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 February 28, 2004

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 Rule
 12b-2  under the  Exchange Act).

Yes   ____    No   X

Number
of shares outstanding of each of the issuers classes of common stock (exclusive of
treasury shares), as of March 31, 2004.

|Common Stock, $0.01 par value         | 10,904,697 shares
|------------------------------------- | -----------------
|Class A Common Stock, $0.01 par value | 1,200,000 shares 

---

# CAL-MAINE FOODS, INC.
AND SUBSIDIARIES

# INDEX

|Part I. |            | Financial Information                                   | PageNumber
|------- | ---------- | ------------------------------------------------------- | ----------
|        | Item 1.    | Condensed Consolidated Financial Statements (unaudited) |           
|        |            | Condensed Consolidated Balance Sheets -                
|        |            | February 28, 2004 and May 31, 2003                      | 3         
|        |            | Condensed Consolidated Statements of Operations -      
|        |            | 13 Weeks and 39 Weeks Ended                            
|        |            | February 28, 2004 and March 1, 2003                     | 4         
|        |            | Condensed Consolidated Statements of Cash Flows -      
|        |            | 39 Weeks Ended February 28, 2004 and                   
|        |            | March 1, 2003                                           | 5         
|        |            | Notes to Condensed Consolidated Financial Statements    | 6         
|        | Item 2.    | Management's Discussion and Analysis of                
|        |            | Financial Condition and Results of Operations           | 9         
|        | Item 3.    | Quantitative and Qualitative Disclosures of Market Risk | 15        
|        | Item 4.    | Controls and Procedures                                 | 16        
|Part II |            | Other Information                                      
|        | Item 1.    | Legal Proceedings                                       | 17        
|        | Item 6.    | Exhibits and Reports on Form 8-K                        | 18        
|        | Signatures |                                                         | 19        

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                                  
|Investments                                           
|Notes receivable                                      
|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            
|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-6,660,503 shares at          
|February 28, 2004 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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share amounts) UNAUDITED

|                             
|-----------------------------
|February 28, 2004            
|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                      
|                             
|Dividends per common share   
|                             
|Weighted average shares      
|outstanding:                 
|Basic                        
|                             
|Diluted                      
|                             

See notes to condensed consolidated
financial statements.

4

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# CAL-MAINE FOODS, INC.
AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) UNAUDITED

|                                                          
|----------------------------------------------------------
|February 28, 2004                                         
|Cash flows provided by 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) decrease 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                      
|Proceeds from exercise of stock options                   
|Payment of dividends                                      
|                                                          
|Net cash used in financing activities                     
|                                                          
|Net change  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) February 28, 2004

|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 nine-month
periods ended February 28, 2004 are not necessarily indicative of the results that may be
expected for the year ending May 29, 2004.

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
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 We account
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):

|                                   
|-----------------------------------
|Feb. 28, 2004                      
|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                  
|                                   

The fair value of our stock options
were estimated as of the date of the grant using a Black-Scholes option pricing model with
the following weighted-average assumptions for the prior year grants: risk-free interest
rate of 3.00% ; a dividend yield of 1.00%; expected volatility of 39.2%; and a weighted
average expected life of the options of 5 years.

6

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

Inventories
consisted of the following:

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

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

On
January 26, 2004, our Board of Directors called a special meeting of shareholders to be
held at our corporate offices on April 14, 2004 to vote on amendments to our Certificate
of Incorporation that would increase the authorized number of shares of our Common Stock
and Class A Common Stock and effect a two for one share split of our Common Stock and
Class A Common Stock. A proxy statement for the special meeting was mailed to our holders
of common stock on March 17, 2004.

|4. | Legal
Proceedings
|-- | -----------------

Please
refer to Part II, Item 1 of this report.

|5. | Impact
of Recently Issued Accounting Standards.
|-- | -----------------------------------------------

In
the first quarter of fiscal 2003, we 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 our
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. We have
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 these entities do not have recourse to us, except for one entity for which
we guarantee 50% of its debt. We are currently evaluating the effects of the issuance of
the Interpretation on the accounting for our investment in these entities. Currently,
these investments are recorded as investments on the equity method of accounting,
recording our share of the net income or loss. We have the ability to exercise
significant influence over operating and financial policies of these affiliated entities.
However, we do not have a controlling interest in the respective entities. At February
28, 2004, our aggregate net investment in these entities totaled $8.8 million. The
portion of the debt guaranteed was $6.8 million at February 28, 2004. These amounts
represent our maximum exposure to loss at February 28, 2004 as a result of our
involvement with these entities. We plan to adopt this Interpretation during the fourth
quarter.

