UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-K


[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

      FOR FISCAL YEAR ENDED MAY 29, 1999

[ ]   TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934

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)

Securities registered pursuant to Section 12 (b) of the Act:  NONE

Securities  registered  pursuant to Section 12 (g) of the Act:  Common  Stock,
$0.01 par value

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein,  and will not be contained,  to the
best of registrant's  knowledge, in definitive proxy or information statements
incorporated  by reference  in Part III of this Form 10-K or any  amendment to
this Form 10-K. (X)

As of July 24, 1999, 11,212,988 shares of the registrant's Common Stock, $0.01
par value,  and  1,200,000  shares of the  registrant's  Class A Common Stock,
$0.01 par value,  were  outstanding.  The aggregate market value of the common
stock held by  non-affiliates  of the registrant on that date was $15,660,465,
computed  at the  closing  price  on that  date as  reported  by the  National
Association of Securities Dealers Automated Quotation System.

                      DOCUMENTS INCORPORATED BY REFERENCE
Pursuant to General  Instruction  G(3), the responses to Items, 10, 11, 12 and
13 of Part III of this  report are  incorporated  herein by  reference  to the
information  contained in the  Company's  Proxy  Statement for its 1999 Annual
Meeting of  Shareholders  to be held on October 11, 1999, to be filed with the
Securities and Exchange Commission on or about September 6, 1999.


<PAGE>

                                    PART I

ITEM 1.     BUSINESS

      GENERAL

      Cal-Maine Foods, Inc. ("Cal-Maine" or the "Company") was incorporated in
Delaware in 1969. The Company's primary business is the production,  cleaning,
grading,  and  packaging of fresh shell eggs for sale to shell egg  retailers.
Shell egg sales, including feed sales to outside egg producers,  accounted for
approximately  98% of the  Company's  net sales in fiscal  1999.  Egg products
operations, which accounted for approximately 4% of the Company's net sales in
fiscal 1998,  were  discontinued  in May 1998.  Currently,  the Company is the
largest  producer and distributor of fresh shell eggs in the United States and
during fiscal 1999, had sales of  approximately  426 million dozen shell eggs.
This  volume  represents  approximately  10.5% of all  shell  eggs sold in the
United  States.  The Company  markets  the  majority of its eggs in 26 states,
primarily  in the  Southwestern,  Southeastern,  Midwestern  and  Mid-Atlantic
regions of the United States.  The Company's  principal  executive offices are
located at 3320 Woodrow Wilson Avenue,  Jackson,  Mississippi  39209,  and its
telephone  number  is  601-948-6813.  Except  as  otherwise  indicated  by the
context,  references  herein  to the  "Company"  or  "Cal-Maine"  include  all
subsidiaries of the Company.

      GROWTH STRATEGY AND ACQUISITIONS

      The  Company  pursues  an  aggressive  growth  strategy,  including  the
acquisition of existing shell egg  production  and processing  facilities,  as
well as the  construction  of new and more  efficient  facilities.  Since  the
beginning  of fiscal  1989,  the Company has  consummated  nine  acquisitions,
adding an aggregate of 17.1 million layers to its capacity, and built five new
"in-line"  shell egg  production  and  processing  facilities  and one  pullet
growing facility, adding 5.0 million layers and 1.2 million growing pullets to
its  capacity.  Each of the new  shell  egg  production  facilities  generally
provides for the processing of approximately 300 cases of shell eggs per hour.
These  increases in capacity have been  accompanied by the retirement of older
and less  efficient  facilities  and a reduction in eggs  produced by contract
producers.  The new "in-line"  facilities  result in the gathering,  cleaning,
grading and packaging of shell eggs by less  labor-intensive,  more efficient,
mechanical means.

      As a result of the Company's growth strategy, the Company's total flock,
including pullets,  layers and breeders,  has increased from approximately 6.8
million at May 28, 1988 to an average of  approximately  18.2 million for each
of the past five fiscal years.  Also,  the number of dozens of shell eggs sold
has increased from  approximately 117 million in the fiscal year ended May 28,
1988 to an average  of  approximately  407  million  for the past five  fiscal
years.  Net sales  amounted to $288.0  million in fiscal 1999,  more than four
times net sales of $69.9 million in fiscal 1988.

      The  Company's  acquisitions  and  construction  of  larger  facilities,
described in the tables below,  reflect the continuing  concentration of shell
egg  production  in the  United  States  in a  decreasing  number of shell egg
producers.  The Company  believes that a  continuation  of that  concentration
trend may  result in the  reduced  cyclicality  of shell  egg  prices,  but no
assurance can be given in that regard.


                                      2

<PAGE>

           ACQUISITIONS OF EGG PRODUCTION AND PROCESSING FACILITIES

<TABLE>
<CAPTION>
                                                                              Layers          Purchase
 Fiscal Year(1)     Seller                                 Location          Acquired          Price
 --------------     ------                                 --------          --------         --------
<S>                 <C>                                 <C>                 <C>           <C>
     1989           Egg City, Inc.                         Arkansas         1,300,000     $  6,716,000
     1990           Sunny Fresh Foods, Inc.                  (2)            7,500,000       21,629,000
     1991           Sunnyside Eggs, Inc.                North Carolina      1,800,000        6,000,000
     1994           Wayne Detling Farms                     Ohio            1,500,000       12,194,000
     1995           A & G Farms (3)                        Kentucky         1,000,000        2,883,000
     1997           Sunbest Farms                          Arkansas           600,000        1,302,000
     1997           Southern Empire Egg Farm, Inc.         Georgia          1,300,000       10,654,000
     1998           J&S Farms / Savannah Valley Egg        Georgia            900,000        3,745,000
     1999           Hudson Brothers, Inc.                  Kentucky         1,200,000       12,161,000
                                                                           ----------------------------
                      Total                                                17,100,000     $ 77,284,000
<FN>
(1)   The Company's fiscal year ends on the Saturday closest to May 31.

(2)   New  Mexico,  Kansas,  Texas,  Alabama,  Oklahoma,  Arkansas  and  North
      Carolina

(3)   In connection with the purchase,  the Company leased  substantially  all
      facilities  and certain  equipment  of the  business  under an operating
      lease with monthly rentals of $79,000.
</FN>
</TABLE>

  CONSTRUCTION OF EGG PRODUCTION, PULLET GROWING AND PROCESSING FACILITIES(1)

<TABLE>
<CAPTION>
 Fiscal Year                            Layer         Pullet       Approximate
  Completed       Location            Capacity       Capacity         Cost
 -----------      --------            --------       --------      -----------
<S>              <C>                  <C>             <C>         <C>
    1990         Mississippi          1,000,000       200,000     $ 10,000,000
    1992         Louisiana            1,000,000            --       10,000,000
    1992         Mississippi                 --       500,000        3,500,000
    1994         Mississippi          1,000,000            --        9,200,000
    1996         Texas                1,000,000       250,000       14,000,000
    1999         Kansas               1,250,000       250,000       21,500,000
                                     ------------------------------------------
                   Total              5,000,000     1,200,000     $ 68,200,000
                                     ==========================================
<FN>
      (1)   Does not include  construction  in Waelder,  Texas,  commenced  in
fiscal  1998,  and to be  completed  in fiscal  2000 at an  estimated  cost of
approximately $18.7 million,  adding approximately 1,300,000 layer and 300,000
pullet capacity.
</FN>
</TABLE>

      The  Company  proposes  to  continue a growth  strategy  calling for the
acquisition  of other  companies  engaged in the  production and sale of shell
eggs. Federal anti-trust laws require regulatory approval of acquisitions that
exceed certain threshold levels of significance.  Also, the Company is subject
to federal  and state laws  generally  prohibiting  anti-competitive  conduct.
Because the shell egg production and  distribution  industry is so fragmented,
the Company  believes that its sales of shell eggs during its last fiscal year
represented  only  approximately  10.5% of domestic egg sales  notwithstanding
that it is the largest  producer and  distributor  of shell eggs in the United
States based on independently prepared industry statistics.  Accordingly,  the
Company believes that regulatory approval of any future acquisitions generally
will not be required and, if required, that such approvals will be obtained.

      The  construction  of new,  more  efficient  production  and  processing
facilities  is an integral  part of the Company's  growth  strategy.  Any such
construction can be expected to require compliance with environmental laws and
regulations,  including  the  receipt of permits,  that could  cause  schedule
delays, although the Company has not experienced any significant delays in the
past.


                                      3

<PAGE>

      SHELL EGGS

      PRODUCTION.  The  Company's  operations  are  fully  integrated.  At its
facilities,  it hatches chicks, grows pullets,  manufactures feed and produces
and   distributes   shell  eggs.   Company-owned   facilities   accounted  for
approximately  70% of its total fiscal 1999 egg  production,  with the balance
attributable to contract producers used by the Company.

      Under Cal-Maine's  arrangements with its contract producers, the Company
owns the entire flock,  furnishes  all feed and supplies,  owns the shell eggs
produced,  and assumes all market  risks.  The  contract  producers  own their
facilities  and  are  paid a fee  based  on  production  with  incentives  for
performance.

      The commercial production of shell eggs requires a source of baby chicks
for laying flock  replacement.  The Company produces  approximately 98% of its
chicks in its own hatcheries and obtains the balance from commercial  sources.
Feed for the laying  flocks is produced by  Company-owned  and operated  mills
located in Alabama, Arkansas, Georgia, Louisiana,  Mississippi,  Missouri, New
Mexico, North Carolina, Ohio, Oklahoma, South Carolina,  Tennessee, and Texas.
All  ingredients  necessary for feed  production are readily  available in the
open  market  and most are  purchased  centrally  from  Jackson,  Mississippi.
Approximately 95% of the feed for Company flocks is manufactured at feed mills
owned and operated by the Company. Poultry feed is formulated using a computer
model to determine the least-cost  ration to meet the nutritional needs of the
flocks.  Although most feed  ingredients are purchased on an as-needed  basis,
from time-to-time, when deemed advantageous, the Company purchases ingredients
in advance with a delayed delivery of several weeks.

      Feed cost  represents  the  largest  element of the  Company's  farm egg
production cost, ranging from 55% to 64% of total cost in the last five years,
or an average of  approximately  60%.  Although feed ingredients are available
from a number of sources,  the Company has little,  if any,  control  over the
prices of the  ingredients it purchases,  which are affected by weather and by
various supply and demand factors.  Increases in feed costs not accompanied by
increases in the selling price of eggs can have a material  adverse  effect on
the  results  of the  Company's  operations.  However,  higher  feed costs may
encourage  producers to reduce  production,  possibly  resulting in higher egg
prices.  Alternatively,  low feed costs can encourage industry overproduction,
possibly resulting in lower egg prices.  Historically,  the Company has tended
to have higher profit  margins when feed costs are higher.  However,  this may
not be the case in the future.

      After the eggs are  produced,  they are cleaned,  graded,  and packaged.
Substantially all of the Company-owned farms have modern "in-line"  facilities
that  mechanically  gather,  clean,  grade and package the eggs produced.  The
increased use of in-line facilities has generated  significant cost savings as
compared to the cost of eggs produced from non-in-line facilities. In addition
to greater  efficiency,  the in-line facilities produce a higher percentage of
grade A eggs,  which sell at higher  prices.  Eggs  produced on farms owned by
contractors  are brought to the  Company's  processing  plants  where they are
cleaned,  graded and packaged. A small percentage of eggs are sold unprocessed
to other processors.

