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 September 1, 2007
 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 September 28, 2007.
  Common Stock, $0.01 par value
              21,231,991 sharesClass A Common Stock, $0.01 par
                value
              2,400,000
                shares
 
 
 
 **CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 
 **INDEX**
  **Part
                I.**
              **Financial
                Information**
              **Page**
                **Number**Item
                  1.
              
              Condensed
                  Consolidated Financial Statements (Unaudited)Condensed
                    Consolidated Balance Sheets -September
                  1, 2007 and June 2, 2007
              3Condensed
                      Consolidated Statements of Operations -
                    Thirteen
                      Weeks Ended September 1, 2007 and
                    September
                      2, 2006
              4Condensed
                      Consolidated Statements of Cash Flow -
                    Thirteen
                        Weeks Ended September 1, 2007 and
                      September
                        2, 2006
              5Notes
                  to Condensed Consolidated Financial Statements
              6Item
                2.
              
              Management’s
                    Discussion and Analysis of
                  Financial
                      Condition and Results of Operations
              9Item
                  3.
              
              Quantitative
                  and Qualitative Disclosures of Market Risk
              13Item
                  4.
              
              Controls
                  and Procedures
              13**Part
                II.**
              **Other
                Information**Item
                1.
              
              Legal
                Proceedings
              14Item
                1A.
              
              Risk
                Factors
              15Item
                2.
              
              Unregistered
                Sales of Equity Securities and Use of Proceeds
              15Item
                5.
              
              Other
                Information
              15Item
                6.
              
              Exhibits
              15Signatures
              
              
              16
 
 2
  **PART
        I. FINANCIAL INFORMATION**
 
 **ITEM
        1. FINANCIAL STATEMENTS**
 
 **CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**
 **(in
        thousands, except share amounts)**
  September
                  1, 2007
              
              June
                  2, 2007(unaudited)
              
              (note
                  1)ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              23,117
              
              $
              15,032Investments
              
              
              46,951
              
              
              39,500Trade
                  and other receivables
              
              
              45,051
              
              
              38,180Inventories
              
              
              66,310
              
              
              62,208Prepaid
                  expenses and other current assets
              
              
              1,596
              
              
              1,390Total
                  current assets
              
              
              183,025
              
              
              156,310Notes
                  receivable and investments
              
              
              8,373
              
              
              7,913Goodwill
              
              
              4,195
              
              
              4,195Other
                  assets
              
              
              2,944
              
              
              2,560Property,
                  plant and equipment
              
              
              383,788
              
              
              376,316Less
                  accumulated depreciation
              
              
              (187,627
              )
              
              (182,726
              )196,161
              
              
              193,590TOTAL
                  ASSETS
              
              $
              394,698
              
              $
              364,568LIABILITIES
                  AND STOCKHOLDERS’ EQUITYCurrent
                  liabilities:Accounts
                  payable and accrued expenses
              
              $
              62,127
              
              $
              45,051Current
                  maturities of purchase obligation
              
              
              6,769
              
              
              5,435Current
                  maturities of long-term debt
              
              
              13,126
              
              
              13,442Deferred
                  income taxes
              
              
              12,633
              
              
              11,830Total
                  current liabilities
              
              
              94,655
              
              
              75,758Long-term
                  debt, less current maturities
              
              
              97,437
              
              
              99,410Non-controlling
                  interests in consolidated entities
              
              
              1,194
              
              
              1,894Purchase
                  obligation, less current maturities
              
              
              5,848
              
              
              9,867Other
                  non-current liabilities
              
              
              2,180
              
              
              2,150Deferred
                  income taxes
              
              
              19,879
              
              
              19,750Total
                  liabilities
              
              
              221,193
              
              
              208,829Stockholders’
                  equity:Common
                  stock $0.01 par value per share:Authorized
                  shares - 60,000
                Issued
                  35,130 shares and 21,215 shares outstanding at
                September
                  1, 2007 and 21,193 shares at June 2, 2007
              
              
              351
              
              
              351Class
                  A common stock $0.01 par value per share, authorized, issued
                  and
                outstanding
                  2,400 shares at September 1, 2007 and June 2, 2007
              
              
              24
              
              
              24Paid-in
                  capital
              
              
              29,179
              
              
              29,043Retained
                  earnings
              
              
              165,262
              
              
              147,667Common
                    stock in treasury - 13,915 shares at September 1, 2007
                and
                  13,937 shares at June 2, 2007
              
