 1, 2008,
      Cal-Maine will pay 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 computed in accordance with generally accepted accounting principles
      in an amount equal to one-third (1/3) of such quarterly income. The amount
      of
      the dividend payable on each share of Class A Common Stock is in an amount
      equal
      to 95% of the amount paid on each share of Common Stock. Dividends shall be
      paid
      to shareholders of record as of the sixtieth day following the last day of
      such
      quarter and payable on the fifteenth day following the record date. Following
      a
      quarter for which the Company does not report net income, the Company shall
      not
      pay a dividend for a subsequent profitable quarter until the Company is
      profitable on a cumulative basis computed from the date of the last quarter
      for
      which a dividend was paid.





**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL** **CONDITION
      AND RESULTS OF OPERATIONS**





This
      report contains numerous forward-looking statements relating to our shell egg
      business, including estimated production data, expected operating schedules,
      expected capital costs and other operating data. Such forward-looking statements
      are identified by the use of words such as "believes," "intends," "expects,"
      "hopes," "may," "should," "plan," "projected," "contemplates," "anticipates"
      or
      similar words. Actual production, operating schedules, results of operations
      and
      other projections and estimates could differ materially from those projected
      in
      the forward-looking statements. The factors that could cause actual results
      to
      differ materially from those projected in the forward-looking statements include
      (i) the risk factors set forth under Item 1A of our Annual Report on Form 10-K
      for the fiscal year ended June 2, 2007, (ii) the risks and hazards inherent
      in
      the shell egg business (including disease, pests, and weather conditions),
      (iii)
      changes in the market prices of shell eggs, and (iv) changes or obligations
      that
      could result from our future acquisition of new flocks or businesses. Readers
      are cautioned not to put undue reliance on forward-looking statements. We
      disclaim any intent or obligation to update publicly these forward-looking
      statements, whether as a result of new information, future events or otherwise.





OVERVIEW





Cal-Maine
      Foods, Inc. (“we”, “us”, “our”, or the “Company”) is primarily engaged in the
      production, grading, packaging, marketing and distribution of fresh shell eggs.
      Our fiscal year end is the Saturday closest to May 31.





Our
      operations are fully integrated. At our facilities we hatch chicks, grow and
      maintain flocks of pullets (young female chickens, usually under 20 weeks of
      age), layers (mature female chickens) and breeders (male or female birds used
      to
      produce fertile eggs to be hatched for egg production flocks), manufacture
      feed,
      and produce, process and distribute shell eggs. We are the largest producer
      and
      marketer of shell eggs in the United States. We market the majority of our
      shell
      eggs in 29 states, primarily in the southwestern, southeastern, mid-western
      and
      mid-Atlantic regions of the United States. We market our shell eggs through
      our
      extensive distribution network to a diverse group of customers, including
      national and regional grocery store chains, club stores, foodservice
      distributors and egg product manufacturers.




8





We
      currently produce approximately 80% of the total number of shell eggs sold
      by
      us, with approximately 5% of such total shell egg production being through
      the
      use of contract producers. Contract producers operate under agreements with
      us
      for the use of their facilities in the production of shell eggs by layers owned
      by us. We own the shell eggs produced under these arrangements. Approximately,
      20% of the total numbers of shell eggs sold by us are purchased from outside
      producers for resale, as needed.




Our
      operating income or loss is significantly affected by wholesale shell egg market
      prices, which can fluctuate widely and are outside of our control. Retail sales
      of shell eggs are generally greatest during the fall and winter months and
      lowest during the summer months. Prices for shell eggs fluctuate in response
      to
      seasonal factors and a natural increase in egg production during the spring
      and
      early summer.





Our
      cost
      of production is materially affected by feed costs, which currently average
      about 62% of our total farm egg production cost. Changes in market prices for
      corn and soybean meal, the primary ingredients of the feed we use, result in
      changes in our cost of goods sold. The cost of feed ingredients is affected
      by a
      number of supply and demand factors such as crop production and weather, and
      other factors, such as the level of grain exports and levels of use for ethanol
      and biofuel, over which we have little or no control. Market prices for corn
      remain higher in part because of increasing demand from ethanol producers.
      Market prices for soybean meal remain higher as a result of competition for
      acres from other grain producers and increasing demands for its use in the
      manufacture of renewable energy.




RESULTS
      OF OPERATIONS





The
      following table sets forth, for the periods indicated selected items from our
      Condensed Consolidated Statements of Operations expressed as a percentage of
      net
      sales.