      The Company's egg production  activities are subject to risks,  inherent
in the agriculture  industry,  such as weather conditions and disease factors.
These  risks are not within the  Company's  control  and could have a material
adverse effect on its  operations.  Also, the  marketability  of the Company's
shell eggs is subject to risks such as  possible  changes in food  consumption
opinions and practices reflecting perceived health concerns.

      The Company  operates in a cyclical  industry  with total demand that is
generally level and a product which is price-inelastic.  Thus, small increases
in production or decreases in demand can have a large adverse effect on prices
and vice-versa.  However, economic conditions in the egg industry are expected
to exhibit less cyclicality in the future.  The industry is concentrating into
fewer but stronger hands, which should help lessen the extreme  cyclicality of
the past. New practices,  such as more efficient molting programs, should help
contribute to profitability.

      MARKETING.  Of the 425.2 million dozen shell eggs sold by the Company in
the fiscal  year ended May 29,  1999,  315  million  were  produced by company
flocks.


                                      4

<PAGE>

      Sales  of  shell  eggs  primarily  are  made to  national  and  regional
supermarket  chains that buy direct from the Company.  During  fiscal 1999, no
customer  accounted  for more than 10% of net sales,  and the top 10 customers
accounted  for less than 50% of net sales in the  aggregate.  The  majority of
eggs sold are  merchandised  on a daily or  short-term  basis.  Most  sales to
established  accounts are on open account with terms  ranging from seven to 30
days. Although the Company has established  long-term  relationships with many
of its customers, they are free to acquire shell eggs from other sources.

      The  Company  sells  its  shell  eggs at  prices  generally  related  to
independently quoted wholesale market prices.  Wholesale prices are subject to
wide  fluctuations.  The prices of its shell eggs reflect  fluctuations in the
quoted  market,  and the results of the  Company's  shell egg  operations  are
materially  affected  by changes in market  quotations.  Egg prices  reflect a
number of  economic  conditions,  such as the  supply of eggs and the level of
demand, which, in turn, are influenced by a number of factors that the Company
cannot  control.  No  representation  can be made as to the  future  level  of
prices.

      Shell eggs are perishable.  Consequently, the Company maintains very low
shell  egg  inventories,  usually  consisting  of  approximately  four days of
production. Retail sales of shell eggs are greatest during the fall and winter
months and lowest during the summer months. Prices for shell eggs fluctuate in
response to seasonal  demand factors and a natural  increase in egg production
during the spring and early summer.  The Company  generally  experiences lower
sales and net  income,  and  often  losses,  in its  fourth  and first  fiscal
quarters ending in May and August, respectively.

      The annual per  capita  consumption  of shell eggs since 1990 has ranged
from 234 to 245, averaging 238. While the Company believes that increased fast
food  restaurant  consumption,  reduced egg  cholesterol  levels and  industry
advertising  campaigns may result in a continuance of the recent  increases in
current per capita egg consumption  levels, no assurance can be given that per
capita consumption will not decline in the future.

      The Company  sells the  majority of its shell eggs in  approximately  26
states,  ranging across the southwest,  southeast,  mid-west and  mid-Atlantic
regions of the United States.  Cal-Maine is a major factor in egg marketing in
a majority of these  states.  Many states in  Cal-Maine's  market area are egg
deficit  regions;  that is,  production of fresh shell eggs is less than total
consumption.  Competition  from other  producers  in specific  market areas is
generally based on price, service, and quality of product.  Strong competitors
of Cal-Maine exist in each of the Company's markets.

      EGG   PRODUCTS.   On  March  30,  1998,   the  Company   announced   the
discontinuance  of its production of egg products,  which ceased in May, prior
to the end of the 1998 fiscal year. Egg products  accounted for  approximately
4% of the Company's net sales in fiscal year 1998.

      SPECIALTY  EGGS.  The  Company  also  produces  specialty  eggs  such as
Egg*land's Best(TM) and Farmhouse eggs.  Egg*land's Best(TM) eggs are patented
eggs that are believed by its  developers,  based on  scientific  studies,  to
cause no increase in serum  cholesterol  when eaten as part of a low fat diet.
Cal-Maine produces and processes  Egg*land's Best(TM) eggs, under license from
Egg*land's Best, Inc. ("EB"), at its existing facilities, under EB guidelines.
The product is marketed to the  Company's  established  base of  customers  at
prices that reflect a premium over ordinary shell eggs.  Egg*land's  Best(TM)
eggs  accounted  for  approximately  4.3% of the Company's net sales in fiscal
1999.  "FARMHOUSE" brand eggs are produced at Company  facilities by hens that
are not caged,  and are provided with a diet of natural  grains and drinking
water that is free of  hormones or other  chemical  additives.  Farmhouse  eggs
account  for just under 1% of net sales.  They are intended to meet the demands
of consumers who are sensitive to environmental and animal welfare issues.

      LIVESTOCK.  The Company's livestock  operations currently consist of the
operation of a 1,440 head dairy facility,  from which milk sales are made to a
major milk  processor.  Milk and cattle  sales  were  approximately  2% of the
Company's net sales in fiscal year 1999.


                                      5

<PAGE>

      COMPETITION. The production,  processing, and distribution of shell eggs
is an intensely competitive business which, traditionally, has attracted large
numbers of  producers.  Shell egg  competition  is  generally  based on price,
service,  and  quality of  production.  Although  the  Company is the  largest
combined  producer,  processor,  and  distributor  of shell eggs in the United
States, it does not occupy a controlling market position in any area where its
eggs are sold.

      The shell egg production and processing  industry has been characterized
by a growing  concentration  of  production.  In 1998,  61 producers  with one
million  or more  layers  owned  74% of the 263  million  total  U.S.  layers,
compared with the 56 producers with one million or more layers owning 63.6% of
the 231.9 million total U.S. layers in 1990, and 61 producers with one million
or more layers owning 56.2% of the 248.0  million  total U.S.  layers in 1985.
The Company  believes  that a  continuation  of that  concentration  trend may
result in the reduced cyclicality of shell egg prices, but no assurance can be
given in that regard.

      PATENTS  AND  TRADEMARKS.  The  Company  does  not  own any  patents  or
proprietary technologies,  but does market products under tradenames including
RIO GRANDE,  FARMHOUSE,  and SUNUPS.  Cal-Maine produces  Egg*land's  Best(TM)
eggs, under license from EB, as indicated above.

      GOVERNMENT  REGULATION.  The  Company is  subject  to federal  and state
regulations relating to grading, quality control, labeling,  sanitary control,
and waste disposal.  As a fully-integrated  egg producer,  the Company's shell
egg facilities are subject to USDA and FDA regulation. The Company's shell egg
facilities  are subject to periodic  USDA  inspections,  and its egg  products
plant is subject to continuous  on-site USDA inspection.  Cal-Maine  maintains
its own  inspection  program  to  assure  compliance  with the  Company's  own
standards and customer specifications.

      Cal-Maine  is  subject  to  federal  and  state  environmental  laws and
regulations and has all necessary permits.

      EMPLOYEES.  As of May 29, 1999, the Company had a total of approximately
1,635  employees  of whom  1,455  worked  in egg  production,  processing  and
marketing,  90 were engaged in feed mill operations,  50 in dairy  activities,
and 40 were administrative  employees,  including  officers,  at the Company's
executive offices. About 15% of the Company's personnel is part-time.  None of
the Company's employees are covered by a collective bargaining agreement.  The
Company considers its relations with employees to be good.


ITEM 2.     PROPERTIES

      The Company owns or leases farms,  processing plants,  hatcheries,  feed
mills,  warehouses,  offices and other property located in Alabama,  Arkansas,
Georgia, Kansas, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina,
Ohio, Oklahoma, South Carolina, Tennessee, and Texas, as follows: two breeding
facilities, two hatcheries, 13 feed mills, 11 production facilities, 11 pullet
growing  facilities,  15 processing and packing  facilities,  three  wholesale
distribution  facilities,  and a dairy farm. Most of the Company's property is
owned  and  encumbered.  See  Notes 6, 7, and 8 of the  Notes to  Consolidated
Financial Statements of the Company.

      The Company  operates 265  over-the-road  tractors and 331 trailers,  of
which 168 and 204 are owned, respectively, and the balance are leased.


                                      6

<PAGE>

      At May 29, 1999,  the Company owned  approximately  12,350 acres of land
and owned facilities to:

<TABLE>
<CAPTION>
 Operation            Capacity
 ---------            --------
<S>                  <C>
 Hatch               13,000,000  - pullet chicks per year
 Grow(1)              7,800,000  - pullets per year
 House(2)            12,000,000  - hens
 Produce                    600  - tons of feed per hour
 Process(3)               5,500  - cases of eggs per hour
<FN>
(1)   The Company uses  contract  growers for the  production of an additional
      2.8 million pullets.

(2)   The Company  controls  approximately  16.5 million layers,  of which 5.0
      million are cared for by contract producers.

(3)   One case equals 30 dozen eggs.
</FN>
</TABLE>

      Over the past five fiscal years,  Cal-Maine's capital  expenditures have
totaled approximately $97 million, including the acquisition of the operations
of other businesses. The Company's facilities currently are maintained in good
operable condition and are insured to an extent the Company deems adequate.


ITEM 3.     LEGAL PROCEEDINGS

      The Company is not a party to any material legal proceedings.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters  were  submitted to a vote of security  holders,  through the
solicitation of proxies or otherwise,  during the fourth quarter ended May 29,
1999.


                                      7

<PAGE>

                                   PART II.

ITEM 5.     MARKET FOR  REGISTRANT'S  COMMON  EQUITY AND  RELATED  SHAREHOLDER
            MATTERS

      The  Company's  Common Stock  commenced  trading on the NASDAQ  National
Market on December 11, 1996 under the symbol CALM.  The  following  table sets
forth the high and low daily sale prices and  dividends  for four  quarters of
fiscal 1998 and fiscal 1999. Cash Dividend SALES PRICE DECLARED

<TABLE>
<CAPTION>
                                             Sales Price
                                          ----------------        Cash Dividend
 Year Ended      Fiscal Quarter           High         Low           Declared
 ----------      --------------           ----         ---        -------------
<S>              <C>                     <C>         <C>              <C>
May 30, 1998     First Quarter           $7 5/8      $6 1/4           $.00
                 Second Quarter           7           5 7/8            .01
                 Third Quarter            7           5 1/2            .01
                 Fourth Quarter           6 5/8       4 3/4            .01

May 29, 1999     First Quarter            5 3/4       4                .01
                 Second Quarter           5 1/2       3 1/2            .0125
                 Third Quarter            5 7/16      4 1/4            .0125
                 Fourth Quarter           5 5/8       5 3/16           .0125
</TABLE>

      As of May 29, 1999, there were  approximately  180 record holders of the
Company's Common Stock and approximately  1,300 beneficial owners whose shares
were held by nominees or broker dealers.

