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 November 29, 2003

OR

||_| | 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_____

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2).

Yes_____   No X

Number
of shares outstanding of each of the issuers classes of common stock (exclusive of
treasury shares), as of December 30, 2003.

|                                      |                  
|------------------------------------- | -----------------
|Common Stock, $0.01 par value         | 10,859,869 shares
|Class A Common Stock, $0.01 par value | 1,200,000 shares 

---

# CAL-MAINE FOODS, INC.

# INDEX

|                                                                 | Page  
|---------------------------------------------------------------- | ------
|Part I.  Financial Information                                   | Number
|Item 1.  Condensed Consolidated Financial Statements (Unaudited)
|Condensed Consolidated Balance Sheets -                         
|November 29, 2003 and May 31, 2003                               | 3     
|Condensed Consolidated Statements of Income -                   
|Three Months and Six Months Ended                               
|November 29, 2003 and November 30, 2002                          | 4     
|Condensed Consolidated Statements of Cash Flows -               
|Six Months Ended November 29, 2003 and                          
|November 30, 2002                                                | 5     
|Notes to Condensed Consolidated Financial Statements             | 6     
|Item 2.  Management's Discussion and Analysis of                
|Financial Condition and Results of Operations                    | 8     
|Item 3.  Quantitative and Qualitative Disclosures of Market Risk | 14    
|Item 4.  Controls and Procedures                                 | 14    
|Part II.  Other Information                                     
|Item 1.  Legal Proceedings                                       | 15    
|Item 6.  Exhibits and Reports on Form 8-K                        | 16    
|Signatures                                                       | 18    

2

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# PART I.  FINANCIAL
INFORMATION

# ITEM 1.  FINANCIAL
STATEMENTS

# CAL-MAINE FOODS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except
share amounts)

|                                                               
|---------------------------------------------------------------
|(unaudited)                                                    
|ASSETS                                                         
|Current assets:                                                
|Cash and cash equivalents                                      
|Trade and other receivables                                    
|Recoverable federal income taxes                               
|Inventories                                                    
|Prepaid expenses and other current assets                      
|                                                               
|Total current assets                                           
|Notes receivable and investments                               
|Goodwill                                                       
|Other assets                                                   
|Property, plant and equipment                                  
|Less accumulated depreciation                                  
|                                                               
|                                                               
|                                                               
|TOTAL ASSETS                                                   
|                                                               
|LIABILITIES AND STOCKHOLDERS' EQUITY                           
|Current liabilities:                                           
|Accounts payable and accrued expenses                          
|Current maturities of long-term debt                           
|Deferred income taxes                                          
|                                                               
|Total current liabilities                                      
|Long-term debt, less current maturities                        
|Other non-current liabilities                                  
|Deferred income taxes                                          
|                                                               
|Total liabilities                                              
|Stockholders' equity:                                          
|Common stock $0.01 par value per share:                        
|Authorized shares - 30,000,000                                 
|Issued and outstanding shares - 17,565,200 at November 29, 2003
|and May 31, 2003                                               
|Class A common stock $0.01 par value, authorized, issued and   
|outstanding 1,200,000 shares                                   
|Paid-in capital                                                
|Retained earnings                                              
|Common stock in treasury-6,797,301 shares at November 29, 2003 
|and  7,000,812 shares at May 31, 2003                          
|                                                               
|Total stockholders' equity                                     
|                                                               
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     
|                                                               

See
notes to condensed consolidated financial statements.

3

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

|                       
|-----------------------
|November 29, 2003      
|Net sales              
|Cost of sales          
|                       
|Gross profit           
|Selling, general and   
|administrative         
|                       
|Operating income       
|Other income (expense):
|Interest expense, net  
|Other                  
|                       
|                       
|                       
|Income before income   
|taxes                  
|Income tax expense     
|                       
|Net income             
|                       
|Net income per common  
|share:                 
|Basic                  
|                       
|Diluted                
|                       
|Weighted average shares
|outstanding:           
|Basic                  
|                       
|Diluted                
|                       

See notes to condensed consolidated
financial statements.

4

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# CAL-MAINE FOODS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

|                                                          
|----------------------------------------------------------
|November 29, 2003                                         
|Cash flows provided by (used in) operating activities     
|Cash flows from investing activities:                     
|Purchases of property, plant and equipment                
|Construction of production facilities                     
|Payments received on notes receivable and from investments
|Increase in note receivable, investments and other assets 
|Net proceeds from sale of property, plant and equipment   
|                                                          
|Net cash used in investing activities                     
|Cash flows from financing activities:                     
|Net borrowings on notes payable to banks                  
|Long-term borrowings                                      
|Principal payments on long-term debt and capital leases   
|Additional paid-in capital                                
|Sale of common stock from treasury                        
|Payment of dividends                                      
|                                                          
|Net cash provided by (used in) financing activities       
|                                                          
|Increase (decrease) in cash and cash equivalents          
|Cash and cash equivalents at beginning of period          
|                                                          
|Cash and cash equivalents at end of period                
|                                                          

See notes to condensed consolidated
financial statements.