7

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|6. | Earnings
Per Share
|-- | ------------------

Earnings
per share is computed using the weighted average number of common shares and common share
equivalents outstanding. Common share equivalents consist of stock options and are
calculated using the treasury stock method. For the 13 weeks and 39 weeks periods ended
February 28, 2004, the difference between diluted and basic weighted average shares
outstanding is solely related to the effects of stock options.

8

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

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 28 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 75% of the total number of shell eggs sold by us,
approximately 13% of such total shell egg production by us 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 25% of the total amount of
shell eggs sold by us are purchased from outside producers for resale, as needed, by us.

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 55% 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, over which we have little or no control.

Currently,
prices for corn and soybeans, essential feed ingredients, are considerably higher than
they have been in the past few months and they are projected to be higher in the year
ahead.  If these prices continue to rise, this would result in higher feed
ingredient cost to us and other shell egg producers.  In anticipation of higher
ingredient prices, in mid- January 2004, we purchased approximately 90% of our estimated
soybean meal requirements through September 2004.  We can provide no assurances as to the
prices we will be required to pay for corn or soybean ingredients in the future.

According
to U.S. Department of Agriculture reports, laying hen numbers during February 2004 were
unchanged as compared to a year ago. Current industry projections are that, for the year
ahead, laying hen numbers will be very close to this past year.

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.

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 Form 10-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. We believe the critical accounting policies that most impact our
consolidated financial statements are described below.

9

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Allowance for Doubtful Accounts. In the normal course of business, we extend credit to our customers on a short-term
basis. Although we consider credit risks associated with our customers as minimal, we
routinely review our accounts receivable balances and make provisions for probable
doubtful accounts. In circumstances where management is aware of a specific
customers inability to meet its financial obligations to us (e.g. bankruptcy
filings), a specific reserve is recorded to reduce the receivable to the amount expected
to be collected. For all other customers, we recognize 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 values. If market           prices for eggs
and feed grains move substantially lower, we 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-downs in 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
assets 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 of the assets would result in changes to depreciation expense.

We
continually re-evaluate the carrying value of our long-lived assets, for events or changes
in circumstances, which indicate that the carrying value may not be recoverable. As part
of this reevaluation, we estimate 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. We
have invested in other companies engaged in the production, processing and distribution of
shell eggs and egg products. Our 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 our financial statements. Changes in the
ownership percentages of these investments might alter the accounting methods currently
used. We are a guarantor of approximately $6.8 million of long-term debt of one of these
affiliates.

Income Taxes.We determine our
effective tax rate by estimating our permanent differences resultingfrom
differingtreatment of items for tax and accounting purposes. We are periodically
audited by taxing authorities. Any audit adjustments affecting permanent differences could
have an impact on our effective tax rate.

10

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RESULTS OF OPERATIONS

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

|                                 
|---------------------------------
|February 28, 2004                
|Net sales                        
|Cost of sales                    
|                                 
|Gross profit                     
|Selling, general & administrative
|                                 
|Operating income                 
|Other income (expense)           
|                                 
|Income before taxes              
|Income tax expense               
|                                 
|Net income                       
|                                 

NET
SALES

Approximately
96% of our net sales consist of shell egg sales. Approximately 3% of our net sales include
incidental feed sales to outside egg producers, with the 1% balance consisting of other
farming activities.

Net
sales for the third quarter of fiscal 2004 were $165.7 million, an increase of $58.9
million, or 55.1% as compared to net sales of $106.8 million for the third quarter of
fiscal 2003. This increase was due to increases in total dozens of shell eggs sold as well
as increases in shell egg selling prices compared with the same period last year. Dozens
of shell eggs sold for the current third quarter were 154.7 million dozen, an increase of
7.9 million dozen, or 5.4% as compared to the third quarter of last year. Our production
and processing facilities provided almost half of the increase in dozens of shell eggs
sold, with additional dozens purchased from outside (non-contract) shell egg producers
making up the balance. Purchases of shell eggs from outside producers averages about 25%
of our total dozens sold. Consumer demand was good and shell egg supply was level, both of
which market factors resulted in higher shell egg selling prices during the current third
quarter. Our net average selling price per dozen of shell eggs for the third quarter of
fiscal 2004 was $1.035, compared to $.693 for the third quarter of fiscal 2003, an
increase of 49.4%. Our net average selling price is the blended price for all sizes and
grades of shell eggs, including non-graded shell egg sales, breaking stock and
undergrades.

