Cal-Maine (CALM -1.44%) recently wrapped up its fiscal year and should report within the next few weeks. The egg company had a tough year, and so have shareholders. Operations are pretty straightforward and boil down to two things: egg prices and Cal-Maine's production costs. Here are items shareholders should be on the lookout for.

Have eggs found a floor, and will they bounce?

Egg prices are at depressed levels, sitting at multidecade lows. That has a direct and very painful impact on egg producers, Cal-Maine included. Revenue and profit have taken a sharp turn for the worse.

CALM Revenue (TTM) Chart

Data by YCharts.

This egg crisis traces its roots a couple years back to the spring of 2015, when avian flu broke out in the Midwest. The U.S. hen flock was devastated, but a quick recovery in numbers and a younger, more productive flock has created an oversupply of eggs. All that extra supply sent prices on the course that got us where we are now.

A flock of brown hens.

Image source: Cal-Maine Foods.

Typical of commodity producers, there isn't much Cal-Maine can do except for control the costs of production and limit egg output. In that regard, Cal-Maine has done a good job and managed a small profit last quarter of $4.1 million, although the year-to-date loss is still at $49.8 million.

The company has also gone on the offensive and purchased several smaller egg farmers in the last couple of years. Investors will want to hear what management has to say about cost-cutting and its outlook on the national egg supply.

An industry evolving

Cal-Maine management has said that specialty egg products are at the heart of future growth objectives. Specialty eggs, which include those from cage-free hens and hens raised organically, represented 41% of total shell egg revenues last quarter, compared with 31% percent the same time last year.

Why the push in this direction? Many animal rights activists have been pressuring the industry to move to cage-free hens, citing overcrowded and filthy living conditions for flocks. Cal-Maine cites higher prices and less fluctuation in prices for cage-free and specialty eggs. For example, the average selling price for specialty eggs was down 5% during the last quarter versus a 39% decline for non-specialty eggs. Not exactly an animal rights activist's reasoning, but the results align nonetheless.

In the last earnings release, the company said that many of its retailer, food service, and national restaurant customers have made it a goal to be 100% cage-free in the near future. Making that transition to meet demand will require investments, but Cal-Maine thinks there's opportunity to take advantage of the movement. A Cal-Maine joint venture in Texas is expected to reach full capacity in the production of cage-free eggs later this year.

Investors should look for the numbers showing a further move toward the specialty egg business.

Three boxes of specialty eggs: cage-free, organic, and nutritionally enhanced.

Image source: Cal-Maine Foods.

Things can only get better... right?

In defiance of industrywide difficulties, Cal-Maine has managed to make the best of its situation. During the last quarter, the company reported a slowdown in growth of the national hen population, so there is the possibility that investors will get some positive news to mull over that could affect the outlook for the next fiscal year.