5

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CAL-MAINE FOODS, INC.
AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (in thousands,
except share amounts)  November 29, 2003  (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 three-month and six-month
periods ended November 29, 2003 are not necessarily indicative of the results that may be
expected for the year ending May 29, 2004.

The
balance sheet at May 31, 2003 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 May 31, 2003.

# Stock Based Compensation

The Company accounts for stock option
grants in accordance with APB Opinion No. 25, Accounting for Stock Issued to
Employees.

The following table illustrates the
effect on net income and earnings per share if the Company had applied the fair value
recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock- Based Compensation, which require compensation cost for
all stock-based employee compensation plans to be recognized based on the use of a fair
value method (in thousands except per share amounts):

|                                   
|-----------------------------------
|Nov. 29, 2003                      
|Net income                         
|Add:  Stock-based employee         
|compensation expense included in   
|reported net income                
|Deduct:  Total stock-based employee
|compensation expense determined    
|under fair value-based method for  
|all awards                         
|                                   
|Pro forma net income               
|                                   
|Earnings per share:                
|Basic-as reported                  
|                                   
|Basis-pro forma                    
|                                   
|Diluted-as reported                
|                                   
|Diluted-pro forma                  
|                                   

6

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|2. | Inventories
|-- | -----------

| | Inventories
consisted of the following:
| | ---------------------------------------

|                 
|-----------------
|Flocks           
|Eggs             
|Feed and supplies
|Livestock        
|                 
|                 
|                 

|3. | Other
Matters
|-- | -------------

In
its Form 8-K filing dated November 6, 2003, the Company announced the termination of
its proposed going private transaction.

7

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# ITEM  2.  MANAGEMENTSS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Cal-Maine
Foods, Inc. (the" Company") is primarily engaged in the production, grading, packing and
sale of fresh shell eggs.  The Company's fiscal year end is the Saturday closest to May
31.

The
Companys operations are fully integrated. At its facilities it hatches chicks, grows
pullets, manufactures feed, and produces, processes, and distributes shell eggs. The
Company currently is the largest producer and distributor of fresh shell eggs in the
United States. Shell egg sales, including feed sales to outside egg producers, account for
99% of the Companys net sales. The Company primarily markets its shell eggs in the
southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.
Shell eggs are sold directly by the Company primarily to national and regional supermarket
chains.

The
Company currently uses contract producers for approximately 13% of its total egg
production. Contract producers operate under agreements with the Company for the use of
their facilities in the production of shell eggs by layers owned by the Company, which
owns the eggs produced. Also, shell eggs are purchased from outside producers for resale,
as needed, by the Company.

The
Companys operating income or loss is significantly affected by wholesale shell egg
market prices, which can fluctuate widely and are outside of the Companys 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.

The
Companys cost of production is materially affected by feed costs, which average
about 55% of the Companys total farm egg production cost. Changes in feed costs
result in changes in the Companys 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, over which the Company has little
or no control.

According
to U.S. Department of Agriculture reports, laying hen numbers on December 1, 2003 were
slightly lower than a year ago. Current industry projections are that, for the year ahead,
laying hen numbers will be very close to this past year. Corn and soybean prices are
projected to be somewhat higher in the year ahead and could result in higher feed
ingredient cost. Based upon the past few years, the prices should be within the moderate
range.

RESULTS OF OPERATIONS

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

|                                 
|---------------------------------
|13 Weeks Ended                   
|Nov. 29, 2003                    
|Net sales                        
|Cost of sales                    
|                                 
|Gross profit                     
|Selling, general & administrative
|                                 
|                                 
|Operating income                 
|Other expense                    
|                                 
|Income before taxes              
|Income tax expense               
|                                 
|Net income                       
|                                 