Net
sales for the 39 weeks ended February 28, 2004 were $430.0 million, an increase of $146.0
million, or 51.4%, as compared to net sales of $284.0 million for the 39 weeks ended
March 1, 2003. Total dozens of shell eggs sold and net shell egg selling prices in the
current 39 week period increased as compared to the same period in fiscal 2003. Dozens of
shell eggs sold for the current 39 week period were 455.3 million as compared to 427.7
million for the same period in fiscal 2003, an increase of 6.5%. For the current 39 week
period, our net average selling price per dozen of shell eggs was $.911, as compared to
$.631 per dozen for the same period in fiscal 2003, an increase of 44.4%.

We
believe our financial results for recent periods have been positively affected by
increased demand, primarily caused by favorable publicity about eggs from the medical
community, increased use of eggs in high protein diets that are currently popular and a
level egg supply within the industry. Also, the average size of our layer flock has
increased from approximately 20.5 million hens at March 1, 2003 to approximately 21.0
million at February 28, 2004.

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.

11

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Cost
of sales for the third quarter ended February 28, 2004 was $107.9 million, an increase of
$25.9 million, or 31.6%, as compared to cost of sales of $82.0 million for the third
quarter of fiscal 2003. The increase is due to higher cost of purchases from outside egg
producers and higher cost of feed ingredients. During the third quarter of fiscal 2003, we
recognized $4.1 million as a reduction in cost of sales for our share of the settlement of
certain class action feed ingredient lawsuits. Dozens of shell eggs sold during the third
quarter ended February 28, 2004 increased 5.4%. These additional dozens of shell eggs sold
were provided by an almost equal increase in the number of dozens of shell eggs produced
by us and in the number of dozens of shell eggs purchased from outside egg producers. The
sharp increase in the cost of the shell eggs purchased from outside producers was due to
stronger shell egg market conditions, as indicated by our 49.4% increase in shell egg
selling prices for the third quarter of fiscal 2004. Feed cost for the third quarter ended
February 28, 2004 was $.244 per dozen of shell eggs, compared to the third quarter of
fiscal 2003 cost per dozen of shell eggs of $.218, an increase of 11.9%. The higher shell
egg selling prices was the primary reason for the increase in gross profit from 23.2% of
net sales for the quarter ended March 1, 2003 to 34.9% of net sales for the third quarter
ended February 28, 2004.

Cost
of sales for the 39 weeks ended February 28, 2004 was $294.7 million, an increase of
$60.9 million, or 26.0%, as compared to cost of sales of $233.8 million for the 39 weeks
ended March 1, 2003. The increase in cost of sales is the result of higher outside shell
egg purchase cost and an increase in the cost of feed. During the first 39 weeks of
fiscal 2003, we recognized $7.0 million as a reduction in cost of sales for our share of
the settlement of certain class action feed ingredient lawsuits. Feed cost for the
current 39 week period was $.225 per dozen of shell eggs, as compared to $.211 per dozen
for the same period in the prior fiscal year, an increase of 6.6%. The increase in shell
egg selling prices was the primary reason for the increase in gross profit from 17.7% of
net sales for last years 39 week period as compared to a gross profit of 31.4% of
net sales for the current 39 week period. Gross profits also improved because of greater
operational efficiencies and a lower layer flock mortality rate.