13
                Weeks Ended
            
            39
                Weeks EndedMarch
                1, 2008
            
            March
                3, 2007
            
            March
                1, 2008
            
            March
                3, 2007Net
                sales
            
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            62.3
            
            
            74.8
            
            
            66.7
            
            
            81.9Gross
                profit
            
            
            37.7
            
            
            25.2
            
            
            33.3
            
            
            18.1Selling,
                general & administrative
            
            
            6.9
            
            
            9.6
            
            
            8.1
            
            
            10.7Operating
                income
            
            
            30.8
            
            
            15.6
            
            
            25.2
            
            
            7.4Other
                income (expense)
            
            
            0.8
            
            
            0.2
            
            
            0.7
            
            
            (0.6
            )Income
                (loss) before taxes
            
            
            31.6
            
            
            15.8
            
            
            25.9
            
            
            6.8Income
                tax expense (benefit)
            
            
            11.0
            
            
            5.8
            
            
            9.0
            
            
            2.5Net
                income (loss)
            
            
            20.6
            %
            
            9.9
            %
            
            16.9
            %
            
            4.3
            %




NET
      SALES





Year-to-date,
      approximately 94% of our net sales consist of shell egg sales, 2% consist of
      incidental feed sales to outside producers, with the balance consisting of
      sales
      of egg products. Net sales for the thirteen-week period ended March 1, 2008
      were
      $278.0 million, an increase of $102.8 million, or 58.7%, as compared to net
      sales of $175.2 million for the thirteen-week period ended March 3, 2007. Total
      dozens of eggs sold decreased and egg selling prices increased for the current
      thirteen-week period as compared with the same period in fiscal 2007. Dozens
      sold for the current thirteen-week period of fiscal 2008 were 174.1 million
      dozen, a decrease of 2.8 million dozen, or 1.6% as compared to the same period
      of fiscal 2007. Egg supply has been better balanced with demand resulting in
      favorable egg market conditions. According to statistics from the United States
      Department of Agriculture (“USDA”) the number of table-egg laying hens is down
      from last year, which will add continued support in balancing supply and demand
      in the shell egg market. This caused higher shell egg selling prices during
      the
      current thirteen-week period. Our net average selling price per dozen of shell
      eggs for the thirteen-week period ended March 1. 2008 was $1.48, compared to
      $0.980 for the thirteen-week period ended March 3, 2007, an increase of 51.0%.
      Our net average selling price is the blended price for all sizes and grades
      of
      shell eggs, including non-graded shell egg sales, breaking stock and
      undergrades.


9





Net
      sales
      for the thirty-nine week period ended March 1, 2008 were $680.3 million, an
      increase of $252.0 million, or 58.9% as compared to net sales of $428.3 million
      for the thirty-nine week period ended March 3, 2007. Dozens sold for the current
      thirty-nine week period were 510.2 million, as compared to 513.3 million for
      the
      same time period in fiscal 2007, a decrease of 3.1 million dozen, or 0.6%.
      For
      the current fiscal 2008 thirty-nine week period, our net average selling price
      per dozen of shell eggs was $1.220, as compared to $.800 per dozen for the
      same
      period in fiscal 2007, an increase of 52.5%.





COST
      OF
      SALES





Cost
      of
      sales consists of costs directly related to production and processing of shell
      eggs, including feed costs, and purchases of shell eggs from outside egg
      producers. Cost of sales for the thirteen-weeks ended March 1, 2008 was $173.1
      million, an increase of $42.1 million, or 32.1%, as compared to cost of sales
      of
      $131.0 million for the thirteen-week period ended March 3, 2007. The increase
      is
      due to higher cost of purchases from outside egg producers and higher cost
      of
      feed ingredients. The increase in the cost of the shell eggs purchased from
      outside producers was due to improved shell egg market conditions and selling
      prices. Feed cost per dozen of shell eggs produced for the thirteen-weeks ended
      March 1, 2008 was $.347 per dozen, as compared to the thirteen-week period
      ended
      March 3, 2007 feed cost per dozen of $.278, an increase of 24.9%; this was
      due
      to higher costs paid for corn and soybean meal our primary feed ingredients.
      Most industry projections indicate that costs for corn and soybean meal will
      continue to be at elevated levels due to demands for usage in ethanol and
      biodiesel production, and continued competition for acreage from other grain
      producers. The higher shell egg selling price was the primary reason for the
      increase in gross profit from 25.2% of net sales for the thirteen-weeks ended
      March 3, 2007 to 37.7% of net sales for the thirteen-weeks ended March 1,
      2008.