      On September  24, 1996,  the  shareholders  approved an amendment to the
Company's  certificate of incorporation to authorize  capital stock consisting
of 30,000,000  shares of Common Stock and  1,200,000  shares of Class A Common
Stock, each class having a par value of $0.01 per share, and to reclassify and
change each previously  outstanding  share of Class A Common Stock,  $1.00 par
value  per  share,  and each  previously  outstanding  share of Class B Common
Stock,  $1.00 par value per share,  into 1,200 shares each of Common Stock and
Class A Common Stock,  respectively,  each class with a par value of $0.01 per
share. The Company's Amended and Restated Certificate of Incorporation,  which
reflects such authorized  capital stock,  was effective as of October 3, 1996.
Unless otherwise  indicated,  all references to historical earnings per share,
and number and class of shares outstanding,  are as adjusted for the aforesaid
recapitalization,  reclassification  and stock split of the Company's  capital
stock.

      There is no public  trading  market  for the Class A Common  Stock,  the
majority outstanding shares of which are owned by Fred A. Adams, Jr., Chairman
of the Board of Directors and Chief Executive Officer of the Company.

      In January 1998, the Company's Board of Directors  approved a program to
initiate the payment of quarterly cash dividends to shareholders.  The current
cash dividend is $.0125 per share on Common Stock, representing an annual cash
dividend of $.05 per share. The cash dividend is $.011875 per share on Class A
Common Stock,  representing an annual cash dividend of $.0475 per share. Under
the terms of the Company's agreements with its principal lenders, Cal-Maine is
subject to various financial  covenants limiting its ability to pay dividends.
The Company is required to maintain  minimum levels of working capital and net
worth,  to limit capital  expenditures,  leasing  transactions  and additional
long-term  borrowings,  and to maintain various current and cash-flow coverage
ratios,  among other  restrictions.  For the foreseeable  future,  the Company
expects to retain the majority of earnings for use in its business.


ITEM 6.     SELECTED FINANCIAL DATA

      The income  statement data presented below for each of the fiscal years,
which  end on the  Saturday  closest  to May 31,  have been  derived  from the
Company's audited financial statements.  The selected financial data should be
read in conjunction  with  "Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations"  and with the  consolidated  financial
statements of the Company and notes thereto included elsewhere in this report.


                                      8

<PAGE>

<TABLE>
<CAPTION>
                                                                       Fiscal Years Ended
                                                                       ------------------
                                              May 29,        May 30,         May 31,      June 1,        June 3,
                                               1999           1998            1997          1996           1995
                                               ----           ----            ----          ----           ----
                                                         (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
<S>                                         <C>            <C>            <C>            <C>            <C>
Net sales                                   $ 287,954      $ 309,071      $ 292,526      $ 282,844      $ 242,649
Cost of sales                                 242,022        264,636        236,273        230,850        223,965
                                            ----------------------------------------------------------------------
Gross profit                                   45,932         44,435         56,253         51,994         18,684
Selling, general and administrative            36,406         34,089         28,930         29,653         27,934
                                            ----------------------------------------------------------------------
  Operating income (loss)                       9,526         10,346         27,323         22,341         (9,250)
Other income (expense):
  Interest expense                             (5,195)        (4,583)        (4,277)        (5,487)        (5,052)
  Equity in income of affiliate                   326            294            524            721             24
  Other                                         3,330          2,268            783           (190)           993
                                            ----------------------------------------------------------------------
                                               (1,539)        (2,021)        (2,970)        (4,956)        (4,035)
                                            ----------------------------------------------------------------------
Income (loss) before income taxes               7,987          8,325         24,353         17,385        (13,285)
Income tax expense (benefit)                    2,907          2,946          9,508          6,460         (4,600)
                                            ----------------------------------------------------------------------
Net income (loss)                           $   5,080      $   5,379      $  14,845      $  10,925      $  (8,685)
                                            ======================================================================
Net income (loss) per common share(1):
  Basic                                     $    0.39      $    0.41      $    1.21      $    0.94      $   (0.74)
                                            ======================================================================
  Diluted                                   $    0.39      $    0.40      $    1.18      $    0.94      $   (0.74)
                                            ======================================================================
Cash dividends declared per share           $    0.04      $    0.02      $     .00      $     .00      $     .00
                                            ======================================================================
Weighted average shares outstanding(1):
  Basic                                        12,999         13,191         12,285         11,584         11,700
                                            ======================================================================
  Diluted                                      13,114         13,428         12,560         11,584         11,700
                                            ======================================================================
BALANCE SHEET DATA:
Working capital                             $  48,501      $  56,591      $  45,390      $  26,742      $  10,092
Total assets                                  213,682        203,188        182,294        149,991        147,402
Total debt (including current portion)         84,004         75,498         64,436         63,426         64,211
Total stockholders' equity                     80,584         79,547         74,642         47,900         37,472
<FN>

(1)   Reflects the 1,200-for-1 stock split October 3, 1996 as if the split had
      occurred in the earliest period presented.
</FN>
</TABLE>


ITEM 7.     MANAGEMENTS'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND
            RESULTS OF OPERATIONS

OVERVIEW

      The Company is primarily engaged in the production,  cleaning,  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.  The shell egg segment
accounted  for over 98% 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.  Egg products
operations, which accounted for approximately 4% of the Company's net sales in
fiscal 1998, were discontinued in May 1998.


                                      9

<PAGE>

      The Company  currently uses contract  producers for approximately 30% 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, as needed, for resale by the Company from outside producers.

      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 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 60% of Cal-Maine'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.

RESULTS OF OPERATIONS

      The following table sets forth, for the periods indicated, certain items
from the Company's consolidated statements of income expressed as a percentage
of net sales.

<TABLE>
<CAPTION>
                                                        Percentage of Net Sales
                                                          Fiscal Years Ended
                                            May 29, 1999     May 30, 1998     May 31, 1997
                                            ------------     ------------     ------------
<S>                                            <C>              <C>              <C>
Net sales                                      100.0%           100.0%           100.0%
Cost of sales                                   84.0             85.6             80.8
                                               ------           ------           ------
Gross profit                                    16.0             14.4             19.2
Selling, general & administrative expenses      12.6             11.0              9.9
                                               ------           ------           ------
Operating income                                 3.4              3.4              9.3
                                               ------           ------           ------
Other income (expense)                          (0.6)            (0.7)            (1.0)
                                               ------           ------           ------
Income before taxes                              2.8              2.7              8.3
                                               ------           ------           ------
Income tax expense                               1.0              1.0              3.2
                                               ------           ------           ------
Net income                                       1.8%             1.7%             5.1%
                                               ======           ======           ======
</TABLE>

FISCAL YEAR ENDED MAY 29, 1999 COMPARED TO FISCAL YEAR ENDED MAY 30, 1998

      NET SALES.  Net sales in the fiscal  year ended May 29, 1999 were $288.0
million,  a  decrease  of $21.1  million,  or 6.8%,  from net  sales of $309.1
million in the fiscal year ended May 30, 1998. The closure of the egg products
division,  in fiscal 1998,  accounts for $12.9  million of the decrease in net
sales for the current  fiscal year.  The balance of the decrease is the result
of lower  selling  prices for eggs.  Due to  increased  egg supplies and lower
exports,  average  shell egg market  prices  declined  approximately  5.4%. In
response to declining market prices,  Cal-Maine's net average selling price of
shell eggs decreased from $.657 per dozen for fiscal 1998 to $.623, a decrease
of $.034 per dozen, or 5.2%. Total dozens of eggs sold remained about the same
for both fiscal years,  425.5  million dozen for fiscal 1999,  compared to 424
million for fiscal 1998, an increase of 1.5 million dozens. Outside feed sales
increased $2.4 million,  or approximately  15.0%, for the current fiscal year.
The  increase  was the net result of an increase of 43.0% in tons of feed sold
to outside  producers,  offset by a decrease of 20.0% in the net selling price
per ton. Lower cost of feed ingredients brought market prices for feed down.

      COST OF SALES.  The cost of sales in fiscal 1999 was $242.0  million,  a
decrease  of $22.6  million,  or 8.5%,  under the fiscal 1998 cost of sales of
$264.6 million.  The closed egg products division  accounted for $13.0 million
of the current fiscal year decrease. The balance of the decrease is mostly due
to decreases in cost of feed  ingredients,  and lower shell egg market prices.
The lower  cost of feed  ingredients  is the  result of a large  1998 corn and
soybean harvest and indications of continued favorable feed prices as the 1999
crop season begins. Feed cost per dozen eggs produced during fiscal 1999 was $
 .195,  compared to $.248 per dozen in fiscal 1998, a decrease of 21.4%. During
fiscal 1999, the Company  purchased 116.0 million dozens from outside sources,
compared to 101.8 million dozen during fiscal 1998, an increase of 13.9%.  Due
to decreased egg market prices,  as discussed  above,  the Company was able to


                                      10

<PAGE>

purchase  all outside  dozens at more  favorable  net prices.  Lower shell egg
market  prices,  offset by  improvements  in egg  production and purchased egg
costs,  resulted in an  increase  in gross  profit from 14.4% of net sales for
fiscal 1998 to 16.0% of net sales for the 1999 fiscal year.

      SELLING,  GENERAL AND ADMINISTRATIVE  EXPENSES.  Selling,  general,  and
administrative expenses in fiscal 1999 were $36.4 million, an increase of $2.3
million,  or 6.7%, as compared to $34.1 million for fiscal 1998. The increases
are mostly in payroll and payroll related expenses, including cash payments to
certain  employees to terminate  stock options and employee  health  insurance
costs.  During the second  quarter of the 1999 fiscal year,  the  Company,  in
accordance with FASB Statement 121,  incurred an impairment change of $500,000
on a facility, including feed mill and production and distribution properties,
that was closed.  In the current  fiscal year,  franchise  fees have increased
almost  $500,000 as the Company  expands its markets for  specialty  brands of
eggs,  primarily EGGLAND'S BEST. Sales of the specialty brands for the current
year were 5.2% of net sales,  as compared to 3.4% for last  fiscal  year,  and
1.0% for fiscal 1997. Other costs, including delivery,  remained approximately
the same  during  both fiscal  years.  As a percent of net sales,  general and
administrative  expenses increased from 11.0% for fiscal 1998 to 12.6% for the
current fiscal year.

      OPERATING  INCOME.  As a result of the above,  the  Company's  operating
income was $9.5  million in fiscal  1999,  a decrease of $800,000 or 7.9%,  as
compared to operating income of $10.3 million for fiscal 1998. As a percent of
net sales,  operating  income for fiscal 1999 was 3.4%, the same as for fiscal
1998.

      OTHER INCOME (EXPENSE).  Other expense for fiscal 1999 was $1.5 million,
a decrease of $482,000, or 23.8%, as compared to other expense of $2.0 million
for fiscal 1998.  The  decrease in net other  expense is due to an increase in
interest  income of $831,000  offset by an  increase  in  interest  expense of
$611,000  and an increase  in other  income of  $263,000.  As a percent of net
sales,  other  expenses  were 0.6% for fiscal 1999 compared to 0.7% for fiscal
1998.

      INCOME TAXES. As a result of the above, the Company's pre-tax income was
$8.0  million in fiscal 1999,  compared to pre-tax  income of $8.3 million for
fiscal 1998. For fiscal 1999,  income tax expense totaled $2.9 million with an
effective rate of 36.4% as compared to income tax expense of $2.9 million with
an effective rate of 35.4% for fiscal 1998. The increase in the effective rate
is primarily due to a decrease in tax-exempt  interest  income as a percentage
of income before income taxes.

      NET  INCOME.  As a result of the above,  net income for fiscal  1999 was
$5.1  million,  or $0.39  per  basic  share,  compared  to net  income of $5.4
million, or $0.41 per basic share for fiscal 1998.

