WATT PoultryUSA - January 2018 - 6
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Poultry Confidence Index
BY GREG RENNIER
A new era of optimism in
the US poultry industry?
Spurred on by positive market trends, industry leaders are optimistic
about the future.
High confidence in the poultry industry
(baselines: broiler=1996, turkey=2000)
For the past five years, the WATT/
Rennier Poultry Confidence Index
(PCI) documented an unprecedented
strength and duration of optimism in
the U.S. poultry industry, peaking in
the first quarter of 2015.
I've been waiting for the proverbial ball to drop as nearly always
happens with commodity-related
markets. However, I now believe we
might be entering a second wave.
The Overall Index now stands
at 146.2, up from 140.1 last quarter.
The 100-point baseline reflects the
index recorded in 1996. The Present
Situation Index held steady at 168.6,
compared to 170.9 in the previous
quarter. The Expectations Index rose
to 131.2 from 119.5.
The term second wave was applied
to feminism, colonization and technology to name a few. It's when a movement or trend accelerates its pace and/
or becomes more mainstream.
The current trend of optimism
started in early 2013 and peaked in
early 2015. Since then, it remained
well above normative levels and
recently started to climb again. This
is even more amazing given the
Source: Rennier Associates Inc.
Both the broiler and turkey markets are expected to continue their
optimistic trend in the near term.
challenges faced recently, including three major hurricanes, product
recalls, a changing consumer and
continued activist attacks.
Why this new uptick in confidence? First and foremost, demand
is keeping pace with supply. Steady
chicken prices and favorable input
costs are contributing as well.
In addition, several PCI survey
respondents cited emerging benefits
from recent technological improvements and other capital expenditures.
These enhancements increase productivity, resulting in greater returns.
There also seems to be a resurgence in hiring, due to a need to
staff these new capital projects and
also because of a general changing of the guard as new employees
replace retirees. Many respondents
said they were facing difficulties recruiting qualified personnel.
Finally, we cannot underestimate
the surging consumer market. Stock
markets are contributing to consumwww.WATTAgNet.com ❙ January 2018