              
              (21,311
              )
              
              (21,346
              )Total
                  stockholders’ equity
              
              
              173,505
              
              
              155,739TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY
              
              $
              394,698
              
              $
              364,568
   See
        notes to
        condensed consolidated financial statements.
  3
 
 **CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(in
        thousands, except per share amounts)**
 **(unaudited)**
 
 13
                  Weeks EndedSeptember
                  1, 2007
              
              September
                  2, 2006Net
                  sales
              
              $
              178,598
              
              $
              115,308Cost
                  of sales
              
              
              133,018
              
              
              106,901Gross
                  profit
              
              
              45,580
              
              
              8,407Selling,
                  general and administrative
              
              
              18,648
              
              
              14,470Operating
                  income (loss)
              
              
              26,932
              
              
              (6,063
              )Other
                  income (expense):Interest
                  expense, net
              
              
              (1,647
              )
              
              (1,795
              )Other
              
              
              1,938
              
              
              (143
              )291
              
              
              (1,938
              )Income
                  (Loss ) before income taxes
              
              
              27,223
              
              
              (8,001
              )Income
                  tax expense (benefit)
              
              
              9,257
              
              
              (2,570
              )Net
                  income (loss)
              
              $
              17,966
              
              $
              (5,431
              )Net
                  income (loss) per common share:Basic
              
              $
              0.76
              
              $
              (0.23
              )Diluted
              
              $
              0.76
              
              $
              (0.23
              )Dividends
                  per common share
              
              $
              0.0125
              
              $
              0.0125Weighted
                  average shares outstanding:Basic
              
              
              23,599
              
              
              23,503Diluted
              
              
              23,724
              
              
              23,503
 
 
 See
        notes to
        condensed  consolidated
        financial  statements.
 
 4
 
 **CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(in
        thousands)**
 **(unaudited)**
 
 13
                  Weeks EndedSeptember
                  1, 2007
              
              September
                  2, 2006Cash
                  provided by (used in) operations
              
              $
              29,687
              
              $
              2,138Investing
                  activities:Net
                  (increase)/decrease in investments
              
              
              (7,450
              )
              
              15,000Purchases
                  of property, plant and equipment
              
              
              (4,530
              )
              
              (5,238
              )Payments
                  received on notes receivable and from investments
              
              
              91
              
              
              328Increase
                  in notes receivable and investments
              
              
              (651
              )
              
              (1,030
              )Net
                  proceeds from disposal of property, plant and equipment
              
              
              173
              
              
              277Net
                  cash (used in) provided by investing activities
              
              
              (12,367
              )
              
              9,337Financing
                  activities:Proceeds
                  from issuance of common stock from treasury
              
              
              117
              
              
              -Payment
                  of purchase obligation
              
              
              (6,769
              )
              
              (6,101
              )Principal
                  payments on long-term debt
              
              
              (2,289
              )
              
              (1,660
              )Payments
                  of dividends
              
              
              (294
              )
              
              (292
              )Net
                  cash used in financing activities
              
              
              (9,235
              )
              
              (8,053
              )Net
                  change in cash and cash equivalents
              
              
              8,085
              
              
              3,422Cash
                  and cash equivalents at beginning of period
              
              
              15,032
              
              
              13,295Cash
                  and cash equivalents at end of period
              
              $
              23,117
              
              $
              16,717
 
 See
        notes to
        condensed consolidated financial statements.
 
 5
 
 **CAL-MAINE
        FOODS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Financial Statements
 (in
        thousands, except per share amounts)
 September
        1, 2007
 (unaudited)
 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 weeks ended September
        1,
        2007 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 $27,000 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 $6,100, 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 $6,800, 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 $12,600 as of September
          1, 2007, of which $6,800 is included in current liabilities and $5,800
          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 Membe rship
          Units as of August 2, 2008.
 