FISCAL YEAR ENDED MAY 30, 1998 COMPARED TO FISCAL YEAR ENDED MAY 31, 1997

      NET SALES.  Net sales in the fiscal  year ended May 30, 1998 were $309.1
million,  an  increase  of $16.6  million,  or 5.7%,  over net sales of $292.5
million in the fiscal  year ended May 31,  1997.  Although  average  shell egg
market prices declined, the increase in sales was due to increased dozens sold
and an  increase in feed sales,  which are part of the shell egg  segment,  to
outside egg  producers.  Cal-Maine's  net average  selling price of shell eggs
during  fiscal  1998 was $.675 per dozen,  as  compared to $.722 per dozen for
fiscal 1997, a decrease of 6.5%.  Due to increased  egg supplies and lower egg
exports,  average shell egg market prices declined  approximately 9.0%. During
fiscal 1998, the number of dozens sold increased approximately 6.0%, primarily
due to  acquisitions  of production  and  processing  facilities.  The Company
produced  327.7  million  dozens of eggs in  fiscal  1998,  compared  to 309.8
million dozens in fiscal 1997. The Company purchased 101.8 million dozens from
outside sources during fiscal 1998, compared to 73.4 million dozens of eggs in
fiscal 1997.  Approximately  one-third  of the  increase in outside  purchases
resulted from an  acquisition in Georgia.  This operation also  contributed to
the increase in outside feed sales.  Outside  feed sales  increased  from $2.8
million  during fiscal 1997 to $15.7 million in the 1998 fiscal year. In April
1997,  mid-fourth  quarter  of fiscal  1997,  the  Company  purchased  the egg
production  and  processing  facilities of Southern  Empire Egg Farm,  Inc. In
November  1997,  late  second  quarter of the 1998  fiscal  year,  the Company
purchased the inventories and shell egg production and processing equipment of
J&S Farms, Inc., and Savannah Valley Company Inc. These acquisitions accounted
for  approximately  14.0% of net sales for fiscal 1998, and 10.0% of dozens of
eggs sold.


                                      11

<PAGE>

      COST OF SALES.  The cost of sales in fiscal 1998 was $264.6 million,  an
increase of $28.3  million,  or 12.0%,  above the fiscal 1997 cost of sales of
$236.3 million. Although feed ingredient cost decreased, costs associated with
the increased amount of dozens and feed tonnage sold resulted in a higher cost
of sales.  Feed cost per dozen eggs  produced  during  fiscal  1998 was $.248,
compared to $.284 per dozen in fiscal 1997, a decrease of 12.7%.  As mentioned
above in the sales discussion,  the number of outside dozens of eggs purchased
increased for fiscal 1998. Though purchased at lower per dozen prices,  due to
lower shell egg market prices, the increased  quantities purchased resulted in
an increase in cost of sales.  With increasing units sold and decreasing sales
price per unit, the gross profit  decreased from 19.2% of net sales for fiscal
1997 to 14.4% for fiscal 1998.

      SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative expenses in fiscal 1998 were $34.1 million, an increase of $5.2
million,  or 17.8%,  as compared to the $28.9  million  for fiscal  1997.  The
increase  is  generally  due  to  acquisitions  and  increased  sales  volume.
Approximately  one-half of the cost  increase is due to delivery  expenses for
the increased  dozens sold. On a delivery cost per dozen  comparison,  overall
operating  costs have  increased 6.5% for the 1998 fiscal year. The balance of
the  cost  increase  is due to  specialty  egg  brands  promotions,  bad  debt
allowances, and an overall 4% increase in general administrative expenses. For
the 1998 fiscal  year,  the Company  incurred  approximately  $1.7  million in
franchise and advertising  expenses in opening new markets for specialty brand
eggs,  primarily the EGG LAND'S BEST  franchise in New York City.  Sale of the
specialty  brands of eggs for the 1998  fiscal  year were  almost  3.4% of net
sales,  as compared  to less than 1% for the prior  year.  As a percent of net
sales, general and administrative expenses have increased from 9.9% for fiscal
1997 to 11.0% for the 1998 fiscal year.

      OPERATING  INCOME.  As a result of the above,  the  Company's  operating
income was $10.3  million in fiscal  1998,  a decrease  of $17.0  million,  or
62.1%, as compared to an operating income of $27.3 million for fiscal 1997. As
a percent of net sales, operating income for fiscal 1998 was 3.4%, as compared
to 9.3% for fiscal 1997.

      OTHER INCOME (EXPENSE).  Other expense for fiscal 1998 was $2.0 million,
a decrease of $1.0  million,  or 32.0%,  as compared to other  expense of $3.0
million for fiscal 1997.  The  decrease in net expense is primarily  due to an
increase  in  interest  income of  $774,000,  net  insurance  claim  income of
$662,000 and an increase in interest expense of $306,000.  As a percent of net
sales,  other  expenses  were 0.7% for fiscal 1998 compared to 1.0% for fiscal
1997.

      INCOME TAXES. As a result of the above, the Company's pre-tax income was
$8.3 million in fiscal 1998,  compared to pre-tax  income of $24.4 million for
fiscal  1997.  For fiscal  1998,  an income tax  expense of $2.9  million  was
recorded with an effective  rate of 35.4% as compared to an income tax expense
of $9.5 million with an effective  rate of 39.0% for fiscal 1997. The decrease
in the effective  rate is due primarily to an increase in tax exempt  interest
income as a percentage of income before income taxes.  In addition,  in fiscal
1997,  income tax expense included an adjustment to reflect an increase in the
statutory federal rate for the then current and deferred tax liabilities.

      NET  INCOME.  As a result of the above,  net income for fiscal  1998 was
$5.4  million,  or $0.41  per basic  share,  compared  to net  income of $14.8
million, or $1.21 per basic share, for fiscal 1997.

      CAPITAL  RESOURCES AND LIQUIDITY.  The Company's  working capital at May
29, 1999 was $48.5  million  compared to $56.6  million at May 30,  1998.  The
Company's  current ratio was 2.17 at May 29, 1999 as compared with 2.39 at May
30, 1998. The Company's need for working  capital  generally is highest in the
last and first  quarters  ending  in May and  August,  respectively,  when egg
prices are normally at seasonal lows.  Seasonal borrowing needs frequently are
higher during these periods than during other fiscal periods.  The Company had
an unused $35.0  million line of credit with three banks at May 29, 1999.  The
Company's  long-term  debt at that  date,  including  current  maturities  and
capitalized lease obligations, amounted to $84.0 million, as compared to $75.5
million at May 30, 1998.

      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.  The Company is required by certain  provisions of
these loan  agreements to (1) maintain  minimum levels of working  capital and
net worth; (2) limit dividends,  capital  expenditures,  lease obligations and
additional  long-term  borrowings;   and  (3)  maintain  various  current  and
cash-flow  coverage  ratios,  among  other  restrictions.  The  Company was in
compliance with these provisions at May 29, 1999.


                                      12

<PAGE>

      For the fiscal year ended May 29,  1999,  $24.0  million of net cash was
provided by  operating  activities,  and $5.1  million was  provided  from net
proceeds from sales of property, plant, and equipment. Of this net cash, $15.9
million was used for  construction  and  purchases  of  property,  plant,  and
equipment and $12.2 million was used for the purchase of a shell egg operation
and processing  business.  On May 29,1999 the Company  purchased the shell egg
operation of Hudson  Brothers Inc. in Kentucky.  Included in the purchase were
approximately 1.2 million layers. The Company, as a 50% member,  invested $1.8
million in a joint venture shell egg production  and  processing  operation in
Utah, Delta Egg Farm, LLC.  Short-term  construction  advances of $2.5 million
were also made to Delta Egg Farm  which  were  repaid in the first  quarter of
fiscal 2000. The Company's cash flows from financing  activities  consisted of
long-term borrowings of $13.1 million, principal payments on long-term debt of
$11.3 million, purchases of common stock for the treasury of $3.5 million, and
payments of $586,000 in  dividends  on the  Company's  common  stock.  The net
result of these activities was a decrease in cash and cash equivalents of $4.9
million for fiscal 1999.

      At May 29,  1999,  the  Company  had  expended,  since  the start of the
project,  approximately  $7.5  million  for  construction  of  new  shell  egg
production and processing facilities in Waelder,  Texas. The estimated cost of
construction is  approximately  $18.7 million with  anticipated  borrowings in
fiscal 2000 of approximately $10.4 million from an insurance company.

      The  Company  has  $2.9  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
next 20 years  beginning  in fiscal 1999 or in the first  fiscal year in which
there is a change in ownership  control.  Payment of the $2.9 million deferred
tax  liability  would  reduce  the  Company's  cash,  but would not impact the
Company's statement of operations or stockholders' equity, as these taxes have
been accrued and are reflected on the Company's  balance sheet. See Note 11 of
Notes to Consolidated Financial Statements.

      YEAR 2000 ISSUE.  The Company has a program  underway to ensure that all
of its significant  computer  systems are Year 2000 compliant.  The program is
divided into three major  components:  (1)  identification  of all information
technology  systems ("IT  Systems")  and  non-information  technology  systems
("Non-IT Systems") that are not Year 2000 compliant; (2) repair or replacement
of the identified  non-compliant  systems;  and (3) testing of the repaired or
replaced  systems.  The Company has no "in house"  developed or proprietary IT
Systems.  The Company uses commercially  developed  software,  the majority of
which is periodically  upgraded through existing  maintenance  contracts.  For
part (1), identification, the review phase has been completed.  Identification
will continue as new  equipment,  software,  and upgrades are installed and as
the  Company  goes  through  the  testing  phase  of the  program.  Review  of
accounting  and  financial  reporting  systems is finished  and the Company is
continuing to review Non-IT Systems that may have embedded  microprocessors in
various  types of equipment.  Part (2),  repairing  and  replacing,  continues
primarily under  maintenance  contracts with the Company's  software  vendors.
While the Company's major systems are substantially  Year 2000 compliant,  the
software vendors  continue to send new programs,  upgrades and patches as they
get into final testing stages of their  product.  None of the vendors have, to
date, indicated any serious problems or delays in becoming Year 2000 compliant
in calendar 1999. Part (3), testing, has begun and will continue until vendors
have  completed  all  upgrades and patches.  Testing  should be  substantially
complete  in the first  quarter  ending in August  1999,  but will be  ongoing
throughout calendar 1999.

      The Company has been  contacting  key suppliers and customers  about the
Year 2000  issue.  While no  assurances  can be given that key  suppliers  and
business  partners  will remedy  their own Year 2000 issues,  the Company,  to
date, has not identified any material impact on its ability to continue normal
business  operations with suppliers or other third parties who fail to address
the issue.  The Company,  like other  businesses,  is dependent upon year 2000
compliance within the utilities, transportation, and financial industries.

      Actual costs associated with  implementation  of the Company's Year 2000
program  are  expected  to be  insignificant  to  the  Company's  consolidated
operations and financial  condition.  Costs of $50,000 to $100,000,  primarily
for hardware, are expected to be incurred. As of May 29, 1999, the Company has
expended under $50,000 in the project.  Significantly,  all of these costs are
will be capitalized  since the hardware would have been replaced even if there
were no Year 2000 issue.