8

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NET SALES

Net
sales for the second quarter of fiscal 2004 were $149.9 million, an increase of $54.9
million, or 57.8% as compared to net sales of $95.0 million for the second quarter of
fiscal 2003. Total dozens of eggs sold increased in the current quarter and egg selling
prices increased as compared with prices last year. Dozens sold for the current quarter
were 153.7 million dozen, an increase of 8.8 million dozen, or 6.1% as compared to the
second quarter of last year. The new egg production and processing facility at Guthrie, KY
provided about half of the increase in dozens sold, with additional dozens purchased from
outside egg producers making up the balance. Domestic demand for eggs is good, and overall
egg supply is balanced. This resulted in higher egg selling prices during the current
quarter. The Companys net average selling price per dozen for the fiscal 2004 second
quarter was $.944, compared to $.622 for the second quarter of last year, an increase of
51.8%. The Companys 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

Net
sales for the twenty-six weeks ended November 29, 2003 were $264.3 million, an increase of
$87.1 million, or 49.2%. As in the current quarter, total dozens sold increased and net
egg selling prices increased. Dozens sold for the current twenty-six week period were
300.7 million as compared to 280.9 million for last fiscal year, an increase of 19.8
million dozen, or 7.0%. Over half of the increase in dozens sold was provided by the
Companys facilities. As discussed above, favorable egg market conditions resulted in
increased egg selling prices. For the current twenty-six week period, the Companys
net average selling price per dozen was $.847, compared to $.598 per dozen last year, an
increase of $.249 per dozen, or 41.6%.

The
Company believes its financial results for recent periods have been positively affected by
favorable publicity about eggs from the medical community and increased use of eggs in
high protein diets that are currently popular.

COST OF SALES

Total
cost of sales for the second quarter ended November 29, 2003 was $99.2 million, an
increase of $19.6 million, or 24.6%, as compared to the cost of sales of $79.6 million for
last years second quarter. The increase is due to increases in dozens sold, higher
costs of eggs purchased from outside producers and a small increase in the cost of feed
ingredients. Dozens of eggs sold increased 8.8 million for the current quarter. Due to the
increase in egg selling prices, the cost of these outside purchases increased sharply, as
reflected in the Companys 51.8% increase in average egg selling prices. Feed cost
for the second quarter ended November 29, 2003 was $.229 per dozen, an increase of 4.0%,
as compared to last fiscal years cost per dozen of $.220. During the second quarter
of the last fiscal year, the Company recognized $2.9 million as a reduction in cost of
sales for its share in the settlement of certain class action feed ingredient lawsuits.
Other operating costs remained in the same ranges for both the current and last year first
fiscal quarters. The increase in egg selling prices and dozens sold, offset by the
increases in cost of sales, resulted in a net increase in gross profit from 16.2% of net
sales for the quarter ended November 30, 2002 to 33.9% of net sales for the current
quarter ended November 29, 2003.

For
the twenty-six week period ended November 29, 2003, total cost of sales was $186.9
million, an increase of $35.1 million, or 23.1%, as compared to the cost of sales of
$151.8 million for the comparable last year. As in the quarter, the increase in cost of
sales is the result of more dozens sold, higher cost of eggs purchased from outside
producers and an increase in the cost of feed ingredients. Eggs sold increased 19.8
million dozen in the current year. Feed cost for the current twenty-six weeks was $.221
per dozen, compared to $.208 per dozen for the comparable last year, an increase of 6.2%.
As in the quarter, the increase in egg selling prices, offset by the increases in cost of
sales, resulted in a net increase in gross profit from 14.3% of net sales for last year to
29.3% for the twenty-six week period ended November 29, 2003.

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES

9

---

Selling,
general and administrative expense for the second quarter ended November 29, 2003 was
$23.2 million, an increase of $12.9 million, as compared to $10.3 million for last fiscal
years second quarter. In the second quarter, the Company took a charge for stock
compensation in the amount of $10.6 million in connection with its outstanding stock
options and the related tandem stock appreciation rights. The charge is in accordance with
the Companys accounting policies for stock compensation which are consistent with
Accounting Principles Board Opinion No. 25 Accounting for Stock Issued to Employeesand its related Financial Accounting Standards Board Interpretation 44 Accounting
for Certain Transactions involving Stock Compensation. The charge is directly related
to the increase in the market price of outstanding common shares from $7.20 at August
31, 2003 to $21.10 at November 30, 2003.  The portion of the charge related to the
stock options,$5.3 million , is non-cash and the corresponding liability will be converted
to equity at the time of exercise. For the quarter ended November 30, 2002, the
Companys stock market quote was below stock option strike prices. Excluding the
$10.6 million charge for outstanding stock options, the current quarter comparable
increase for selling, general and administrative expense was $2.3 million, or 22.3%. Of
the $2.3 million increase, $1.6 million was expensed for stock options exercised and
approximately $900,000 was due to increases in legal and professional fees. On a cost per
dozen sold basis, excluding the $10.6 million stock option accrual, selling, general and
administrative expense was $.082 per dozen as compared to $.071 for the comparable quarter
last year. As a percent of net sales, selling, general and administrative expense
increased from 10.8% for fiscal 2003 second quarter to 15.5% for the current quarter.