 **Stock
          Based Compensation**
 
 In
          December 2004, the FASB issued SFAS Statement No. 123 (revised 2004),
          "Share-Based Payment," which is a revision of SFAS No. 123, "Accounting for
          Stock-Based Compensation." SFAS No. 123(R) supersedes APB Opinion
          No. 25, " Accounting for
          Stock Issued to Employees", and amends SFAS No. 95, "Statement of Cash
          Flows". SFAS No. 123(R) requires all share-based payments to employees,
          including grants of employee stock options, restricted stock and
          performance-based shares to be recognized in the income statement based
          on their
          fair values. SFAS No. 123(R) also requires the benefits of tax deductions
          in excess of recognized compensation cost to be reported as a financing
          cash
          flow, rather than as an operating cash flow as required under current
          literature. This requirement will reduce net operating cash flows and increase
          net financing cash flows in periods after adoption. In the first quarter
          of
          fiscal 2007, we adopted SFAS No. 123(R) using the modified prospective
          method. Under the modified prospective method, compensation cost will be
          recognized for all share-based payments granted after the adoption of SFAS
          No. 123(R) and for all awards granted to employees prior to the adoption
          date of SFAS No. 123R that remain unvested on the adoption date.
          Accordingly, no restatements were made to prior periods. We recognized
          stock
          based compensation expense of $1,826 and $160 for the thirteen week periods
          ending September 1, 2007 and September 2, 2006 respectively.
  6
  Prior
          to
          adoption of SFAS No. 123(R), we applied APB No. 25 in accounting for our
          employee stock compensation plans and generally recognized no compensation
          expense for employee stock options. Under the provisions of APB No. 25,
          we
          recognized a liability for Stock Appreciation Rights (“SARS”) and Tandem Stock
          Appreciation Rights (“TSARS”) based upon the intrinsic value of vested SARS and
          TSARS at each period end. Under SFAS No. 123(R), we are required to recognize
          a
          liability for vested SARS and TSARS based upon their fair value at each
          period
          end using a Black-Scholes option pricing model and to record a cumulative
          effect
          adjustment for the change in method of accounting for such liability awards.
          The
          cumulative effect resulting from the adoption of SFAS No. 123(R) was
          insignificant and is included in stock based compensation expense for the
          thirteen week period ended September 2, 2006.
 
 Our
        stock-based compensation plans are described in note 1 of the consolidated
        financial statements included in our Annual Report on Form 10-K for the fiscal
        year ended June 2, 2007. These plans have not been modified in the 2008 fiscal
        year.
 
 A
        summary
        of our equity award activity and related information for the thirteen weeks
        ended September 1, 2007 is as follows:
 Number
                    of Options
                
                Weighted
                    Average Exercise Price Per Share
                
                Weighted
                    Average Remaining Contractual Life (in Years)
                
                Aggregate
                    Intrinsic ValueOutstanding,
                    June 2, 2007
                
                
                383,600
                
                $
                5.45Granted
                
                
                -
                
                
                -Exercised
                
                
                22,800
                
                
                5.13Forfeited
                
                
                -
                
                
                -Outstanding,
                    September 1, 2007
                
                
                360,800
                
                $
                5.47
                
                
                7.58
                
                $
                5,166Exercisable,
                    September 1, 2007
                
                
                135,200
                
                $
                4.98
                
                
                7.23
                
                $
                2,003
 
 The
        number and weighted average grant-date fair value of nonvested equity awards
        was
        as follows:
 Number
                    of Shares
                
                Weighted
                    Average Grant-Date Fair Value Per ShareNonvested,
                    June 2, 2007
                
                
                305,880
                
                $
                2.61Granted
                    during quarter
                
                
                -
                
                
                -Vested
                    during quarter
                
                
                (85,080
                )
                
                2.48Forfeited
                    during quarter
                
                
                -
                
                
                -Nonvested,
                    September 1, 2007
                
                
                220,800
                
                $
                2.65
  7
  A
        summary
        of our liability award activity and related information for the thirteen
        weeks
        ended September 1, 2007 is as follows:
 Number
                    Of Rights
                
                Weighted
                    Average Strike Price Per Right
                
                Weighted
                    Average Remaining Contractual Life (in Years)
                
                Aggregate
                    Intrinsic ValueOutstanding,
                    June 2, 2007
                
                
                492,450
                
                $
                5.95Granted
                
                
                -
                
                
                -Exercised
                
                
                42,700
                
                
                5.98Forfeited
                
                
                6,000
                
                
                5.93Outstanding,
                    September 1, 2007
                
                
                443,750
                
                $
                5.94
                
                
                7.96
                
                $
                6,144
                    822Exercisable,
                    September 1, 2007
                
                
                121,250
                
                $
                5.79
                
                
                7.86
                
                $
                1,696
                    311
  The
        fair
        value of liability awards was estimated as of September 1, 2007 using a
        Black-Scholes option pricing model and the following weighted-average
        assumptions: risk-free interest rate of 4.25%; dividend yield of 1%; volatility
        factor of the expected market price of our stock of 32.1%; and a
        weighted-average expected life of the rights of four years.
 