      The Company will continue to monitor and evaluate the impact of the Year
2000 issue on its operations. Until the Company as completed the final testing
phase of its program,  the risks for potential  Year 2000  failures  cannot be
fully assessed.  Thus, the Company cannot now finalize contingency plans until


                                      13

<PAGE>

such  testing  is  complete.  These  contingency  plans will be  developed  as
potential Year 2000 failures are identified in the final testing stages.

      FORWARD   LOOKING   STATEMENTS.   The   foregoing   statements   contain
forward-looking  statements  which  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  which are beyond the
Company's  control.  These include  adverse changes in shell egg prices and in
the grain markets.  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.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

See Note 12 to the Company's Consolidated Financial Statements.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The financial statements,  schedules, and supplementary data required by
this item are listed in Item 14(a) of this  report and  included  at pages F-1
through F-15.

QUARTERLY FINANCIAL DATA: (unaudited,  amounts in thousands,  except per share
data)

<TABLE>
<CAPTION>
                                             Fiscal Year 1999
                              First        Second         Third        Fourth
                             Quarter       Quarter       Quarter       Quarter
                            ---------------------------------------------------
<S>                         <C>           <C>           <C>           <C>
Net sales                   $ 68,785      $ 77,948      $ 77,861      $ 63,360
Operating income (loss)       (2,854)        8,017         6,991        (2,628)
Net income (loss)             (2,087)        4,254         3,979        (1,066)
Net income per share
  Basic                     $   (.16)     $    .32      $    .31      $   (.08)
  Diluted                   $   (.16)     $    .32      $    .30      $   (.08)


                                             Fiscal Year 1998
                              First        Second         Third        Fourth
                             Quarter       Quarter       Quarter       Quarter
                            ---------------------------------------------------
Net sales                   $ 63,723      $ 79,435      $ 89,344      $ 76,569
Operating income              (1,991)        7,314         5,419          (396)
Net income                    (1,737)        4,244         3,703          (831)
Net income per share
  Basic                     $   (.13)     $    .32      $    .28      $   (.06)
  Diluted                   $   (.13)     $    .32      $    .28      $   (.06)
</TABLE>


ITEM 9.     CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

      None.


                                      14

<PAGE>

                                   PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The  information  called for by this item with respect to directors  and
executive  officers is incorporated  by reference to the Company's  definitive
proxy  statement  which is to be filed  pursuant to  Regulation  14A under the
Securities  Exchange Act of 1934 in connection  with the Company's 1999 Annual
Meeting of Shareholders.


ITEM 11.    EXECUTIVE COMPENSATION

      The information  called for by this item is incorporated by reference to
the Company's  definitive  proxy  statement  which is to be filed  pursuant to
Regulation  14A under the Securities  Exchange Act of 1934 in connection  with
the Company's 1999 Annual Meeting of Shareholders.


ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The information  called for by this item is incorporated by reference to
the Company's  definitive  proxy  statement  which is to be filed  pursuant to
Regulation  14A under the Securities  Exchange Act of 1934 in connection  with
the Company's 1999 Annual Meeting of Shareholders.


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information  called for by this item is incorporated by reference to
the Company's  definitive  proxy  statement  which is to be filed  pursuant to
Regulation  14A under the  Securities  Exchange Act of 1934 in connection  the
Company's 1999 Annual Meeting of Shareholders. PART IV


ITEM 14.    EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

      (a)   DOCUMENTS FILED AS PART OF THIS REPORT

            (1)   Financial Statements-filed at pages F-1 through F-15 of this
                  Report.

                  Report of Independent Auditors
                  Consolidated  Balance  Sheets as of May 29, 1999 and May 30,
                    1998
                  Consolidated  Statements  of Income for the Years  Ended May
                    29, 1999, May 30, 1998 and May 31, 1997
                  Consolidated  Statements  of  Stockholders'  Equity  for the
                    Years Ended May 29, 1999, May 30, 1998 and May 31, 1997
                  Consolidated  Statements  of Cash Flows for the Years  Ended
                    May 29, 1999, May 30, 1998 and May 31, 1997.
                  Notes to Consolidated Financial Statements

            (2)   Financial  Statement  Schedules  - filed at page S-1 of this
                  Report.

                  Schedule II - Valuation and Qualifying Accounts

                  Financial statement schedules not included have been omitted
            because they are either not applicable or the required information
            is  shown  in  the  consolidated  financial  statements  or  notes
            thereto.


                                      15

<PAGE>

            (3)   Exhibits

                  The following exhibits are filed herewith or incorporated by
            reference:

EXHIBIT
NUMBER                          EXHIBIT

3.1         Amended  and  Restated   Certificate  of   Incorporation   of  the
            Registrant.*

3.2         By-Laws of the Registrant, as amended.*

4.1         See  Exhibits  3.1 and 3.2 as to be the  rights of  holders of the
            Registrant's common stock.

4.2         Form of Warrant Agreement (including form of Common Stock Purchase
            Warrant).*

10.1        Amended  and  Restated  Term Loan  Agreement,  dated as of May 29,
            1990,  between  Cal-Maine  Foods,  Inc. and  Cooperative  Centrale
            Raiffeisen - Boerenleenbank B.A.,  "Rabobank  Nederland," New York
            Branch,  and Amended and Restated Revolving Credit Agreement among
            Cal-Maine  Foods,  Inc.,  and  Barclays  Banks PLD (New  York) and
            Cooperatieve Centrale  Raiffeisen-Borenleenbank  B.A., dated as of
            29 May 1990, and amendments thereto (without exhibits).*

10.1(a)     Amendment to Term Loan  Agreement  (see Exhibit  10.1) dated as of
            June 3, 1997 (without exhibits). **

10.2        Note Purchase  Agreement,  dated as of November 10, 1993,  between
            John Hancock  Mutual Life Insurance  Company and Cal-Maine  Foods,
            Inc., and amendments thereto (without exhibits).*

10.3        Loan Agreement, dated as of May 1, 1991, between Metropolitan Life
            Insurance  Corporation and Cal-Maine  Foods,  Inc., and amendments
            thereto (without exhibits).*

10.4        Employee Stock Ownership Plan, as Amended and Restated.*+

10.5        1993 Stock Option Plan, as Amended.*+

10.6        Wage  Continuation  Plan,  dated as of January1,  1986, among R.K.
            Looper, B.J. Raines, and the Registrant.*+

10.6(a)     Amendment dated October 29, 1997 to Wage Continuation  Plan, dated
            as of January 1, 1986,  between  B.J.  Raines and the  Registrant.
            ****+

10.7        Wage  Continuation  Plan,  dated as of July 1, 1986,  between Jack
            Self and the Registrant, as amended on September 2, 1994.*+

10.8        Wage  Continuation  Plan, dated as of April 15, 1988,  between Joe
            Wyatt and the Registrant.*+

10.9        Redemption Agreement,  dated March 7, 1994, between the Registrant
            and Fred R. Adams, Jr.*

10.10       Note Purchase Agreement,  dated December 18, 1997, among Cal-Maine
            Foods, Inc., Cal-Maine Farms, Inc., Cal-Maine Egg Products,  Inc.,
            Cal-Maine  Partnership,  LTD,  CMF of Kansas  LLC and First  South
            Production  Credit  Association  and  Metropolitan  Life Insurance
            Company (without exhibits, except names of guarantors and forms of
            notes) ***

10.11       Wage  Continuation  Plan,  dated as of  January  14,  1999,  among
            Stephen Storm, Charles F. Collins, Bob Scott, and the Registrant +

21          Subsidiaries of the Registrant.*

23          Consent of Ernst & Young LLP.


                                      16

<PAGE>

27          Financial Data Schedule
 -----------------------
*           Incorporated   by  reference   to  the  same  exhibit   number  in
            Registrant's Form S-1 Registration Statement No. 333-14809.

**          Incorporated   by  reference   to  the  same  exhibit   number  in
            Registrant's Form 10-K for fiscal year ended May 31,1997.

***         Incorporated   by  reference   to  the  same  exhibit   number  in
            Registrant's  Form 10-Q for the quarter  ended  November 29, 1997.


****        Incorporated   by  reference   to  the  same  exhibit   number  in
            Registrant's Form 10-K for fiscal year ended May 30, 1998.

+Management contract or compensatory plan.


The Company agrees to file with the Securities and Exchange  Commission,  upon
request,  copies of any  instrument  defining the rights of the holders of its
consolidated long-term debt.

      (b)   REPORTS ON FORM 8-K

No  Current  Report on Form 8-K was  filed by the  Company  covering  an event
during the fourth  quarter of fiscal 1998. No  amendments to previously  filed
Forms 8-K were filed during the fourth quarter of 1999.

      (c)   EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K

The exhibits listed in Item 14(a)(3) of this report,  and not  incorporated by
reference to a separate file, follow page S-1.

      (d)   FINANCIAL STATEMENT SCHEDULES REQUIRED BY REGULATION S-X

The financial  statement  schedule required by Regulation S-X is filed at page
S-1.


                                      17

<PAGE>

                                  SIGNATURES

      Pursuant to the  requirements  of Section 13 or 15(d) 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,  in  Jackson,
Mississippi, on this 24th day of August, 1999.

                                             CAL-MAINE FOODS, INC.

                                               /s/FRED R. ADAMS, JR.
                                               ---------------------
                                                  Fred R. Adams, Jr.
                                                  Chairman of the Board and
                                                  Chief Executive Officer

      Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this report has been signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated:

      SIGNATURE                      TITLE                           DATE

 /s/FRED R. ADAMS, JR.     Chairman of the Board and           August 24, 1999
 ---------------------     Chief Executive Officer
    Fred R. Adams, Jr      (Principal Executive Officer)

 /s/RICHARD K. LOOPER      Vice Chairman of the Board          August 24, 1999
 --------------------      and Director
    Richard K. Looper

 /s/ADOLPHUS B. BAKER      President and Director              August 24, 1999
 --------------------
    Adolphus B. Baker

 /s/BOBBY J. RAINES        Vice President, Chief Financial     August 24, 1999
 ------------------        Officer, Treasurer, Secretary
    Bobby J. Raines        and Director
                           (Principal Financial Officer)

 /s/CHARLES F. COLLINS     Vice President, Controller          August 24, 1999
 ---------------------     and Director
    Charles F. Collins     (Principal Accounting Officer)

 /s/JACK B. SELF           Vice President and Director         August 24, 1999
 ---------------
    Jack B. Self

 /s/JOE M. WYATT           Vice President and Director         August 24, 1999
 ---------------
    Joe M. Wyatt

 /s/W. D. COX              Director                            August 24, 1999
 ------------
    D. Cox

 /s/R. FASER TRIPLETT      Director                            August 24, 1999
 --------------------
    Faser Triplett


                                      18

<PAGE>

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                          PAGE

Report of Independent Auditors ............................................F-2

Consolidated Balance Sheets as of May 29, 1999 and May 30, 1998 ...........F-3

Consolidated Statements of Income for the years ended May 29, 1999,
  May 30, 1998 and May 31, 1997 ...........................................F-4

Consolidated Statements of Stockholders' Equity for the years ended
  May 29, 1999, May 30, 1998 and May 31, 1997 .............................F-5

Consolidated Statements of Cash Flows for the years ended May 29,
  1999, May 30, 1998 and May 31, 1997 .....................................F-6

Notes to Consolidated Financial Statements ................................F-7


                                     F-1

<PAGE>

                        Report of Independent Auditors

The Board of Directors and Stockholders
Cal-Maine Foods, Inc.