For
the twenty-six weeks ended November 29, 2003, selling, general and administrative expense
was $36.4 million, an increase of $15.6, as compared to $20.8 million for the same period
last fiscal year. As above, excluding the $10.6 million charge for outstanding stock
options, the current twenty-six weeks comparable increase for selling, general and
administrative expense was $5.0 million, or 24.0%. Of the $5.0 million increase,
approximately $2.0 million was expensed for stock options exercised, $1.2 million was for
increases in legal and professional fees, and $600,000 for increased cost of general
business and property insurance. All other selling, general and administrative expenses
overall had small increases due to the increase in dozens sold. On a cost per dozen sold
basis, excluding the $10.6 million stock option accrual, selling, general and
administrative expense was $.086 for the current twenty-six weeks as compared to $.074 for
the comparable period last year. As a percent of net sales, selling, general and
administrative expense has increased from 11.7% for the first twenty-six weeks of fiscal
2003 to 13.8% for the comparable period in fiscal 2004.

OPERATING INCOME

As
the result of the above, operating income was $27.6 million for the second quarter ended
November 29, 2003, as compared to operating income of $5.1 million for last years
fiscal second quarter. As a percent of net sales, the current fiscal 2004 quarter had a
18.4% operating income, compared to a 5.4% operating income for last year.

For
the twenty-six weeks ended November 29, 2003, operating income was $41.0 million, compared
to operating income of $4.6 million for the comparable period last fiscal year. As a
percent of net sales, the current fiscal period had a 15.5% operating income, compared to
a 2.6% operating income for the same period last year.

OTHER EXPENSE

Other
expense for the second quarter ended November 29, 2003 was $94,000, a decrease of $1.9
million, as compared to $2.0 million for last years second quarter. This net
decrease for the current quarter was the result of an increase of $95,000 in net interest
expense and a $2.0 million increase in other income. Net interest increased due to
additional interest charges incurred in early repayment of some of the long-term debt.
Other income increased from equity in income of affiliates. As a percent of net sales,
other expense was 0.1% for the current fiscal second quarter, compared to 2.1% last year.

For
the twenty-six weeks ended November 29, 2003, other expense was $1.3 million, a decrease
of $2.8 million as compared to an expense of $4.1 million for last year. For the current
period, net interest expense decreased $211,000 and other income increased $2.6 million.
Interest expense decreased due to lower debt balances and increased other income resulted
from increased equity in income of affiliates. As a percent of net sales, other expense
was 0.5% for the current period, as compared to 2.3% for the same period last year.

INCOME TAXES

As
a result of the above, the Companys pre-tax income was $27.5 million for the quarter
ended November 29, 2003, compared to pre-tax income of $3.1 million for last years
quarter. For the current quarter, income tax expense of $9.9 million was recorded with an
effective tax rate of 36.0%, as compared to an income tax expense of $1.1 million with an
effective rate of 35.5% for last years comparable quarter.

10

---

For
the twenty-six week period ended November 29, 2003, the Companys pre-tax income was
$39.7 million, compared to pre-tax income of $464,000 for the comparable period last year.
For the current twenty-six week period, income tax expense of $14.3 million was recorded
with an effective tax rate of 36.0%, as compared to an income tax expense of $167,000,
with an effective rate of 36.0% for last years comparable period.

NET INCOME

Net
income for the second quarter ended November 29, 2003 was $17.6 million, or $1.49 per
basic and $1.45 per diluted share, compared to net income of $2.0 million, or $.17 per
basic and diluted share for last fiscal years second quarter.

For
the twenty-six week period ended November 29, 2003, net income was $25.4 million, or $2.15
per basic share and $2.10 per diluted share, compared to last fiscal years net
income of $297,000, or $.03 per basic and diluted share.

CAPITAL RESOURCES AND
LIQUIDITY

The
Companys working capital at November 29, 2003 was $46.2 million compared to $27.7
million at May 31,2003. The Companys current ratio was 1.62 at November 29, 2003 as
compared with 1.48 at May 31, 2003. The Companys 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. The Company has a $35.0
million line of credit with three banks, none of which was utilized at November 29, 2003.
The Companys long-term debt at November 29, 2003, including current maturities,
amounted to $96.0 million, as compared to $108.2 million at May 31, 2003.