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 third quarter ended February 28, 2004 was $21.3
million, an increase of $9.7 million, as compared to $11.6 million for the third quarter
of fiscal 2003. In the current third quarter, we recorded an expense for stock
compensation in the amount of $9.5 million in connection with certain stock options and
the related tandem stock appreciation rights. The charge is in accordance with our
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 expense is directly related to the
increase in the market price of our outstanding common stock from $21.10 at November 30,
2003 to $37.48 at February 28, 2004. The portion of the expense related to the stock
options, $4.6 million, is non-cash and the corresponding liability will be converted to
equity at the time of exercise. At February 28, 2004, options for 303,000 shares and
related tandem stock appreciation rights remain unexercised, of which 258,000 are not
available for exercise until December 13, 2004 or later. Future charges to earnings for
these options and rights will correlate to changes in our stock price as the options are
marked to market value. For the third quarter ended March 1, 2003, we recorded an expense
of $186,500 for stock compensation. Excluding the $9.5 million expense for stock options
and related tandem stock appreciation rights, the current third quarter comparable
increase for selling, general and administrative expense was $200,000, mostly due to
increases in legal and professional fees relating to our going private transaction. On a
cost per dozen sold basis, excluding the $9.5 million stock option expense, selling,
general and administrative expense was $.076 per dozen for the third quarter of fiscal
2004 as compared to $.079 for the third quarter of fiscal 2003. As a percent of net sales,
selling, general and administrative expense increased from 10.9% for the third quarter of
fiscal 2003 to 12.9% for the third quarter of fiscal 2004.

Selling,
general and administrative expenses for the 39 weeks ended February 28, 2004 was $57.8
million, an increase of $25.3 million, as compared to $32.5 million for the 39 weeks ended
March 1, 2003. For the current 39 week period, we recorded an expense of $24.1 million for
stock compensation due to the increase in the market price of our outstanding common
stock from $5.24 at May 31, 2003 to $37.48 at February 28, 2004, as compared to an
expense of $186,500 for the 39 weeks ended March 1, 2003.Excluding the $24.1 million
expense stock option expense, the current 39 week period increase for selling, general and
administrative expense was $1.2 million, or 3.7%. Of the $1.2 million increase,
approximately $1.7 million was for increases in legal and professional fees, primarily
related to our going private transaction that was terminated in November 2003, offset by
reductions in costs of delivery and general administrative expenses. On a cost per dozen
sold basis, excluding the $24.1 million stock option expense, selling, general and
administrative expense was $.074 for the current 39 week period as compared to $.076 for
the comparable period in fiscal 2003. As a percent of net sales, selling, general and
administrative expense has increased from 11.4% for the first 39 week period of fiscal
2003 to 13.4% for the first 39 week period of fiscal 2004.

12

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OPERATING
INCOME

As
the result of the above, operating income was $36.4 million for the third quarter ended
February 28, 2004, as compared to operating income of $13.2 million for the third quarter
of fiscal 2003. Operating income was 22.0% of net sales for the current fiscal third
quarter, compared to operating income of 12.3% of net sales for the third quarter in
fiscal 2003.

For
the 39 week period ended February 28, 2004, operating income was $77.5 million, as
compared to operating income of $17.8 million for the 39 week period ended March 1, 2003.
Operating income was 18.0% of net sales for the current 39 week period as compared to
operating income of 6.3% of net sales in the same 39 week period in fiscal 2003.

OTHER
INCOME / EXPENSE

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

Other
income for the third quarter ended February 28, 2004 was $856,000, an increase of $2.1
million, as compared to other expense of $1.2 million for the third quarter of fiscal
2003. In the current third quarter, net interest expense decreased $967,000 and other
income increased $1.1 million. Net interest expense decreased as the result of reduced
long term debt balances and receipt of $944,000 interest income as part of an income tax
refund. As compared to March 1, 2003 long term debt and notes payable balances have been
reduced by $27.3 million through February 28, 2004. Other income for the current third
quarter increased from equity in income of affiliates. As a percent of net sales, other
income was 0.5% for the current third quarter, as compared to other expense of 1.1% for
the same period in fiscal 2003.

For
the 39 week period ended February 28, 2004, other expense was $459,000, a decrease of $4.9
million as compared to $5.4 million for the same 39 week period in fiscal 2003. For the
current period, net interest expense decreased $1.2 million and other income increased
$3.7 million. Net interest expense decreased as the result of reduced long term debt
balances and receipt of $944,000 interest income as part of an income tax refund. Other
income for the current 39 week period increased from equity in income of affiliates. As a
percent of net sales, other expense was 0.1% for the current 39 week period, as compared
to 1.9% for the same 39 week period in fiscal 2003.

INCOME
TAXES

As
a result of the above, our pre-tax income was $37.3 million for the third quarter ended
February 28, 2004, as compared to pre-tax income of $11.9 million for the third quarter of
fiscal 2003. For the current third quarter, an income tax expense of $13.4 million was
recorded with an effective tax rate of 36.0%, as compared to an income tax expense of $4.3
million with an effective rate of 36.3% for last years third quarter.