 2.  Inventories
 
 Inventories
        consisted of the following:
  September
                  1, 2007
              
              June
                  2, 2007Flocks
              
              $
              42,042
              
              $
              40,773Eggs
              
              
              4,381
              
              
              4,704Feed
                  and supplies
              
              
              19,887
              
              
              16,731$
              66,310
              
              $
              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
        Loss per Common
        Share
 
 Basic
        loss per share is based on the weighted average common shares outstanding.
        Diluted loss per share includes any dilutive effects of options and warrants.
        Options and warrants representing 473 **,** 400
        shares were excluded from the calculation of diluted earnings per share for
        the
        thirteen week period ended September 2, 2006 because they would be anti-dilutive
        since we had a net loss for the period.
 
 8
 
 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 September 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.
 
 **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.
 
 We
        currently produce approximately 78% of the total number of shell eggs sold
        by
        us, with approximately 10% 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
        22% of the total number of shell eggs sold by us is 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 average about 57%
        of
        our total shell egg production cost. Changes in feed costs result in changes
        in
        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.
  9
 
 RESULTS
        OF OPERATIONS
 
 The
        following table sets forth, for the periods indicated, certain items from
        our
        Condensed Consolidated Statements of Operations expressed as a percentage
        of net
        sales.
 
 Percentage
                  of Net Sales13
                  Weeks EndedSeptember
                  1, 2007
              
              September
                  2, 2006Net
                  sales
              
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              74.5
              
              
              92.7Gross
                  profit
              
              
              25.5
              
              
              7.3Selling,
                  general & administrative
              
              
              10.4
              
              
              12.5Operating
                  income (loss)
              
              
              15.1
              
              
              (5.2
              )Other
                  income (expense)
              
              
              .1
              
              
              (1.7
              )Income
                  (loss) before taxes
              
              
              15.2
              
              
              (6.9
              )Income
                  tax expense (benefit)
              
              
              5.2
              
              
              (
                  2.2
              )Net
                  income (loss)
              
              
              10.0
              %
              
              (4.7
              )%
 
 NET
        SALES
 
 Approximately
        92% of our net sales consist of shell egg sales and approximately 4% was
        for
        incidental feed sales to outside egg producers, with the 4% balance consisting
        of sales of egg products. Net sales for the first quarter of fiscal 2008
        were
        $178.6 million, an increase of $63.3 million, or 54.9 %, as compared to net
        sales of $115.3 million for the first quarter of fiscal 2007. Total dozen
        eggs
        sold decreased and egg selling prices increased in the current fiscal 2008
        quarter as compared to the same fiscal 2007 quarter. Dozens sold for the
        2008
        current quarter were 163.9 million dozen a decrease of 7.7 million dozen,
        or
        4.5%, as compared to the first quarter of fiscal 2007. Our net average selling
        price per dozen for the fiscal 2008 first quarter was $.983, compared to
        $.633
        for the first quarter of fiscal 2007, an increase of 55.3%. Our net average
        selling price is the blended price for all sizes and grades of shell eggs,
        including non-graded egg sales, breaking stock and undergrades. Strengthened
        by
        an egg export order in May and in August, consumer demand during the first
        quarter of fiscal 2008, remained steady, while egg supply remained tight,
        resulting in an increase in egg selling prices.
 
 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 first quarter of fiscal 2008 was $133.0
        million, an increase of $26.1 million, or 24.4%, as compared to the cost
        of
        sales of $106.9 million for the first quarter of fiscal 2007. The increase
        is
        due to increases in feed costs and the cost of egg purchases from outside
        egg
        producers. Following the increase in egg selling prices, the cost of outside
        purchases increased. Feed cost per dozen for the fiscal 2008 first quarter
        was
        $.285, compared to $.216 per dozen for the comparable fiscal 2007 first quarter,
        an increase of 31.9% for the current 2008 quarter. The increase in egg selling
        prices exceeded the increase in cost of sales and resulted in an increase
        in
        gross profit from 7.3% of net sales for the quarter ended September 2, 2006
        to
        25.5% of net sales for the current quarter ended September 1, 2007.
 