For
the twenty-six weeks ended November 29, 2003, $28.4 million in net cash was provided by
operating activities. This compares to $3.1 million that was used in operating activities
for the comparable period last fiscal year. In the current twenty-six week period, $2.4
million was used for purchases of property, plant and equipment, $289,000 net proceeds
were received from sales of property, plant and equipment, and $1.9 million used for
construction projects. The Companys stock option plan provided $362,000 from sales
of treasury stock and an increase of $1.7 million in additional paid-in capital. Payments
of $295,000 were made for dividends on the common stock. Additional cash of $5.0 million
was received from addional long-term borrowings and repayments of $17.3 million were made
on long-term debt. The net result was an increase in cash of approximately $13.9 million.

For
the comparable period last year, $2.5 million was used for purchases of property, plant
and equipment, $449,000 net proceeds were received from sales of property, plant and
equipment, and $5.0 million used for construction projects. Payments of $293,000 were made
for dividends on the common stock. Additional cash of $14.0 million was received from net
borrowings on the notes payable to banks and repayments of $4.1 million were made on
long-term debt. The net result was a decrease in cash of approximately $539,000.

Substantially
all trade receivables and inventories collateralize the Companys line of credit, and
property, plant and equipment collateralize the Companys long-term debt under its
loan agreements. The Company is required by certain 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 $55.0 million tangible net worth); (2) limit dividends (allowed if no
default), capital expenditures (not to exceed depreciation for the same four fiscal
quarters), lease obligations and additional long-term borrowings (total funded debt to
total capitalization not to exceed 70%); and (3) maintain various current and cash-flow
coverage ratios(1.25to1), among other
restrictions. At November 29, 2003, the Company is in compliance with the provisions of
all loan agreements, including any provisions waived or amended. Under certain of the loan
agreements, the lenders have the option to require the prepayment of any outstanding
borrowings in the event of a change in the control of the Company.

11

---

During
2004, the Company completed construction, began in fiscal 2001, of a shell egg production
and processing facility in Guthrie, Kentucky. Including this construction project, the
Company projects capital expenditures of $11.0 million during fiscal 2004.Funding will be
provided by cash flows from operations and additional long-term borrowings.

The
Company has $2.5 million of 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 the taxes on the cash basis temporary differences as of that date
are generally payable over the 20 years beginning in fiscal 1999 or in the first fiscal
year in which there is a change in ownership control. Payment of the $2.5 million deferred
tax liability would reduce the Companys cash, but would not impact the
Companys consolidated statement of operations or stockholders equity, as these
taxes have been accrued and are reflected on the Companys consolidated balance
sheet.

Impact
of Recently Issued Accounting Standards. In the first quarter of fiscal
2003, the Company adopted Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144).
SFAS No. 144 supersedes Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of, (SFAS No. 121), however, it retains the fundamental provisions of SFAS
No. 121 related to the recognition and measurement of the impairment of long-lived assets
to be held and used. In addition, SFAS No. 144 provides more guidance on
estimating cash flows when performing a recoverability test, requires that a long-lived
asset to be disposed other than by sale (e.g., abandoned) be classified as held and
used until it is disposed of, and establishes more restrictive criteria to classify
an asset as held for sale. The adoption of SFAS No. 144 had no effect on the
Companys consolidated results of operations or financial position.

In
January 2003, the Financial Accounting Standards Board issued Interpretation No. 46,
Consolidation of Variable Interest Entities, an interpretation of Accounting
Research Bulletin No. 51(the Interpretation). The Interpretation requires
the consolidation of entities in which an enterprise absorbs a majority of the
entitys expected losses, receives a majority of the entitys expected residual
returns, or both, as a result of ownership, contractual or other financial interests in
the entity. Currently, entities are generally consolidated by an enterprise when it has a
controlling financial interest through ownership of a majority voting interest in the
entity. The Company has investments in various affiliates established for the purpose of
production, processing, and distribution of shell eggs. These entities are primarily
funded with financing from third party lenders, which is secured by first liens on the
assets of the entities. The creditors of the entities do not have recourse to the Company,
except for one entity for which the Company guarantees 50% of its debt. The Company is
currently evaluating the effects of the issuance of the Interpretation on the accounting
for its investment in the entity. Currently, these investments are recorded as investments
on the equity method of accounting, recording the Companys share of the net income
or loss. The Company has the ability to exercise significant influence over operating and
financial policies. However, the Company does not have a controlling interest in the
respective entities. At November 29, 2003, the Companys aggregate net investment in
these entities totaled $6 million. The portion of the debt guaranteed was $7.0 million at
November 29, 2003. These amounts represent the Companys maximum exposure to loss at
November 29, 2003 as a result of its involvement with these entities. The Company plans to
adopt this Interpretation during the third quarter.