Cost
      of
      sales for the thirty-nine week period ended March 1, 2008 was $453.8 million,
      an
      increase of $103.1 million, or 29.4%, as compared to cost of sales of $350.7
      million for the thirty-nine week period ended March 3, 2007. The increase in
      cost of sales is the net result of a higher number of dozens produced at
      Company-owned facilities, higher prices paid for outside shell egg purchases,
      and an increase in the cost of feed ingredients. Feed cost per dozen of shell
      eggs produced for the current thirty-nine week period was $.313 per dozen,
      as
      compared to $.240 per dozen for the same period in the prior fiscal year, an
      increase of 30.4%. The increase in shell egg selling prices more than offset
      the
      increase in the cost of feed ingredients which resulted in an increase in gross
      profit from 18.1% of net sales for last year’s thirty-nine week period to a
      gross profit of 33.3% of net sales for the current thirty-nine week
      period.





SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES





Selling,
      general and administrative expenses include costs of marketing, distribution,
      accounting and corporate overhead. Selling, general and administrative expenses
      for the thirteen-week period ended March 1, 2008 were $19.2 million, an increase
      of $2.3 million or 13.6%, as compared to $16.9 million for the thirteen-week
      period ended March 3, 2007. Stock based compensation plans expense increased
      $1.6 million for the current quarter due primarily to an increase in the closing
      price of the Company’s common stock. The calculation of the stock based
      compensation plans expense is dependent on the closing stock price of the
      Company’s common stock, which increased from $12.75 at March 3, 2007 to $34.50
      at March 1, 2008. Due to increased specialty egg sales, franchise fees for
      specialty eggs increased by $530,000 for the current thirteen-week period.
      Our
      net delivery expenses increased this current thirteen-week period by $140,000
      due to the increased price of fuel for delivery vehicles. As a percent of net
      sales, selling, general and administrative expense decreased from 9.6% for
      the
      thirteen-week period ended March 3, 2007 to 6.9 % for the thirteen-week period
      ended March 1, 2008.





Selling,
      general and administrative expenses for the thirty-nine week period ended March
      1, 2008 was $54.9 million, an increase of $9.1 million or 19.8%, as compared
      to
      $45.8 million for the thirty-nine week period ended March 3, 2007. In the
      thirty-nine week period ended March 1, 2007, stock compensation plans expense
      increased $5.7 million for the reasons indicated above. Franchise fees for
      specialty eggs increased $1.6 million during the current thirty-nine week period
      as compared to the same period in fiscal 2007, due to the fact that specialty
      egg sales increased from 8.5% of dozens sold last year to 11.3% of dozens sold
      for this comparable thirty-nine week period. For the current thirty-nine week
      period our payroll expenses are $1.1 million higher. Net delivery expenses
      for
      the current thirty-nine week period increased by $230,000. As a percent of
      net
      sales, selling, general and administrative expense decreased from 10.7% for
      the
      thirty-nine week period of fiscal 2007 to 8.1% for the thirty-nine week period
      of fiscal 2008.




10




OPERATING
      INCOME





As
      a
      result of the above, operating income was $85.7 million for the thirteen-week
      period ended March 1, 2008, as compared to operating income of $27.3 million
      for
      the thirteen-week period March 3, 2007. Operating income was 30.8% of net sales
      for the current thirteen-week period, as compared to operating income of 15.6%
      of net sales for the thirteen-week period ended March 3, 2007.





For
      the
      thirty-nine week period ended March 1, 2008, operating income was $171.6
      million, as compared to operating income of $31.7 million for the thirty-nine
      week period ended March 3, 2007. Operating income was 25.2% of net sales for
      the
      current thirty-nine week period as compared to operating income of 7.4% of
      net
      sales in the same thirty-nine week period in fiscal 2007.





OTHER
      INCOME / EXPENSE





Other
      income or expense consists of costs or income not directly charged to, or
      related to, operations such as interest expense and equity from
      affiliates.





Other
      income for the thirteen-week period ended March 1, 2008 was $2.2 million, an
      increase of $1.9 million, as compared to other income of $317,000 for the
      thirteen-week period ended March 3, 2007. This net increase for the current
      thirteen-week period was primarily the result of a $963,000 decrease in net
      interest expense and a $949,000 increase in other income. We had lower average
      long-term borrowing balances and higher invested cash balances, which decreased
      net interest expense. Other income increased due to increased equity in income
      of affiliates, which are also in the shell egg business. As a percent of net
      sales, other income was 0.2% for the third quarter of fiscal 2007 and other
      income was 0.8% of net sales for the third quarter of fiscal 2008.