 10
 SELLING,
          GENERAL AND ADMINISTRATIVE EXPENSES
 
 Selling,
          general and administrative expenses include costs of marketing, distribution,
          accounting and corporate overhead. Selling, general and administrative
          expense
          for the first quarter of fiscal 2008 was $18.6 million, an increase of
          $4.1
          million as compared to the expense of $14.5 million for the first quarter
          of
          fiscal 2007. The increase is due to increases in payroll expenses, stock
          compensation expense and franchise fees on specialty egg sales. Net delivery
          costs decreased due to a reduction in the number of Company long haul trucks,
          increased back haul loads, offset by increased use of contract trucking.
          As a
          percent of net sales, selling, general and administrative expense decreased
          from
          12.5% for fiscal 2007 first quarter to 10.4% for fiscal 2008 first
          quarter.
 
 OPERATING
          INCOME (LOSS)
 
 As
          a
          result of the above, operating income was $26.9 million for the first quarter
          of
          fiscal 2008, as compared to an operating loss of $6.1 million for the fiscal
          2007 first quarter. As a percent of net sales, the first fiscal 2008 quarter
          had
          an operating income of 15.1% of net sales, compared to an operating loss
          of 5.2%
          of net sales for the first quarter of 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 in income
            (loss) of
            affiliates. Other income for the first quarter ended September 1, 2007
            was
            $291,000, an increase of $2.2 million, as compared to other expense of
            $1.9
            million for the quarter ended September 2, 2006. For the first quarter
            of fiscal
            2008, net interest expense decreased $148,000 due to an increase of $280,000
            in
            interest income. For the first quarter of fiscal 2008 other income increased
            $2.1 million, as compared to the first quarter of fiscal 2007.  The
            increase of other income is attributable to the increase in income /(loss)
            absorbed by non-controlling interests in consolidated entities and increases
            from equity in the income of nonconsolidated affiliates.  Included
            in net interest expense is non-cash interest expense, which decreased
            by
            $107,000. The non-cash interest expense is imputed on our non-interest
            bearing
            obligation to acquire the remaining membership units of Hillandale, LLC
            over the
            remaining acquisition period, culminating with us having a 100% interest
            in
            Hillandale, LLC. As a percent of net sales, other income (expense) increased
            from (1.7%) for fiscal 2007 first quarter to .1% for fiscal 2008 first
            quarter.
 
 INCOME
        TAXES
 
 As
        a
        result of the above, we had pre-tax income of $27.2 million for the quarter
        ended September 1, 2007, as compared to a pre-tax loss of $8.0 million for
        the
        quarter ended September 2, 2006. For the fiscal 2008 first quarter, an income
        tax expense of $9.3 million was recorded with an effective tax rate of 34.0%,
        as
        compared to an income tax benefit of $2.6 million with an effective tax rate
        of
        32.1% for the fiscal 2007 first quarter.
 
 NET
        INCOME (LOSS)
 
 As
        a
        result of the above, net income for the first quarter ended September 1,
        2007
        was $18.0 million, or $.76 per basic and diluted share, compared to a net
        loss
        of $5.4 million, or $.23 per basic share for the quarter ended September
        2,
        2006. As a percent of net sales, net income was 10.0% for the quarter ended
        September 1, 2007, compared to a net loss of 4.7% for the quarter ended
        September 2, 2006.
 