We have  audited the  accompanying  consolidated  balance  sheets of Cal-Maine
Foods,  Inc. and  subsidiaries  as of May 29, 1999 and May 30,  1998,  and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended May 29, 1999.  Our audits also
included the financial  statement  schedule listed in the index at Item 14(a).
These  financial  statements  and  schedule  are  the  responsibility  of  the
Company's  management.  Our  responsibility  is to express an opinion on these
financial statements and schedule based on our audits.

We  conducted  our  audits in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that we plan and  perform  the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial  statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made by  management,  as well as evaluating  the overall  financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our  opinion,  the  consolidated  financial  statements  referred  to above
present fairly, in all material respects,  the consolidated financial position
of Cal-Maine  Foods,  Inc. and  subsidiaries at May 29, 1999 and May 30, 1998,
and the consolidated results of their operations and their cash flows for each
of the three  years in the  period  ended May 29,  1999,  in  conformity  with
generally accepted accounting  principles.  Also, in our opinion,  the related
financial  statement  schedule,  when  considered  in  relation  to the  basic
financial  statements  taken  as a  whole,  presents  fairly  in all  material
respects the information set forth therein.

                                                          /s/ERNST & YOUNG LLP

Jackson, Mississippi
July 17, 1999


                                     F-2

<PAGE>

                    Cal-Maine Foods, Inc. and Subsidiaries

                          Consolidated Balance Sheets
                     (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                               May 29         May 30
                                                                                1999           1998
                                                                            -------------------------
<S>                                                                         <C>            <C>
Assets
Current assets:
  Cash and cash equivalents                                                 $  36,198      $  41,126
  Receivables:
    Trade receivables, less allowance for doubtful
      accounts of $52 in 1999 and $361 in 1998                                 11,667         13,223
    Note receivable from affiliate                                              2,500              -
    Other                                                                         450            468
                                                                            -------------------------
                                                                               14,617         13,691
  Recoverable federal and state income taxes                                        -            218
  Inventories                                                                  38,353         41,437
  Prepaid expenses and other current assets                                       771            791
                                                                            -------------------------
Total current assets                                                           89,939         97,263
Other assets:
  Notes receivable and investments                                              7,468          5,373
    Goodwill                                                                    4,260              -
  Other                                                                         2,104          1,183
                                                                            -------------------------
                                                                               13,832          6,556
Property, plant and equipment, less accumulated
  depreciation                                                                109,911         99,369
                                                                            -------------------------
Total assets                                                                $ 213,682      $ 203,188
                                                                            =========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Trade accounts payable                                                    $  16,597      $  17,705
    Federal and state income taxes payable                                      1,484              -
  Accrued wages and benefits                                                    4,975          4,350
  Accrued expenses and other liabilities                                        3,970          3,701
  Current maturities of long-term debt                                          4,118          4,540
    Deferred income taxes                                                      10,294         10,376
                                                                            -------------------------
Total current liabilities                                                      41,438         40,672
Long-term debt, less current maturities                                        79,886         70,958
Deferred expenses                                                               1,489          1,716
Deferred income taxes                                                          10,285         10,295
                                                                            -------------------------
Total liabilities                                                             133,098        123,641
Stockholders' equity:
  Common stock, $.01 par value:
    Authorized shares - 30,000,000
    Issued and outstanding shares - 17,565,200                                    176            176
  Class A common stock, $.01 par value:
    Authorized shares - 1,200,000
    Issued and outstanding shares -1,200,000                                       12             12
  Paid-in capital                                                              18,784         18,784
  Retained earnings                                                            71,525         67,031
  Common stock in treasury (6,257,712 shares in 1999 and 5,608,212
    shares in 1998)                                                            (9,913)        (6,456)
                                                                            -------------------------
Total stockholders' equity                                                     80,584         79,547
                                                                            -------------------------
Total liabilities and stockholders' equity                                  $ 213,682      $ 203,188
                                                                            =========================
</TABLE>

SEE ACCOMPANYING NOTES.


                                      F-3

<PAGE>

                    Cal-Maine Foods, Inc. and Subsidiaries

                       Consolidated Statements of Income
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                         Fiscal Year Ended
                                             ----------------------------------------
                                               May 29         May 30         May 31
                                                1999           1998           1997
                                             ----------------------------------------
<S>                                          <C>            <C>            <C>
Net sales                                    $ 287,954      $ 309,071      $ 292,526
Cost of sales                                  242,022        264,636        236,273
                                             ----------------------------------------
Gross profit                                    45,932         44,435         56,253
Selling, general and administrative             36,406         34,089         28,930
                                             ----------------------------------------
Operating income                                 9,526         10,346         27,323

Other income (expense):
  Interest expense                              (5,195)        (4,583)        (4,277)
  Interest income                                2,202          1,371            597
  Equity in income of affiliates                   357            294            524
  Other, net                                     1,097            897            186
                                             ----------------------------------------
                                                (1,539)        (2,021)        (2,970)
                                             ----------------------------------------
Income before income taxes                       7,987          8,325         24,353
Income tax expense                               2,907          2,946          9,508
                                             ----------------------------------------
Net income                                   $   5,080      $   5,379      $  14,845
                                             ========================================

Net income per share:
  Basic                                      $     .39      $     .41      $    1.21
                                             ========================================
  Diluted                                    $     .39      $     .40      $    1.18
                                             ========================================
Weighted average shares outstanding:
  Basic                                         12,999         13,191         12,285
                                             ========================================
  Diluted                                       13,114         13,428         12,560
                                             ========================================
</TABLE>

SEE ACCOMPANYING NOTES.


                                                                F-4

<PAGE>

                    Cal-Maine Foods, Inc. and Subsidiaries

                Consolidated Statements of Stockholders' Equity
                   (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                       Common Stock                                               Note
                                   -----------------------------------------------------    Paid-in  Retained  Receivable
                                                    Class A  Class A  Treasury  Treasury                           -
                                    Shares  Amount  Shares   Amount    Shares    Amount     Capital  Earnings  Stockholder  Total
                                   ------------------------------------------------------------------------------------------------
<S>                                <C>      <C>     <C>       <C>      <C>      <C>         <C>      <C>        <C>        <C>
Balance at June 1, 1996            17,035   $170        -     $ -      5,522    $(5,863)    $ 8,229  $47,058    $(1,694)   $47,900
  Exchange of common stock for
    Class A common stock           (1,200)   (12)   1,200      12          -          -           -        -          -          -
  Issuance of common stock          1,730     18        -       -          -          -      10,562        -          -     10,580
  Redemption of fractional shares
    of common stock                     -      -        -       -          -          -          (6)       -          -         (6)
  Purchases of common stock for
    treasury                            -      -        -       -         61       (371)          -        -          -       (371)
  Repayment of note receivable -
    stockholder                         -      -        -       -          -          -           -        -      1,694      1,694
  Net income for fiscal 1997            -      -        -       -          -          -           -   14,845          -     14,845
                                   ------------------------------------------------------------------------------------------------
Balance at May 31, 1997            17,565    176    1,200      12      5,583     (6,234)     18,785   61,903          -     74,642
  Redemption of fractional shares
    of common stock                     -      -        -       -          -          -          (1)       -          -         (1)
  Purchases of common stock for         -      -        -       -         50       (311)          -        -          -       (311)
    treasury
  Sale of common stock from
    treasury                            -      -        -       -        (25)        89           -        -          -         89
  Cash dividends paid ($.020 per
    common share)                       -      -        -       -          -          -           -     (251)         -       (251)
  Net income for fiscal 1998            -      -        -       -          -          -           -    5,379          -      5,379
                                   ------------------------------------------------------------------------------------------------
Balance at May 30, 1998            17,565    176    1,200      12      5,608     (6,456)     18,784   67,031          -     79,547
  Purchases of common stock
    for treasury                        -      -        -       -        650     (3,457)          -        -          -     (3,457)
  Cash dividends paid ($.045 per        -      -        -       -          -          -           -     (586)         -       (586)
    common share)
  Net income for fiscal 1999            -      -        -       -          -          -           -    5,080          -      5,080
                                   ------------------------------------------------------------------------------------------------
Balance at May 29, 1999            17,565   $176    1,200     $12      6,258    $(9,913)    $18,784  $71,525    $     -    $80,584
                                   ================================================================================================
</TABLE>

SEE ACCOMPANYING NOTES.


                                      F-5

<PAGE>

                    Cal-Maine Foods, Inc. and Subsidiaries
                     Consolidated Statements of Cash Flows
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  Fiscal year ended
                                                                       -------------------------------------
                                                                         May 29        May 30        May 31
                                                                          1999          1998          1997
                                                                       -------------------------------------
<S>                                                                    <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                             $  5,080      $  5,379      $ 14,845
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                                        12,199        12,017        10,550
    Provision for doubtful accounts                                          51           361            52
    Deferred income taxes                                                   (92)          805         2,856
    Equity in income of affiliates                                         (357)         (294)         (524)
    (Gain) loss on sales of property, plant and equipment                  (355)          (27)           69
    Increase in deferred compensation                                        50            50            60
Change in operating assets and  liabilities, net of effects
  from purchases of shell egg production and processing
  businesses:
    (Increase) decrease in receivables and other assets                   1,891          (321)        1,702
    Decrease in inventories                                               5,967         3,675         1,238
    Increase (decrease) in accounts payable, accrued expenses
      and deferred expenses                                                (367)        3,262         1,635
                                                                       -------------------------------------
Net cash provided by operating activities                                24,067        24,907        32,483

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment                              (15,911)      (14,831)      (16,189)
Purchases of shell egg production and processing businesses             (12,161)       (3,745)       (6,956)
Payments received on notes receivable and from investments                  798           297         1,634
Increase in notes  receivable and investments                            (4,603)         (725)          (15)
Net proceeds from sales of property, plant and equipment                  5,122           898           914
                                                                       -------------------------------------
Net cash used in investing activities                                   (26,755)      (18,106)      (20,612)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock                                        -             -        10,580
Long-term borrowings                                                     13,135        35,800         3,000
Principal payments on long-term debt and capital leases                 (11,332)      (24,738)       (6,990)
Payments received on note receivable - stockholder                            -             -         1,694
Purchases of common stock for treasury                                   (3,457)         (311)         (371)
Sales of common stock from treasury                                           -            89             -
Payments of dividends                                                      (586)         (251)            -
Redemption of fractional shares of common stock                               -            (1)           (6)
                                                                       -------------------------------------
Net cash provided by (used in) financing activities                      (2,240)       10,588         7,907
                                                                       -------------------------------------
Increase (decrease) in cash and cash equivalents                         (4,928)       17,389        19,778
Cash and cash equivalents at beginning of year                           41,126        23,737         3,959
                                                                       -------------------------------------
Cash and cash equivalents at end of year                               $ 36,198      $ 41,126      $ 23,737
                                                                       =====================================
Non-cash investing and financing activities:
  Note payable for purchase of shell egg
    production and processing business                                 $      -      $      -      $  5,000
                                                                       =====================================
  Notes received from sales of properties                              $     80      $      -      $     88
                                                                       =====================================
</TABLE>

SEE ACCOMPANYING NOTES.


                                      F-6

<PAGE>

                    Cal-Maine Foods, Inc. and Subsidiaries

                  Notes to Consolidated Financial Statements
              (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                 May 29, 1999


1.    SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Cal-Maine Foods,
Inc. and its subsidiaries (the "Company") all of which are  wholly-owned.  All
significant  intercompany  transactions  and accounts have been  eliminated in
consolidation.