For
      the
      thirty-nine week period ended March 1, 2008 other income was $4.9 million,
      an
      increase of $7.5 million as compared to other expense of $2.6 million for the
      same thirty-nine week period in fiscal 2007. For the current thirty-nine weeks,
      net interest expense decreased $1.5 million. As in the current quarter, we
      had
      lower long-term borrowing balances and higher invested cash balances, which
      decreased net interest expense. Other income increased $6.0 million from
      increases in the equity in income of affiliates and gains recorded on the sale
      of fixed assets. As a percent of net sales, other income was 0.7% for the
      current thirty-nine week period, as compared to other expense of 0.6% for the
      same thirty-nine week period in fiscal 2007.





INCOME
      TAXES





As
      a
      result of the above, our pre-tax income was $87.9 million for the third quarter
      ended March 1, 2008, as compared to pre-tax income of $27.6 million for the
      thirteen-week period ended March 3, 2007. For the current thirteen-week period,
      income tax expense of $30.7 million was recorded with an effective tax rate
      of
      34.9%, as compared to income tax expense of $10.2 million with an effective
      tax
      rate of 36.9% for the same thirteen-week period in fiscal 2007.





For
      the
      thirty-nine week period ended March 1, 2008, our pre-tax income was $176.5
      million, as compared to $29.2 million for the thirty-nine week period ended
      March 3, 2007. For the current thirty-nine week period, an income tax expense
      of
      $61.2 million was recorded with an effective tax rate of 34.7%, as compared
      to
      an income tax expense of $10.8 million with an effective tax rate of 37.0%
      for
      the same thirty-nine week period in fiscal 2007. The effective tax rate differs
      from the federal statutory income tax rate of 35% due to state income taxes,
      federal work opportunity tax credits and certain items included in income for
      financial reporting purposes that are not included in taxable income or loss
      for
      income tax purposes, including tax exempt interest income, certain employee
      stock option expense and the minority ownership interest in the profits and
      losses of Hillandale, LLC for income tax purposes.




11




NET
      INCOME





Net
      income for the thirteen-week period ended March 1, 2008 was $57.2 million,
      or
      $2.41 per basic and diluted share, as compared to net income of $17.4 million,
      or $0.74 per basic and diluted share, for the thirteen-week period ended March
      3, 2007.





For
      the
      thirty-nine week period ended March 1, 2008, net income was $115.3 million,
      or
      $4.87 per basic and $4.86 per diluted share, as compared to $18.4 million,
      or
      $0.78 per basic and diluted share, for the thirty-nine week period ended March
      3, 2007.





CAPITAL
      RESOURCES AND LIQUIDITY





Our
      working capital at March 1, 2008 was $97.8 million as compared to $80.6 million
      at June 2, 2007. Our current ratio was 1.77 at March 1, 2008, and 2.06 at June
      2, 2007. Our need for working capital generally is highest in the last and
      first
      fiscal quarters ending in May and August, respectively, when egg prices are
      normally at seasonal lows. Seasonal borrowing needs frequently are higher during
      these quarters than during other fiscal quarters. We have a $40 million line
      of
      credit with a termination date of December 31, 2009 with three banks, $2.7
      million of which was utilized as a standby letter of credit at March 1, 2008.
      Our long-term debt at March 1, 2008, including current maturities, amounted
      to
      $101.9 million, as compared to $112.9 million at June 2, 2007.




In the
      thirty-nine week period ended March 1, 2008, $119.8 million in net cash was
      provided by operating activities.  This
      compares to $37.0 million of net cash from operating activities for the
      thirty-nine week period ended March 3, 2007 . In
      the
      thirty-nine weeks ended March 1, 2008, the Company used $7.7 million for the
      purchase of investments, $141,000 was received on notes receivable and
      investments in unconsolidated affiliates, and $2.3 million was provided from
      disposal of property, plant and equipment. The Company used $23.6 million for
      purchases of property, plant and equipment, and
      $6.8
      million for payment on the purchase obligation for Hillandale, LLC. In
      addition, $617,000 was provided from the issuance of common stock from the
      treasury upon the exercise of stock options, and  $588,000
      was used for payments of dividends. Principal
      payments on long term debt were $10.9
      million, and $2.5 million was distributed to partners in our consolidated
      affiliates. The net result of these activities was an increase in cash of $70.8
      million since June 2, 2007.




In
      the
      thirty-nine weeks ended March 3, 2007, the Company used $3.6 million for the
      purchase of short-term investments, $334,000 for the issuance of notes
      receivable and purchase of investments in unconsolidated affiliates, and
      $402,000 was provided from disposal of property, plant and equipment. The
      Company used $17.1 million for purchases of property, plant and equipment, and
      $6.1
      million for payment on the purchase obligation for Hillandale, LLC. The Company
      used $1.2
      million for the purchase of Green Forest Foods, LLC, net of cash
      acquired .
      In
      addition, $177,000 was provided from the issuance of common stock from the
      treasury upon the exercise of stock options, and  $877,000
      was used for payments of dividends on the common stock. Borrowings of $3 million were received in additional long-term debt and $9.6
      million was used for principal payments on long-term debt. The net result of
      these activities was an increase in cash of $1.8 million from June 3,
      2006 .




