Moark doesn't just lay around; far from taking it easy, the Land O'Lakes subsidiary is one of the top egg producers in the US. It owns about 26 million laying hens (layers) in about a dozen facilities nationwide. Moark's hens produce some 520 million dozen eggs a year, including specialty shell eggs promoted as higher-value, all-natural, cage-free, Omega-3-enhanced, and organic. Fresh eggs are marketed and distributed under private-label and national brand names, such as Land O'Lakes and All-Natural Farm Fresh Eggs. Moark is also is a primary franchisee of the Eggland's Best brand of eggs. Most of the company's eggs are sold as shell eggs to retailers and wholesalers for consumer and industrial use in the US.
Moark's strategy for growth includes expanding its production capacity. To this end, it targets acquisitions in strategic markets as well as businesses that demonstrate proven results and solid management. Late 2011 the company acquired three Maine egg producers, collectively known as Quality Egg of New England. The deal comprised a long-term lease for the companies' egg facilities with an option to purchase. Moark gains a free hand over egg production, processing, and warehousing, plus 3.6 million layers.
The egg business, however, has struggled amid market ups and downs. During 2010 Moark's pretax losses deepened to $27 million from the prior year's $3 million loss. Results were impacted by a one-time $27 million litigation charge, related to allegations that Moark restricted shell egg output to drive up prices. Moreover, the loss in 2009 was mitigated by a gain from a one-time $12 million asset-sale associated with Golden Oval's purchase of Moark's liquid egg operations. Lower egg volumes in 2010 also dragged down performance, although specialty egg production rose modestly led by the Land O'Lakes brand.