BUSINESS

The Company is engaged in the production, processing and distribution of shell
eggs and livestock  operations.  The Company's  operations  are  significantly
affected by the market price fluctuation of its principal products sold, shell
eggs, and the costs of its principal feed ingredients, corn and other grains.

Primarily  all of the  Company's  sales  are to  wholesale  egg  buyers in the
southeastern, southwestern, mid-western and mid-Atlantic regions of the United
States.  Credit  is  extended  based  upon an  evaluation  of each  customer's
financial  condition  and  credit  history  and  generally  collateral  is not
required.   Credit   losses  have   consistently   been  within   management's
expectations.  No single customer accounted for more than 10% of the Company's
net sales in fiscal  1999 or 1998.  One  customer  accounted  for 10.1% of the
Company's net sales in fiscal 1997.

USE OF ESTIMATES

The preparation of the  consolidated  financial  statements in conformity with
general accepted  accounting  principles requires management to make estimates
and assumptions that affect the amount reported in the consolidated  financial
statements  and  accompanying  notes.  Actual  results could differ from those
estimates.

CASH EQUIVALENTS

The Company  considers all highly liquid  investments with a maturity of three
months or less when purchased to be cash equivalents.

INVENTORIES

Inventories of eggs,  feed,  supplies and livestock are valued  principally at
the lower of cost (first-in, first-out method) or market.

The cost associated with flocks,  consisting  principally of chick  purchases,
feed, labor,  contractor payments and overhead costs, are accumulated during a
growing period of approximately  18 weeks.  Flock costs are amortized over the
productive lives of the flocks, generally one to two years.


                                      F-7

<PAGE>

PROPERTY, PLANT AND EQUIPMENT

Property,  plant and equipment is stated at cost.  Depreciation is provided by
the  straight-line  method over the estimated useful lives,  which is 15 to 25
years  for  buildings  and  improvements  and 3 to 8 years for  machinery  and
equipment.

IMPAIRMENT OF LONG-LIVED ASSETS

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 through a charge to operations.

INTANGIBLE ASSETS

Included in other assets are loan  acquisition  costs which are amortized over
the life of the related loan and franchise  fees which are amortized  over ten
years.

REVENUE RECOGNITION

Revenue is recognized when product is shipped to customers.

INCOME  TAXES

Income taxes have been provided using the liability  method.  Deferred  income
taxes  reflect  the net tax  effects  of  temporary  differences  between  the
carrying  amounts of assets and liabilities for financial  reporting  purposes
and the amounts used for income tax purposes.

STOCK BASED COMPENSATION

The Company  grants  stock  options for a fixed  number of shares to employees
with an  exercise  price equal to or above the fair value of the shares at the
date of the grant.  The Company accounts for stock option grants in accordance
with APB Opinion No. 25,  "Accounting  for Stock  Issued to  Employees,"  and,
accordingly, recognizes no compensation expense for the stock option grants.

NET INCOME PER COMMON SHARE

Basic  earnings  per  share is based on the  weighted  average  common  shares
outstanding.  Diluted  earnings per share  includes  any  dilutive  effects of
options and warrants.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the FASB issued Statement of Financial  Accounting Standards No.
133, "Accounting for Derivative  Instruments and Hedging Activities" (SFAS No.
133). The  provisions of SFAS No. 133 requires all  derivatives to be recorded
on the  balance  sheet  at fair  value.  SFAS  No.  133  establishes  "special
accounting" for derivatives  that are hedges.  Derivatives that are not hedges
must be adjusted to fair value through  income.  Management has not determined
the effect of the adoption of this  statement  to the  earnings and  financial
position of the Company when it becomes effective for fiscal 2001.


                                      F-8

<PAGE>

FISCAL YEAR

The Company's  fiscal year-end is on the Saturday nearest May 31 which was May
29, 1999 (52 weeks),  May 30, 1998 (52 weeks) and May 31, 1997 (52 weeks), for
the most recent three fiscal years.

2.    INITIAL PUBLIC OFFERING

During  December 1996 and January 1997, the Company sold  1,730,000  shares in
the aggregate of its common stock at $7 per share in an  underwritten  initial
public offering (the "Offering"). Net proceeds from the Offering were $10,580.

3.    ACQUISITIONS

In May 1999, The Company  purchased all of the issued and  outstanding  common
stock of a shell egg production and  processing  business for $12,161,  net of
cash acquired.  The purchase price was allocated  based upon the fair value of
the assets acquired and liabilities  assumed  resulting in goodwill of $4,260,
which is being  amortized  on the  straight-line  method  over 15  years.  The
purchase  price is subject to  adjustment  in fiscal 2000 based upon the final
tax  accounting  of  the  company   acquired  for  the  period  prior  to  the
acquisition.

Unaudited  pro forma  results of  operations  of the  Company,  including  the
company  acquired in fiscal 1999, for the periods prior to its  acquisition by
the Company were as follows:

<TABLE>
<CAPTION>
                                                       FISCAL YEAR ENDED
                                                  MAY 29              May 30
                                                   1999                1998
<S>                                              <C>                 <C>
Net sales                                        $308,530            $329,991
Net income                                       5,646               5,013
Net income per basic share                       .43                 .38
Net income per diluted share                     .43                 .37
</TABLE>


Pro forma results do not purport to be  indicative  of actual  results had the
acquisition  been  made at June 1, 1997 or the  results  that may occur in the
future.

In November 1997, the Company  purchased,  certain operating assets of a shell
egg production and processing  business for $3,745. In April 1997, the Company
purchased,  certain  operating assets of a shell egg production and processing
business for $5,654 in cash and a $5,000 note payable to the former owners. In
January 1997, the Company purchased, for $1,302, certain operating assets of a
shell egg production  business.  These  acquisitions were accounted for by the
purchase method of accounting.

The  operating  results  of these  businesses  acquired  are  included  in the
consolidated statements of income of the Company for the periods subsequent to
the acquisition dates.  Prior operations of the businesses  acquired in fiscal
1998 and 1997 were  immaterial to the Company's  consolidated  net sales,  net
income and net income per basic and diluted  common share for the fiscal years
ended May 30, 1998 and May 31, 1997.

4.    INVESTMENT IN AFFILIATES

The Company owns 50% of BCM Egg Company ("BCM"), a partnership, Specialty Eggs
LLC and Delta Eggs LLC and 32.5% of  American  Egg  Products,  Inc. at May 29,
1999. Equity in earnings of $357, $284 and $524, from these entities have been
included in the  consolidated  statements of income for fiscal 1999,  1998 and
1997,  respectively.  The Company purchased $4,863,  $5,189 and $9,831 of eggs
from BCM during each of those fiscal  years,  which  represented a significant
percentage  of BCM's sales.  Note  receivable  from  affiliate at May 29, 1999
consisted  of a $2,500  demand note  receivable  from Delta Eggs LLC  accruing
interest at prime minus 1.00%. Payment for the demand note was received by the
Company subsequent to May 29, 1999.


                                     F-9

<PAGE>

5.    INVENTORIES

Inventories consisted of the following:

<TABLE>
<CAPTION>
                                                  MAY 29              May 30
                                                   1999                1998
<S>                                              <C>                 <C>
      Flocks                                     $ 24,662            $ 26,866
      Eggs and egg products                         2,471               2,683
      Feed and supplies                             7,847               8,736
      Livestock                                     3,373               3,152
                                                 $ 38,353            $ 41,437
</TABLE>

6.    PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                  MAY 29              May 30
                                                   1999                1998
<S>                                              <C>                 <C>
      Land and improvements                      $ 23,635            $ 22,180
      Buildings and improvements                   65,985              57,248
      Machinery and equipment                      85,320              84,204
      Construction-in-progress                      9,414               7,280
                                                  184,354             170,912
      Less accumulated depreciation                74,443              71,543
                                                 $109,911            $ 99,369
</TABLE>

Depreciation expense was $11,958, $11,595 and $10,172 in fiscal 1999, 1998 and
1997, respectively.

7.    LEASES

Future minimum payments under noncancelable operating leases that have initial
or remaining  noncancelable terms in excess of one year at May 29, 1999 are as
follows:

<TABLE>
<S>                                         <C>
      2000                                  $  3,525
      2001                                     2,752
      2002                                     2,800
      2003                                     1,496
      2004                                     1,260
      Thereafter                               1,246
      Total minimum lease payments          $ 13,079
</TABLE>


                                     F-10

<PAGE>

Substantially   all  of  the  leases  provide  that  the  Company  pay  taxes,
maintenance,  insurance and certain other operating expenses applicable to the
leased assets.  The Company has guaranteed under certain  operating leases the
residual  value of  transportation  equipment at the expiration of the leases.
Rent  expense was  $3,824,  $3,979 and $3,849 in fiscal  1999,  1998 and 1997,
respectively.  Included in rent  expense are vehicle  rents  totaling  $1,777,
$1,876 and $1,837 in fiscal 1999, 1998 and 1997, respectively.

8.    CREDIT FACILITIES AND LONG-TERM DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                                         May 29               May 30
                                                                          1999                 1998
<S>                                                                     <C>                  <C>
Note payable at 6.7%; due in monthly installments
  of $100, plus interest, maturing in 2009                              $18,000              $12,515
Series A Senior Secured Notes at 6.87%; due in annual
  principal installments of $1,917 beginning on
  December 2002 through 2009 with interest due
  semi-annually                                                          11,500               11,500
Series B Senior Secured Notes at 7.18%; due in annual
  principal installments of $2,143 beginning in
  December 2003 through 2009 with interest due                           15,000               15,000
  semi-annually
Industrial revenue bonds at 7.21%; due in monthly installments
  of $40, plus interest, maturing in 2011                                13,191               10,000
Note payable at 7.64%; due in monthly installments of
  $114, including interest, maturing in 2003                              9,269                9,909
Note payable at 7.75%; due in monthly installments of
  $55, plus interest, maturing in 2003                                    6,675                7,335
Note payable at 8.25%; due in monthly installments of
  $79, including interest, maturing in 2004                               3,747                4,353
Note payable at 6.85%; due in monthly installments of
  $66 commencing on August 1, 2000, plus interest,
  maturing in 2004                                                        2,850                    -
Note payable at 8.25%; due in monthly installments of
  $24, including interest, maturing
  in 2004                                                                 1,405                1,691
Adjustable rate industrial revenue bond                                   1,805                1,985
Other notes payable                                                         295                  802
Capital lease equipment obligations; due in monthly
  installments of $13, maturing in 2001                                     267                  408
                                                                         84,004               75,498
Less current maturities                                                   4,118                4,540
                                                                        $79,886              $70,958
</TABLE>

The adjustable rate  industrial  revenue bond is due May 1, 2006 with interest
due monthly at variable rates (6.15% at May 29,1999 and 5.6% at May 30, 1998).
The bond is redeemable at the option of the Company on a monthly basis subject
to certain mandatory redemption requirements.  The bond is collateralized by a
letter of credit of $1,842.