Substantially
      all trade receivables and inventories collateralize our revolving line of credit
      and property, plant and equipment collateralize our long-term debt under our
      loan agreements with our lenders. Unless otherwise approved by our lenders,
      we
      are required by provisions of these loan agreements to (1) maintain minimum
      levels of working capital (ratio of not less than 1.25 to 1) and net worth
      (minimum of $90.0 million tangible net worth adjusted for earnings); (2) limit
      capital expenditures less exclusions (not to exceed $60.0 million for any period
      of four consecutive fiscal quarters), lease obligations and additional long-term
      borrowings (total funded debt to total capitalization not to exceed 55%); and
      (3) maintain various cash-flow coverage ratios (1.25 to 1), among other
      restrictions. At March 1, 2008, we were in compliance with the provisions of
      all
      loan agreements. Under certain of the loan agreements, the lenders have the
      option to require the prepayment of any outstanding borrowings in the event
      we
      undergo a change in control.





Under
      the
      terms of our Agreement with Hillandale and the Hillandale shareholders, a new
      Florida limited liability company named Hillandale, LLC was formed. In fiscal
      2006, we purchased 51% of the Units of Membership in Hillandale, LLC, with
      the
      remaining Units to be acquired in essentially equal annual installments over
      a
      four-year period. The purchase price of the Units is equal to their book value
      as calculated in accordance with the terms of the Agreement. In fiscal 2007,
      we
      purchased, pursuant to the Agreement, an additional 13% of the Units of
      Membership for $6.1 million from our cash balances. In fiscal 2008, we purchased
      an additional 12% of the Units of Membership for $6.8 from our cash balances.
      We
      have recorded the obligation to acquire the remaining 24% at its estimated
      present value of $20.4 million at March 1, 2008. The actual remaining purchase
      price may be higher or lower when the acquisitions are completed. Future funding
      is expected to be provided by our cash balances and borrowings. As
      of
      December 1, 2007, management increased its estimate of the purchase price of
      the
      remaining 24% due to the increased profitability of Hillandale from its previous
      estimates. Any such increases or decreases in the purchase obligation are
      allocated to the net assets acquired based upon their fair values.




12





Capital
      expenditure requirements are expected to be for the normal repair and
      replacement of our facilities. In addition, we are constructing a new integrated
      layer production complex in West Texas to replace our Albuquerque, New Mexico
      complex, which has ceased egg production. The expected cost is approximately
      $30.0 million. Completion of this facility is estimated to be in January 2010.
      Capital expenditures related to construction of this complex will be funded
      by
      cash flows from operations, existing lines of credit and additional long-term
      borrowings.





We
      are
      currently a guarantor of approximately $4.0 million of long-term debt of Delta
      Egg Farm, LLC, an unconsolidated affiliate located in Delta, Utah. Delta Egg
      Farm, LLC has plans to construct an organic egg production and distribution
      facility near Chase, Kansas. The cost of construction is estimated to be
      approximately $13.0 million. We anticipate that we may be a pro rata guarantor
      of debt with the other Delta Egg Farm, LLC owners in connection with the
      project.





We
      currently have a $1.8 million deferred tax liability due to a subsidiary's
      change from a cash basis to an accrual basis taxpayer on May 29, 1988. The
      Taxpayer Relief Act of 1997 provides that this liability is payable ratably
      over
      the 20 years beginning in fiscal 1999. However, such taxes will be due in their
      entirety in the first fiscal year in which there is a change in ownership
      control so that we no longer qualify as a "family farming corporation." We
      are
      currently making annual payments of approximately $150,000 related to this
      liability. However, while these current payments reduce cash balances, payment
      of the $1.8 million deferred tax liability would not impact our consolidated
      statement of income or stockholders' equity, as these taxes have been accrued
      and are reflected on our consolidated balance sheet.





At
      March
      1, 2008, the Company held $47.2 million of auction rate securities. These
      securities may be purchased or sold through an auction process in short term
      intervals, which on average range from 7-35 days, whereby the interest rate
      on
      the security is reset. As of March 31, 2008 **,** the
      auction rate securities held the highest rating from Moody’s and S&P (AAA).
      This rating is achieved through insurance policies guaranteeing each of the
      bonds payment of principal and accrued interest, if it becomes necessary.