 CAPITAL
        RESOURCES AND LIQUIDITY
 
 Our
        working capital at September 1, 2007 was $88.4 million compared to $80.6
        million
        at June 2, 2007. Our current ratio was 1.93 at September 1, 2007 as compared
        with 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 three banks, $2.7 million of which was utilized
        as a standby letter of credit at September 1, 2007. Our long-term debt at
        September 1, 2007, including current maturities, amounted to $110.6 million,
        as
        compared to $112.9 million at June 2, 2007.
  11
  For
        the
        thirteen weeks ended September 1, 2007, $29.7 million in net cash was provided
        by operating activities. This compares to net cash provided of $2.1 million
        for
        the thirteen weeks ended September 2, 2006. In the first 2008 fiscal quarter,
        approximately $7.5 million was used for the purchase of short-term investments
        and net $560,000 was used for notes receivable and investments. Approximately
        $173,000 was provided from disposal of property, plant and equipment, $4.5
        million was used for purchases of property, plant and equipment and $6.8
        million
        was used for additional acquisition of the Hillandale business. Approximately
        $294,000 was used for payments of dividends on common stock and $2.3 million
        was
        used for principal payments on long-term debt. Approximately $117,000 was
        received from the issuance of common stock from the treasury. The net result
        of
        these activities was an increase in cash of approximately $8.1 million since
        June 2, 2007 .
  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
        dividends to an aggregate amount not to exceed $500,000 per quarter (allowed
        if
        no default), capital expenditures less exclusions (not to exceed 125% of
        depreciation for the same four 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 September 1, 2007, 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
        present value of $12.6 million. 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.
 
 Capital
        expenditure requirements are expected to be for the normal repair and
        replacement of our facilities. In addition, we have plans to construct 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.
 
 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 operations or stockholders' equity, as these taxes have been
        accrued and are reflected on our consolidated balance sheet.
 
 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.
 
 12
 
 ***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 September 1, 2007 that we expect will have a material impact
        on our consolidated financial statements.
 
 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 September 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. The provisions of FAS 157 are not
        expected to have a material impact on the Company's consolidated financial
        statements.
 
 In
        February 2007, the FASB issued SFAS No. 159, "Establishing the Fair Value
        Option
        for Financial Assets and Liabilities", to permit all entities to choose to
        elect
        to measure eligible financial instruments at fair value. SFAS No. 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 SFAS No. 157.
        An
        entity is prohibited from retrospectively applying SFAS No. 159, unless it
        chooses early adoption. Management is currently evaluating the impact of
        SFAS
        No. 159 on its consolidated financial statements. ****
 
 ***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 OF MARKET RISK
 
 There
        have been no 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 be disclosed 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.
  13
 
 **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., one of our subsidiaries, 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. Alpharma, Inc. and Alpharma Animal Health, Co., manufacturers
        of an
        additive for broiler feed, are also included as defendants.
 
 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, but it clearly colors the plaintiffs’ prospects for
        success.
 
 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 seem 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.
 
 **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. We no longer have any direct operations
        in the Watershed. We do have an ownership interest in a limited liability
        company that has operations in the Watershed. We do not anticipate that we
        will
        be materially affected by any request for injunctive relief.
 
 Merit
        discovery is ongoing. Cal-Maine 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.
        We are
        not able at present to provide an opinion regarding the ultimate resolution
        of
        this action.
 
 14
 
 **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.
 
 **ITEM
        2** **.**  **UNREGISTERED
        SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** ****
  We
        made
        no sales of unregistered securities during the first quarter of fiscal
        2008.
 
 For
        information as to working capital utilization and limitations upon the payment
        of dividends see “Capital Resources” under Part 1, Item 2. Management’s
        Discussion and Analysis of Financial Condition and Results of Operations
        of this
        Form 10-Q.
 
 **ITEM
        5. OTHER INFORMATION** ****
 
 On
        October 1, 2007, we issued a press release announcing our financial results
        for
        the quarter ended September 1, 2007.
 
 **ITEM
        6. EXHIBITS**
 a.
                ExhibitsNo.
                Description31.1
                Certification
                    of The Chief Executive Officer31.2
                Certification
                    of The Chief Financial Officer32.0
                S
                    ection 1350 Certification of The Chief Executive Officer and
                    The Chief
                    Financial Officer99.1
                Press
                    release dated October 1, 2007 announcing interim period financial
                    information
                  (Incorporated
                    by reference to Exhibit 99.1 of our Form 8-K dated October 1,
                    2007.)
  15
 
 **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:
        October 3, 2007  _____ /s/
        Timothy A. Dawson __________________________
 Timothy
        A. Dawson
 Vice
        President/Chief Financial Officer
 (Principal
        Financial Officer)
 
 
 Date:
        October 3, 2007  ____ /s/
        Charles F. Collins _________________________
 Charles
        F. Collins
 Vice
        President/Controller
 (Principal
        Accounting Officer)
 
 16