                                     F-11

<PAGE>

The  aggregate  annual  maturities  of  long-term  debt at May 29, 1999 are as
follows:

<TABLE>
<S>                                            <C>
      2000                                     $ 4,118
      2001                                       4,963
      2002                                       5,209
      2003                                       7,254
      2004                                      14,437
      Thereafter                                48,023
                                               $84,004
</TABLE>

The  Company  has a $35,000  line of credit  with three banks all of which was
unused at May 29, 1999.  The line of credit is limited in  availability  based
upon the levels of accounts  receivable and inventories.  Borrowings under the
line of credit bear  interest at 90 basis points above the federal  funds rate
or 90 basis points above LIBOR, at the Company's option. Facilities fees of 25
basis  points per annum are  payable  quarterly  on the unused  portion of the
line.

Substantially all trade receivables and inventories  collateralize the line of
credit and property, plant and equipment collateralize the long-term debt. The
Company is required, by certain provisions of the loan agreements, to maintain
minimum levels of working capital and net worth; to limit  dividends,  capital
expenditures  and additional  long-term  borrowings;  and to maintain  various
current and debt-to-equity ratios.  Additionally,  the chief executive officer
of the Company, or his family, must maintain ownership of not less than 50% of
the  outstanding  voting stock of the Company.  The Company was in  compliance
with these provisions as of May 29, 1999.

Interest of $6,061,  $4,402 and $4,614 was paid during  fiscal 1999,  1998 and
1997,  respectively.  Interest  of $450,  $615 and  $337 was  capitalized  for
construction  of  certain  facilities  during  fiscal  1999,  1998  and  1997,
respectively.

9.    EMPLOYEE BENEFIT PLANS

The Company maintains a medical plan that is qualified under Section 401(a) of
the  Internal  Revenue  Code and not subject to tax under  present  income tax
laws.  Under  its  plan,  the  Company  self-insures,  in part,  coverage  for
substantially all full-time  employees with coverage by insurance carriers for
certain stop-loss  provisions for losses greater than $60 for each occurrence.
The  Company's  expenses,  including  accruals  for  incurred but not reported
claims, were approximately  $3,702, $2,579 and $2,110 in fiscal 1999, 1998 and
1997, respectively.

The  Company  has a 401(k)  plan which  covers  substantially  all  employees.
Participants  in the Plan may contribute up to the maximum allowed by Internal
Revenue Service regulations.

The  Company  has  an  employee  stock   ownership  plan  (ESOP)  that  covers
substantially all employees.  The Company has historically made  contributions
to the ESOP of 3% of  participants'  compensation,  plus an additional  amount
determined at the discretion of the Board of Directors.  Contributions  may be
made in  cash or the  Company's  common  stock.  The  contributions  vest  20%
annually beginning with the participant's third year of service. The Company's
contributions  to the plan were $1,335,  $970 and $1,416 in fiscal 1999,  1998
and 1997, respectively.

The Company has deferred  compensation  agreements  with certain  officers for
payments to be made over specified  periods  beginning when the officers reach
age 65 or over as  specified  in the  agreements.  Amounts  accrued  for these
agreements are based upon deferred  compensation  earned,  discounted over the
estimated  remaining  service  life of  each  officer.  Deferred  compensation
expense totaled $50 in fiscal 1999 and 1998 and $60 in fiscal 1997.


                                     F-12

<PAGE>

10.   STOCK OPTION PLAN

The Company has  elected to follow APB No. 25 and related  Interpretations  in
accounting for its employee stock options  because,  as discussed  below,  the
alternative fair value  accounting  provided for under FASB Statement No. 123,
ACCOUNTING  FOR  STOCK-BASED  COMPENSATION,  requires use of option  valuation
models that were not developed for use in valuing employee stock options.

The Company has reserved  800,000 shares under its 1993 Stock Option Plan. The
options have ten-year  terms and vest  annually over five years  beginning one
year from the grant date.  At May 29, 1999 and May 30, 1998,  272,000  shares,
respectively, were available for grant under the 1993 plan.

Pro  forma  information  regarding  net  income  and net  income  per share is
required by FASB Statement No. 123, and has been  determined as if the Company
had  accounted  for its employee  stock options under the fair value method of
that Statement.  The fair value for these options was estimated at the date of
grant  using  a   Black-Scholes   option  pricing  model  with  the  following
weighted-average assumptions for fiscal 1997: risk-free interest rate of 6.5%;
no dividend  yield;  volatility  factor of the  expected  market  price of the
Company's  common stock of .517, and a  weighted-average  expected life of the
options of 5 years.

The  weighted-average  fair value of options  granted  during  fiscal 1997 was
$4.56. No options were granted in fiscal 1999 or 1998. The pro forma effect of
the  estimated  fair  value  of  the  options   granted  in  fiscal  1997  was
insignificant  to the fiscal 1999, 1998 and 1997  consolidated  net income and
net income per share of the Company.

A summary of the Company's stock option activity and related information is as
follows:

<TABLE>
<CAPTION>
                                                                         Weighted-Average
                                                            Shares        Exercise Price
                                                            ------       ----------------
<S>                                                        <C>              <C>
Outstanding at June 1, 1996                                504,000          $ 3.42
     Granted                                                24,000            4.33
     Outstanding at May 31, 1997                           528,000            3.46
     Exercised                                             (23,000)           3.42
     Outstanding at May 30, 1998                           505,000            3.47
     Terminated                                           (471,000)           3.42
     Outstanding at May 29, 1999                            34,000            4.06
</TABLE>

During  fiscal  1999,  the Company and certain  employees  agreed to terminate
stock  options to purchase an  aggregate  of 471,000  shares of the  Company's
common stock. In connection  with the termination of the options,  the Company
paid $870 to those employees,  which is recognized as compensation  expense in
fiscal 1999, based upon the difference between the fair value of the Company's
common stock and the exercise price of the option.

The weighted average remaining contractual life of the options outstanding was
5 years at May 29, 1999 and May 30,  1998,  respectively.  At May 29, 1999 and
May 30, 1998, 19,600 and 385,000 options, respectively, were exercisable.


                                     F-13

<PAGE>

11.   INCOME TAXES

Income tax expense consisted of the following:

<TABLE>
<CAPTION>
                                        Fiscal year ended
                              May 29          May 30          May 31
                               1999            1998            1997
<S>                           <C>             <C>             <C>
      Current:
        Federal               $2,749          $1,967          $6,502
        State                    250             174             150
                               2,999           2,141           6,652

      Deferred:
        Federal                  (80)            696           2,390
        State                    (12)            109             466
                                 (92)            805           2,856
                              $2,907          $2,946          $9,508
</TABLE>

Significant  components  of the  Company's  deferred tax  liabilities  were as
follows:

<TABLE>
<CAPTION>
                                                        May 29          May 30
                                                        1999            1998
<S>                                                    <C>             <C>
Current deferred tax liabilities:
  Inventories                                          $10,057         $10,641
  Prepaid expenses                                         104             123
  Accrued expenses                                         (10)            (257)
  Other                                                    143             (131)
Total current deferred tax liabilities                  10,294          10,376

Long-term deferred tax liabilities:
  Property, plant and equipment                          7,450           7,168
  Investments                                              214             252
  Deferred compensation                                   (249)           (310)
  Cash basis temporary differences                       2,870           3,185
Total long-term deferred tax liabilities                10,285          10,295
Total deferred tax liabilities                         $20,579         $20,671
</TABLE>

Effective May 29, 1988, the Company could no longer use cash basis  accounting
for its farming subsidiary because of tax law changes. The TAXPAYER RELIEF ACT
OF 1997 provides that taxes on the cash basis temporary differences as of that
date are  generally  payable over 20 years  beginning in fiscal 1999 or in the
first fiscal in which there is a change in ownership control. The Company uses
the farm-price method for valuing inventories for income tax purposes.


                                     F-14

<PAGE>

The differences  between income tax expense at the Company's  effective income
tax rate and income tax expense  (benefit) at the statutory federal income tax
rate (34% in fiscal 1999 and 1998 and 35% in fiscal 1997) were as follows:

<TABLE>
<CAPTION>
                                                       Fiscal year ended
                                             ---------------------------------------
                                             May 29          May 30          May 31
                                              1999            1998            1997
                                             ---------------------------------------
<S>                                          <C>             <C>             <C>
Statutory federal income tax                 $2,715          $2,830          $8,524
State income taxes, net                         156             187             700
Benefit of net operating loss
  carryover for certain states                    -               -            (300)
Increase in federal income tax rate               -               -             495
Other, net (benefit)                             36             (71)             89
                                             ---------------------------------------
                                             $2,907          $2,946          $9,508
                                             =======================================
</TABLE>

Federal  and state  income  taxes of $1,524,  $7,989  and $7,597  were paid in
fiscal 1999,  1998 and 1997,  respectively.  Federal and state income taxes of
$237, $1,090 and $9 were refunded in fiscal 1999, 1998 and 1997, respectively.

12.   OTHER MATTERS

The  carrying  amounts  in the  consolidated  balance  sheet for cash and cash
equivalents,  accounts receivable, notes receivable and investments,  accounts
payable and  long-term  debt and  capitalized  leases  approximate  their fair
value.  The fair values for notes  receivable,  long-term debt and capitalized
leases  are  estimated  using  discounted  cash  flow  analysis,  based on the
Company's current incremental borrowing rates for similar arrangements.

The Company's interest expense is sensitive to changes in the general level of
U.S.  interest rates. The Company  maintains certain of its debt as fixed rate
in nature to mitigate the impact of fluctuations in interest rates.  Under its
current   policies,   the  Company  does  not  use  interest  rate  derivative
instruments  to manage its exposure to interest  rate  changes.  A one percent
(1%) adverse move (decrease) in interest rates would adversely  affect the net
fair value of the Company's  debt by $3.2 million at May 29, 1999. The Company
is a party to no other market risk sensitive instruments requiring disclosure.

The Company issued warrants to purchase  220,000 shares of its common stock to
the  underwriter  of the Offering.  The warrants are  exercisable at $8.40 per
share through December 2001.

The Company is the  defendant in certain legal  actions.  It is the opinion of
management,  based on  advice  of legal  counsel,  that the  outcome  of these
actions will not have a material adverse effect on the Company's  consolidated
financial position or operations.


                                     F-15

<PAGE>

                          SCHEDULE II - VALUATION AND
                    QUALIFYING ACCOUNTS YEARS ENDED MAY 29,
                      1999, MAY 30, 1998 AND MAY 31, 1997
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                       Balance at    Charged to    Write-off    Balance at
                                      Beginning of    Cost and        of          End of
         Description                    Period        Expense      Accounts       Period
 -----------------------------------------------------------------------------------------
<S>                                      <C>           <C>           <C>           <C>
Year ended May 29, 1999:
Allowance for doubtful accounts          $361          $ 51          $360          $ 52
                                         ====          ====          ====          ====

Year ended May 30, 1998:
Allowance for doubtful accounts          $ 62          $361          $ 62          $361
                                         ====          ====          ====          ====

Year ended May 31, 1997:
Allowance for doubtful accounts          $ 31          $ 52          $ 21          $ 62
                                         ====          ====          ====          ====
</TABLE>


                                      S-1

<PAGE>

                             CAL-MAINE FOODS, INC.
                         Form 10-K for the fiscal year
                              Ended May 29, 1999

                                 EXHIBIT INDEX

Exhibit
Number                                    Exhibit

10.11             Wage Continuation  Plan, dated as of January 14, 1999, among
                  Stephen  Storm,  Charles  F.  Collins,  Bob  Scott,  and the
                  Registrant

23                Consent of Ernst & Young LLP.

27                Financial Data Schedule.