Recently,
      a variety of financial market related credit issues have challenged the
      liquidity within this investment arena, and resulted in a number of failed
      auction sell orders. We continue to hold the securities, at par value, and
      accrue interest at a designated rate.





We
      are
      not certain how long we may be required to hold each security. However, given
      our current cash position, liquid cash equivalents, cash flow from operations
      and our borrowing capacity under our line of credit, we believe the current
      and
      near term illiquidity of the auction rate securities will not adversely affect
      management’s ability to achieve its operating goals.





Looking
      forward, we believe that our current cash balances, borrowing capacity,
      utilization of our revolving line of credit, and cash flows from operations
      are
      sufficient to fund our current and projected capital needs.




***Impact
      of Recently Issued Accounting Standards.*** Please
      refer to Item 7, “Management’s Discussion and Analysis of Financial Condition
      and Results of Operations” in our Annual Report Form 10-K for the year ended
      June 2, 2007 for a discussion of the impact of recently issued accounting
      standards. There were no accounting standards issued **** during
      the quarter ended March 1, 2008 that we expect will have a material impact
      on
      our consolidated financial statements.




13





We
      adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48
“Accounting for Uncertainty in Income Taxes” (“FIN 48”), effective June 3, 2007.
      FIN 48 clarifies the accounting for income taxes by prescribing the minimum
      recognition threshold a tax position is required to meet before being recognized
      in the financial statements. FIN 48 also provides guidance on derecognition,
      measurement, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. We had no significant unrecognized tax
      benefits at the date of adoption or at December 1, 2007. Accordingly, we do
      not
      have any interest or penalties related to uncertain tax positions. However,
      if
      interest or penalties were to be incurred related to uncertain tax positions,
      such amounts would be recognized in income tax expense. Tax periods for all
      years after 2003 remain open to examination by the federal and state taxing
      jurisdictions to which we are subject.





In
      September 2006, the FASB issued FASB Statement No.157, "Fair Value Measurements"
      (“FAS 157”). FAS 157 establishes a single authoritative definition of fair
      value, sets out a framework for measuring fair value, and expands on required
      disclosures about fair value measurement. FAS 157 is effective for us on June
      1,
      2008 and will be applied prospectively. Management is currently evaluating
      the
      impact of FAS 157 on its consolidated financial statements.





In
      February 2007, the FASB issued FASB Statement No. 159, "Establishing the Fair
      Value Option for Financial Assets and Liabilities" (“FAS 159”), to permit all
      entities to choose to elect to measure eligible financial instruments at fair
      value. FAS 159 applies to fiscal years beginning after November 15, 2007, with
      early adoption permitted for an entity that has also elected to apply the
      provisions of FAS 157. An entity is prohibited from retrospectively applying
      FAS
      159, unless it chooses early adoption. Management is currently evaluating the
      impact of FAS 159 on its consolidated financial statements. ****




In
      December 2007, the FASB issued FASB
      Statement No .
      141
      (Revised 2007), or (R), *Business
      Combinations* (“FAS
      141(R)”). This Statement retained the fundamental requirements in Statement 141
      that the acquisition method of accounting (which Statement 141 called the
      purchase method) be used for all business combinations and for an acquirer
      to be
      identified or each business combination. This Statement, which is broader in
      scope than that of Statement 141, which applied only to business combinations
      in
      which control was obtained by transferring consideration, applies the same
      method of accounting (the acquisition method) to all transactions and other
      events in which one entity obtains control over one or more other businesses.
      This Statement also makes certain other modifications to Statement 141. This
      statement applies prospectively to business combinations for which the
      acquisition date is on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008. An entity may not apply it
      before that date. The Company is currently assessing the effect FAS 141(R)
      may
      have on its consolidated results of operations and financial position.




In
      December 2007, the FASB issued FASB Statement No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements- An amendment of ARB No.
      51* (“FAS
      160”). This Statement amends ARB No. 51 to establish accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. It clarifies that a noncontrolling interest
      in
      a subsidiary, which is sometimes referred to as minority interest, is an
      ownership interest in the consolidated entity that should be reported as equity
      in the consolidated financial statements. Among other requirements, this
      statement requires consolidated net income to be reported at amounts that
      include the amounts attributable to both the parent and the noncontrolling
      interest. It also requires disclosure, on the face of the consolidated income
      statement, of the amounts of consolidated net income attributable to the parent
      and to the noncontrolling interest. This Statement is effective for fiscal
      years, and interim periods within those fiscal years, beginning on or after
      December 15, 2008. Earlier adoption is prohibited. The Company is currently
      assessing the effect FAS 160 may have on its consolidated results of operations
      and financial position.