For
the 39 week period ended February 28, 2004, our pre-tax income was $77.0 million, as
compared to pre-tax income of $12.4 million for the 39 week period ended March 1, 2003.
For the current 39 week period, an income tax expense of $27.8 million was recorded with
an effective tax rate of 36.0%, as compared to an income tax expense of $4.5 million with
an effective tax rate of 36.3% for the same 39 week period in fiscal 2003.

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NET
INCOME

Net
income for the third quarter ended February 28, 2004 was $23.9 million, or $1.98 per basic
share, $1.96 per diluted share, as compared to net income of $7.6 million, or $.65 per
basic share, $.64 diluted share, for the third quarter of fiscal 2003.

For
the 39 week period ended February 28, 2004, net income was $49.2 million, or $4.15 per
basic share, $4.06 per diluted share, as compared to net income of $7.9 million, or $.67
per basic and diluted share for the 39 week period ended March 1, 2003.

CAPITAL
RESOURCES AND LIQUIDITY

Our
working capital at February 28, 2004 was $73.3 million, as compared to $27.7 million at
May 31, 2003. Our current ratio was 2.11 at February 28, 2004, as compared to 1.48 at May
31, 2003. Our need for working capital generally is highest in the first and second fiscal
quarters ending in August and November. During the first quarter shell egg prices are
normally at seasonal lows. In the second quarter, we usually build inventories and
receivable balances in anticipation of the holiday season. Seasonal borrowing needs
frequently are higher during these periods than during other fiscal periods. We have a $35
million line of credit with three banks, none of which was utilized at February 28, 2004.
Our long-term debt at that date, including current maturities, totaled $91.5 million, as
compared to $108.2 million at May 31, 2003.

For
the 39 week period ended February 28, 2004, $66.7 million in net cash was provided by
operating activities. This compares to $14.5 million of net cash for the 39 week period
ended March 1, 2003. In the current 39 week period, $5.6 million was used for purchases of
property, plant and equipment, $461,000 was received from sales of property, plant and
equipment, and $2.0 million was used for construction projects. Net cash of $1.5 million
was used in notes receivable and investments. Approximately $8.1 million was received from
the exercise of stock options, and $445,000 was used for payments of dividends on our
common stock. Borrowings of $5.0 million were received in additional long-term debt and
$20.0 million was received in restructuring and re-pricing certain other long-term debt.
Payments of $41.8 million were made on long-term debt. The net result was an increase in
cash of approximately $49.0 million.

For
the first 39 weeks of fiscal 2003, $3.8 million was used for purchases of property, plant
and equipment, $482,000 was received from sales of property, plant and equipment, and $6.1
million was used for construction projects. Net cash of $186,000 was provided by notes
receivable and investments. Approximately $440,000 was used for payments of dividends on
our common stock. Proceeds of $1.5 million were received from net borrowings on notes
payable to banks. Payments of $8.1 million were made on long-term debt. The net result was
a decrease in cash of approximately $1.8 million.

Substantially
all trade receivables and inventories collateralize our 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 $55.0 million tangible net worth); (2) limit dividends to
an aggregate amount not to exceed $500,000 per quarter (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 February 28,
2004, we are 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 of a change in the control of the Company.

During
2004, we completed construction, which began in fiscal 2001, of a shell egg production and
processing facility in Guthrie, Kentucky. Including this construction project, we project
capital expenditures of an aggregate of $11.0 million during fiscal 2004.

We
currently have a $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 this liability will be payable over the 20 years beginning in
fiscal 1999 or 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 $2.5 million deferred tax
liability would also reduce our cash, but 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.

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Impact
of Recently Issued Accounting Standards.In the first quarter of fiscal
2003, we 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 our 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. We have
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 us, except for one entity for which we
guarantee 50% of its debt. We are 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 our
share of the net income or loss. We have the ability to exercise significant influence
over operating and financial policies of these affiliated entities. However, we do not
have a controlling interest in the respective entities. At February 28, 2004, our
aggregate net investment in these entities totaled $8.8 million. The portion of the debt
guaranteed was $6.8 million at February 28, 2004. These amounts represent our maximum
exposure to loss at February 28, 2004 as a result of our involvement with these entities.
We plan to adopt this Interpretation during the fourth quarter.