Forward
Looking Statements. The foregoing statements contain forward-looking
statements that involve risks and uncertainties and the Companys actual experience
may differ materially from that discussed above. Factors that may cause such a difference
include, but are not limited to, those discussed in Factors Affecting Future
Performance below, as well as future events that have the effect of reducing the
Companys available cash balances, such as unanticipated operating losses or capital
expenditures related to possible future acquisitions. Readers are cautioned not to place
undue reliance on forward-looking statements, which reflect managements analysis
only as the date hereof. The Company assumes no obligation to update forward-looking
statements. See also the Companys reports to be filed from time to time with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

Factors
Affecting Future Performance.The Companys future operating results
may be affected by various trends and factors that are beyond the Companys control.
These include adverse changes in shell egg prices and in the grain markets. Changes in how
eggs are currently perceived by the medical community and the extent to which eggs
continue to be used in high protein diets also may affect future operating results.
Accordingly, past trends should not be used to anticipate future results and trends.
Further, the Companys prior performance should not be presumed to be an accurate
indication of future performance.

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Critical Accounting Policies.The preparation of financial
statements in accordance with accounting standards generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from these
estimates.

Management suggests that the
Companys 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 May 31, 2003, be read in
conjunction with this Managements Discussion and Analysis of Financial Condition and
Results of Operations. The Company believes the critical accounting policies that most
impact the Companys consolidated financial statements are described below.

Allowance for Doubtful Accounts. In the normal course of business, the Company extends credit to its customers on a
short-term basis. Although credit risks associated with our customers are considered
minimal, the Company routinely reviews its accounts receivable balances and makes
provisions for probable doubtful accounts. In circumstances where management is aware of a
specific customers inability to meet its financial obligations to the Company (e.g.
bankruptcy filings), a specific reserve is recorded to reduce the receivable to the amount
expected to be collected. For all other customers, the Company recognizes reserves for bad
debts based on the length of time the receivables are past due, generally 100% for amounts
more than 60 days past due.

Inventories. Inventories
of eggs, feed, supplies and livestock are valued principally at           the lower of
cost (first-in, first-out method) or market. If market prices for           eggs and feed
grains move substantially lower, the Company would record           adjustments to
write-down the carrying values of eggs and feed inventories to           fair market
value.

The
cost associated with flock inventories, consisting principally of chick purchases, feed,
labor, contractor payments and overhead costs, are accumulated during the growing period
of approximately 18 weeks. Capitalized flock costs are then amortized over the productive
lives of the flocks, generally one to two years. Flock mortality is charged to cost of
sales as incurred. High mortality from disease or extreme temperatures would result in
abnormal adjustments to write-down flock inventories. Management continually monitors each
flock and attempts to take appropriate actions to minimize the risk of mortality loss.

Long-Lived Assets.
Depreciable long-lived assets are primarily comprised of buildings and improvements and
machinery and equipment. Depreciation is provided by the straight-line method over the
estimated useful lives, which are 15 to 25 years for buildings and improvements and 3 to
12 years for machinery and equipment. An increase or decrease in the estimated useful
lives would result in changes to depreciation expense.

The
Company continually reevaluates the carrying value of its long-lived assets, for events or
changes in circumstances, which indicate that the carrying value may not be recoverable.
As part of this reevaluation, the Company estimates the future cash flows expected to
result from the use of the asset and its eventual disposal. If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the carrying
amount of the asset, an impairment loss is recognized to reduce the carrying value of the
long-lived asset to the estimated fair value of the asset.

Investment in Affiliates. The
Company has invested in other companies engaged in the production, processing and
distribution of shell eggs and egg products. The Companys ownership percentages in
these companies range from less than 20% to 50%. Therefore, these investments are recorded
using the cost or the equity method, and accordingly, not consolidated in the
Companys financial statements. Changes in the ownership percentages of these
investments might alter the accounting methods currently used. The Company is a guarantor
of approximately $7.0 million of long-term debt of one of the affiliates.

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Goodwill. Goodwill
primarily relates to the fiscal 1999 acquisition of Hudson           Brothers, Inc.
Goodwill and indefinite lived intangible assets are no longer           amortized but are
reviewed annually, or more frequently if impairment indicators           arise, for
impairment. An impairment loss would be recorded if the recorded           goodwill
exceeds its implied fair value.

The
Company has only one operating segment, which is its sole reporting unit. Accordingly,
goodwill is tested for impairment at the entity level. Significant adverse industry or
economic changes, or other factors not anticipated could result in an impairment charge to
reduce recorded goodwill.