**


***Critical
      Accounting Policies*** *.* ****** We
      suggest that our Summary of Significant Accounting Policies, as described in
      Note 1 of the Notes to Consolidated Financial Statements included in Cal-Maine
      Foods, Inc. and Subsidiaries annual report on Form10-K for the fiscal year
      ended
      June 2, 2007, be read in conjunction with this Management’s Discussion and
      Analysis of Financial Condition and Results of Operations. There have been
      no
      changes to critical accounting policies identified in our Annual Report on
      Form
      10-K for the year ended June 2, 2007.





**ITEM
      3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





We
      are
      exposed to risk related to our investments in auction rate securities. Liquidity
      for these securities is typically provided by an auction process that resets
      the
      applicable interest rate at pre-determined intervals, usually on average every
      7-35 days. Because of the short interest rate reset period, we have historically
      recorded them as current available-for-sale securities. The liquidity of these
      securities has been negatively impacted by the uncertainty in the credit markets
      and the exposure of these securities to the financial condition of bond
      insurance companies. As of March 1, 2008, we held auction rate securities with
      a
      par value of $47.2 million. These securities had been subject to auction
      processes for which there had been insufficient bidders on the scheduled
      rollover dates. We will not be able to liquidate any of our auction rate
      securities until a future auction is successful, a buyer is found outside of
      the
      auction process or the notes are redeemed. We have re-classified these auction
      rate securities as noncurrent available-for-sale securities as of March 1,
      2008.




14





Other
      than the risk indicated above there have been no other material changes in
      the
      market risk reported in the Company's Annual Report on Form 10-K for the fiscal
      year ended June 2, 2007.





**ITEM
      4. CONTROLS AND PROCEDURES**




Our
      disclosure controls and procedures are designed to provide reasonable assurance
      that information we are required to disclose in our periodic reports filed
      with
      the Securities and Exchange Commission is recorded, processed, summarized and
      reported within the time periods specified in the Commission’s rules and forms.
      Based on an evaluation of our disclosure controls and procedures conducted
      by
      our Chief Executive Officer and Chief Financial Officer, together with other
      financial officers, such officers concluded that our disclosure controls and
      procedures are effective as of the end of the period covered by this
      report. **** There
      were no changes in our internal control over financial reporting identified
      in
      connection with the evaluation that occurred during our last fiscal quarter
      that
      has significantly affected or is reasonably likely to materially affect our
      internal controls over financial reporting.





**PART
      II.**  **OTHER
      INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**




Except
      as
      noted below, there have been no new matters or changes to matters identified
      in
      our Annual Report on Form 10-K for the year ended June 2, 2007.




**Chicken
      Litter Litigation**





Cal-Maine
      Farms, Inc., a subsidiary of ours, is presently a defendant in two personal
      injury cases in the Circuit Court of Washington County, Arkansas. Those cases
      are styled, McWhorter vs. Alpharma, Inc., *et
      al* .,
      and
      Carroll, *et
      al* .
      vs.
      Alpharma, Inc., *et
      al.* Cal-Maine Farms, Inc. was named as a defendant in the McWhorter case on February
      3, 2004. It was named as a defendant in the Carroll case on May 2, 2005.
      Co-defendants in both cases include other integrated poultry companies such
      as
      Tyson Foods, Inc., Cargill, Incorporated, George’s Farms, Inc., Peterson Farms,
      Inc., Simmons Foods, Inc., and Simmons Poultry Farms, Inc. The manufacturers
      of
      an additive for broiler feed are also included as defendants. Those defendants
      are Alpharma, Inc. and Alpharma Animal Health, Co.





Both
      cases allege that the plaintiffs have suffered medical problems resulting from
      living near land upon which “litter” from the defendants’ flocks was spread as
      fertilizer. The McWhorter case focuses on mold and fungi allegedly created
      by
      the application of litter. The Carroll case also alleges injury from mold and
      fungi, but focuses primarily on the broiler feed ingredient as the cause of
      the
      alleged medical injuries.





Several
      other separate, but related, cases were prosecuted in the same venue by the
      same
      attorneys. The same theories of liability were prosecuted in all of the cases.
      No Cal-Maine company was named as a defendant in any of those other cases.
      The
      plaintiffs selected one of those cases, Green, *et
      al* .
      vs.
      Alpharma, Inc., *et
      al* .,
      as a
      bellwether case to go to trial first. All of the poultry defendants were granted
      summary judgment in the Green case on August 2, 2006. The case against the
      Alpharma defendants resulted in a defendants’ verdict on September 25, 2006. The
      result in the Green case is not dispositive of the issues raised in McWhorter
      and Carroll.





