WATT PoultryUSA - April 2018 - 6
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Poultry Confidence Index
BY GREG RENNIER
US poultry sector confident
despite profitability worries
Production will certainly grow in 2018, raising questions about an
oversupply situation in the near future.
Top-line confidence trends
baseline = 1996
During the fourth quarter of 2017,
I ventured that the U.S. poultry industry ushered in a 'second wave' of
optimism, strengthening a trend commencing in 2015. Based on several
general economic articles I've read
in the interim, it seems others are
asking the same question: How long
can the good times last? The Federal
Reserve considered this issue by signaling a potential rise in interest rates
to calm a potentially "overheated"
economy (whatever that is).
Quarterly PCI results
Source: WATT/Rennier Poultry Confidence Index, Q1 2018
With that in mind, the WATT/
Rennier Poultry Confidence Index once
again documented another quarter of
high optimism, although there were
slight concerns about future profitability. The Overall Index now stands
at 151.8 for the first quarter of 2018, up
from 146.2 during the last quarter of
2017 (100-point baseline = 1996). The
Present Situation Index rose to 186.2,
up from 168.6 during the fourth quarter
of 2017, while the Expectations Index
held steady at 128.9, up from 131.2 the
Our findings slightly outpaced the
The Poultry Confidence Index documented another quarter of high
optimism, although there were slight concerns about future profitability.
most recent Consumer Confidence
Index, which found "consumers'
assessment of current conditions
decreased slightly, but remains at historically strong levels," and "consumers remain quite confident that the
solid pace of growth seen in late 2017
will continue into 2018."
The outlook for poultry profitability declined during the first
quarter of 2018, from 129.2 in quarter four of 2017 to 116.1 this quar-
ter (down, but still well above normative levels). A looming increase
in bird numbers was the most often
cited reason for this concern.
With predicted increases of 3
percent annually from 2019 through
2021, driven by new complexes,
the respondents were "nervous the
industry will oversupply in the near
future". There were also some conwww.WATTAgNet.com ❙ April 2018