# ITEM  3.   QUANTATIVE AND
QUALITATIVE DISCLOSURES OF MARKET RISK

There
have been no material changes in the market risk reported in the Companys fiscal
2003 annual report on Form 10-K.

# ITEM 4.    CONTROLS  AND
 PROCEDURES

The
Companys Chief Executive Officer and Chief Financial Officer have concluded that the
Companys disclosure controls and procedures are effective based on their evaluation
of such controls and procedures as of the end of the period covered by this report. There
were no significant changes in internal controls or in other factors that significantly
affect internal controls subsequent to the date of their most recent evaluation.

14

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# PART II.   OTHER
INFORMATION

# ITEM  1.  LEGAL
PROCEEDINGS

On December 26, 2002, Cal-Maine Farms, Inc.(Cal-Maine Farms), a Delaware
corporation and a wholly owned subsidiary of the Company, was served with process in a
civil complaint filed in the Circuit Court of the First Judicial District of Hinds County,
Mississippi, on behalf of four plaintiffs, Hunter McWhorter, a minor, his two parents, and
Michael Green, an adult. In addition to Cal-Maine Farms, Fred Adams, Dolph Baker, Charlie
Collins, R. K. Looper and B. J. Raines, officers of the Company, are also named as
defendants. Six other named defendants include Cargill, Incorporated, Georges Farms,
Inc., Peterson Farms, Inc., Simmons Foods, Inc., Simmons Poultry Farms, Inc., and Tyson
Foods, Inc., each of which is engaged in the broiler business. Additional individual
defendants with affiliations to the other corporate defendants were also named.

The
suit alleges the original plaintiffs have suffered medical problems resulting from living
near land upon which litter from the flocks of hens owned by certain of the
defendants was spread as fertilizer. The suit specifically addresses conditions alleged to
exist in Washington County, Arkansas, where there is a relatively high concentration of
broiler farms. Cal-Maine Farms is not engaged in any broiler production and, compared to
the broiler producers, only has a very small portion of the hens located in Washington
County, Arkansas.

The
suit alleges actual damages in the amount of $55,000,000 and requests punitive damages in
the amount of $100,000,000. On December 31, 2002, an Amended Complaint was filed, bringing
the total number of plaintiffs to 93, of which 67 are alleged to be ill and three are
deceased. The damages sought were not amended.

On
November 7, 2003 an Order of Dismissal Without Predjudice was issued by the First Judicial
District of Hinds County, Mississippi.

On
December 5, 2003 the plaintiffs elected to appeal the order to the Mississippi Supreme
Court.

On
August 18, 2003, a complaint, styled H. David Schneider v. Cal-Maine Foods Inc., et
al. C.A. No. 20493-NC (the Schneider Action), was filed against the
Company and its directors in the Court of Chancery of the State of Delaware in and for New
Castle County.

The
suit seeks class action status and alleges the Company and its directors are attempting to
freeze out the Companys public shareholders in connection with the proposed going
private transaction announced by the Company on July 14, 2003, conflicts of interests,
self-dealing and lack of good faith dealing. The suit asks for a preliminary and permanent
injunction to enjoin the defendants from proceeding with the proposed going private
transaction, damages in the event the transaction is consummated, and an accounting to
class members for their damages.

On
August 25, 2003, a purported class action complaint was filed in the Court of Chancery of
the State of Delaware in and for New Castle County against the Company and its directors
styled Pyles v. Cal-Maine Foods, Inc., et al., C.A. No. 20507 (the Pyles
Action). The proposed class in the Pyles Action consists of all holders of the
Companys common stock other than the directors of the Company, their affiliates and
the Companys ESOP. The complaint in the Pyles Action generally alleges, among other
things, that the directors breached their fiduciary duties in approving the reverse stock
split, that the structure and timing of the reverse split is unfair to the holders of the
Companys common stock other than the directors of the Company and the participants
in the Companys ESOP and the price being paid for fractional shares in the reverse
split is unfair. The complaint in the Pyles Action seeks preliminary and permanent
injunctions to prevent consummation of the reverse stock split, rescission or rescissory
damages in the event the reverse stock split is consummated and damages as a result of the
alleged breaches of fiduciary duty. On August 26, 2003, the plaintiff in the Pyles Action
filed a motion for expedited proceedings, motion for preliminary injunction and served
discovery requests on the Company and its directors. As of the date of this report, the
Court of Chancery has not scheduled a date and time to hear the plaintiffs request
to expedite proceedings in the Pyles Action.