The
      plaintiffs’ attorneys have not yet indicated their intentions regarding the
      remaining cases. It is possible that the McWhorter and Carroll plaintiffs can
      present fundamentally different proof than was presented in the Green case,
      but
      that does not appear likely at present. The potential exposure, if any, in
      the
      McWhorter and Carroll cases appears to be diminished as a result of the outcome
      in the Green case, but at this point it is still not possible to evaluate any
      potential exposure with certainty.




15





**State
      of Oklahoma Watershed Pollution Litigation**





On
      June
      18, 2005, the State of Oklahoma filed suit in the U.S. District Court for the
      Northern District of Oklahoma against a number of companies including Cal-Maine
      Foods, Inc. and Cal-Maine Farms, Inc. An Answer on behalf of both companies
      was
      filed on October 3, 2005. The State of Oklahoma claims that through the disposal
      of chicken litter the defendants have polluted the Illinois River Watershed.
      This watershed provides water to eastern Oklahoma. The Complaint seeks
      injunctive relief and monetary damages.





Neither
      Cal-Maine Foods, Inc. nor Cal-Maine Farms, Inc. has any production in the
      watershed at this time. Cal-Maine Foods, Inc. has acquired a 90% ownership
      interest in Benton County Foods, LLC. This LLC has production in the Arkansas
      portion of the watershed, but none of the manure from this facility is spread
      in
      Oklahoma. Benton County Foods, LLC has not been made a defendant in the
      proceeding.





Oklahoma
      has filed a motion for preliminary injunction seeking a moratorium on litter
      spreading within the watershed. The motion was heard beginning February 19,
      2008. As yet the court has not ruled on the Oklahoma Motion. No other relief
      is
      sought by the motion. The trial on the merits is presently scheduled for
      September, 2009.





Merit
      discovery is ongoing. The Company and the other defendants filed a number of
      dispositive motions, but the motions were either denied or carried with the
      case
      pending further discovery. Those dispositive motions which were determined
      by
      the Court to be premature will be renewed at the conclusion of discovery. At
      this point it is not possible to evaluate any potential exposure with
      certainty.





**ITEM
      1A.**  **RISK
      FACTORS**




There
      have been no material changes in the risk factors previously disclosed in the
      Company's Annual Report on Form 10-K for the fiscal year ended June 2,
      2007.




16




**ITEM
      5. OTHER INFORMATION** ****





On
      January 30, 2008, the Company (“Borrowers”) and John Hancock Life Insurance
      Company and John Hancock Variable Life Insurance Company (the “Purchasers”)
      entered into a Sixth Amendment Agreement (the “Amendment”), dated as of January
      30, 2008, among the Borrowers and Purchasers, with respect to an Amended and
      Restated Secured Note Purchase Agreement, dated as of September 30, 2003, among
      the Borrowers and Purchasers, (the “Note Agreement”) pursuant to which the
      Borrowers have issued secured notes outstanding (the “Notes”). The Purchasers
      hold 100% of the outstanding principal amount of the Notes.





Pursuant
      to the terms of the Amendment, the Purchasers have agreed to certain amendments
      to the Note Agreement, as set forth in a copy of the Amendment filed as Exhibit
      10.11(c) to this Form 10-Q report for the quarterly period ended March 1, 2008.





On
      March
      31, 2008, we issued a press release announcing our financial results for the
      quarter ended March 1, 2008. ****





**ITEM
      6. EXHIBITS**


a.
                    Exhibits No.
              
              Description10.11(c)
              
              Sixth
                  Amendment Agreement, dated as of January 30, 2008, among Cal-Maine
                  Foods,
                  Inc. and John Hancock Life Insurance Company and John Hancock Variable
                  Life Insurance Company (without exhibits, schedules or
                  annex)31.1
              
              Certification
                  of The Chief Executive Officer31.2
              
              Certification
                  of The Chief Financial Officer32.0
              
              Written
                  Statement of The Chief Executive Officer and The Chief Financial
                  Officer99.1
              
              Press
                  release dated March 31, 2008 announcing interim period financial
                  information




17





**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




CAL-MAINE FOODS, INC.
              (Registrant)Date:
              March 31, 2008
            
            /s/
              Timothy A. DawsonTimothy
                A. Dawson
              Vice
                President/Treasurer
              (Principal
                Financial Officer)




Date:
                March 31, 2008
              
              /s/
                Charles F. CollinsCharles
                  F. Collins
                  Vice
                    President/Controller
                  (Principal
                      Accounting Officer)
  18