Forward
Looking Statements. The foregoing statements contain forward-looking
statements that involve risks and uncertainties and our 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 our
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. We assume no obligation to update forward-looking statements. See also our 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.Our future operating results may be affected
by various trends and factors that are beyond our 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, our prior performance should not be
presumed to be an accurate indication of future performance.

ITEM 3.  QUANTATIVE AND
QUALITATIVE DISCLOSURES OF MARKET RISK

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

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ITEM 4.  CONTROLS  AND
 PROCEDURES

Our
Chief Executive Officer and Chief Financial Officer have concluded that our 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 that occurred during the period covered by this report.

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# PART II.    OTHER
INFORMATION

# ITEM 1.    LEGAL PROCEEDINGS

Washington County
Litigation

On December 26, 2002, Cal-Maine Farms, Inc. (Cal-Maine Farms), a Delaware
corporation wholly owned by us, 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
plaintiffs, Hunter McWhorter, his two parents, and Michael Green. In addition to Cal-Maine
Farms, Fred Adams, Dolph Baker, Charlie Collins, R. K. Looper and B. J. Raines, officers
of the company, are so named as defendants. Other 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. Individual defendants affiliated with the other corporate defendants
also were named.

The
suit alleges that plaintiffs suffered medical problems 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, has a very small portion of the hens located in Washington County. 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
number of plaintiffs to 93.

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 February 3, 2004, Cal-Maine Farms was served with process in a civil complaint
filed in the Circuit Court of Washington, Arkansas, on behalf of Keith McWhorter and Patsy
McWhorter, individually and as Next Friends and Guardians of Hunter McWhorter, a plaintiff
in the action described above. Other defendants include Alpharma Inc, Alpharma Animal
Health Co. 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, and an individual.

The
suit also alleges that the plaintiffs have suffered medical problems resulting from living
near land upon which litter from the defendants flocks was spread as
fertilizer. This suit focuses on a feed ingredient that contains arsenic and is alleged to
be in the litter that was spread. This particular feed ingredient is not used in Cal-Maine
Farms shell egg production feed formulation. The suit, like the suit described
above, also addresses conditions alleged to exist in Washington County. The suit seeks
unspecified actual damages and requests unspecified punitive damages. An answer has been
filed on behalf of Cal-Maine Farms and no discovery has taken place. At this time, it is
impossible to evaluate the potential exposure, if any, of Cal-Maine Farms to damages in
this suit.

Going Private Litigation

On
August 18, 2003, we announced that our Board of Directors had approved a 2,500 to 1
reverse stock split, subject to stockholder approval, in order to effect a going private
transaction.  In response to this announcement, several lawsuits seeking to
enjoin consummation of the proposed reverse split were filed in the Court of Chancery in
and for the State of Delaware which were consolidated into one action styled In re
Cal-Maine Foods, Inc. Stockholders Litigation, C.A. No. 20507 (the Delaware
Action).  Our announcement on November 6, 2003, that we did not intend to
proceed with the proposed reverse split transaction mooted the claims brought in the
Delaware Action.  On November 21, 2003, plaintiffs in the Delaware Action filed a
motion for an award of attorneys fees and expenses.  On January 27, 2003,
the Court of Chancery awarded plaintiffs $831,617.23 in attorneys fees and
expenses.  On February 20, 2003, we appealed the Court of Chancerys
decision to award plaintiffs attorneys fees and expenses to the Supreme Court
of Delaware.  Briefing of the appeal should be concluded by the end of May and the
Company expects a resolution of the appeal some time thereafter, but at this time we
cannot predict the outcome.

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# 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 report on Form 8-K was filed during the quarter for which this Form 10-Q is
filed:

| | (i) | Form
8-K dated December 22, 2003, reporting under Item 7 Financial
               Statements and Exhibits, and 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
November 29, 2003.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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.

|                     | CAL-MAINE FOODS, INC.         
|-------------------- | ------------------------------
|                     | (Registrant)                  
|Date:  April 9, 2004 | /s/ Bobby J. Raines           
|                     | Bobby J. Raines               
|                     | Vice President/Treasurer      
|                     | (Principal Financial Officer) 
|Date: April 9, 2004  | /s/ Charles F. Collins        
|                     | Charles F. Collins            
|                     | Vice President/Controller     
|                     | (Principal Accounting Officer)

19