On
September 2, 2003, with the consent of the parties to each action the Court of Chancery
entered an order consolidating the Schneider Action with the Pyles Action into one
proceeding styled, In re Cal-Maine Foods, Inc. Stockholders Litigation, C.A. No.
20507 (the Consolidated Action). That same day, the Court of Chancery agreed
to hear plaintiffs motion for preliminary injunction on October 1, 2003. On or about
September 16, 2003, the parties to the Consolidated Action advised the Court that the
Court did not need to hear plaintiffs motion for preliminary injunction on October 1
as the date of the meeting to vote on the going private transaction had been delayed. The
parties are attempting to reschedule the date for the hearing on plaintiffs motion
for preliminary injunction in advance of the new date for the stockholders meeting
to vote on the going private transaction.

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On
September 25, 2003, a purported class action complaint was filed in the Court of Chancery
of the State of Delaware in and for New Castle County against the Company and its
directors styled Twin Valley Farms Exchange, Inc., Leon Eshelman, Valeria Eshelman,
Gary Eshelman, Pamela Fredricks, and Terry Bixler v. Cal-Maine Foods, Inc., et al.,
C.A. No. 20576-NC (the Twin Valley Farms Action). The proposed class in the
Twin Valley Farms Action consists of all holders of the Companys common stock other
than the directors of the Company, their affiliates and the Companys ESOP. All of
the directors of the Company are named as defendants in the Twin Valley Farms Action. The
complaint in the Twin Valley Farms Action generally alleges, among other things, that the
proposed reverse split is the product of unfair dealing by the directors of the Company
and that the price to be paid in lieu of fractional shares does not reflect the intrinsic
value of the Company nor does it constitute fair value pursuant to the General
Corporation Law of the State of Delaware.

On
September 25, 2003, the plaintiffs in the Twin Valley Farms Action also filed a motion to
consolidate the Twin Valley Farms Action with the Consolidated Action. By order dated
September 29, 2003, the Twin Valley Farms Action was consolidated with and into the
Consolidated Action. On November 6, 2003, the Companys Board of Directors voted to
terminate consideration of a going-private transaction. As a result of the Companys
actions the claims asserted in the Consolidated Action are moot

On
November 21,2003, plaintiffs filed an application for an award of attorneys fees and
expenses to be paid by the Company. On November 26, 2003, plaintiffs filed their opening
brief and other materials in support of their application. The Company and its directors
believe the application for attorneys fees and expenses is without merit and are
contesting it vigorously.

The
Schneider Action, Pyles Action and Twin Valley Farms Action were previously reported by
the Company in its Form 8-K current reports dated August 18, 2003, August 25, 2003 and
September 25, 2003, respectively

# ITEM  6.  EXHIBITS
AND REPORTS ON FORM 8-K

| | a. | Exhibits
| | -- | --------

| | No. | Description
| | --- | -----------

| | 31.1 | Certification
of The Chief Executive Officer
| | ---- | --------------------------------------------

| | 31.2 | Certification
of The Chief Financial Officer
| | ---- | --------------------------------------------

| | 32.0 | Written
Statement of The Chief Executive Officer and The Chief Financial Officer
| | ---- | --------------------------------------------------------------------------------

| | b. | Reports
on Form 8-K
| | -- | -------------------

The
following reports on Form 8-K were filed during the quarter for which this Form 10-Q is
filed:

| | (i) | Form
8-K dated September 25, 2003, reporting under Item 5  Other Events
               and Required FD Disclosure and under Item 7  Financial
Statements                and Exhibits that a class action suit styled Twin
Valley Farms                Exchange, Inc, Leon Eshelman,Valeria Eshelman, Gary
Eshelman, Pamela                Fredricks, aan Terry Bixler v. Cal-Maine Foods Inc., et
al., C.A. No.                20576-NC, was filed against the Company and its
directors in the Court of                Chancery of the State of Delaware in and for New
Castle County in connection                with the proposed going private transaction
announced by the Company on July 14,                2003.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (ii) | Form
8-K dated September 29, 2003, reporting under Item 12 Results of Operations and
Financial Condition, the issuance by the Company of a press release announcing its
financial results for the quarter ended August 30, 2003.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | Form
8-K dated November 6, 2003, reporting under Item 5 Other Events and
               Required FD Disclosure and under Item 7 Financial Statements
and                Exhibits, the issuance of a press release by the Company
announcing the                termination of its proposed going private transaction.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# 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.

|                      
|----------------------
|Date: January 12, 2004
|                      
|                      
|                      
|Date: January 12, 2004
|                      
|                      
|                      

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