Poultry production cuts stimulate
n last quarter’s WATT/Rennier Poultry Confidence
Index, there were hints that con;dence was going to soon
rebound following a historically low ;rst quarter. These
positive thoughts did indeed carry over into this current
quarter as respondents cited production cuts coupled with
The Overall Index now stands at 94.3 (1996 = 100), up
from 79.0 the previous quarter. The Present Situation Index
Top-Line Con;dence Trends (baseline=1996)
Top-Line Confidence Trends: After reaching rock bottom in the first quarter of 2011, there has been a steady rise in all the key indicators.
held steady at 73.8, an inconsequential decline from 74.2. Finally, the Expectations
Index moved from 82.1 the prior quarter to
107.9 this quarter.
This increased con;dence is in contrast
to the Consumer Con;dence Index which
has fallen for six consecutive months, now reaching levels
last seen during the 2008-09 recession. Consumers expressed
concerns about business conditions, the labor market and
Production cuts buoy sentiment
The biggest moves in the PCI were in the Future
Conditions sub-category (from 64.1 to 122.0) and, not surprisingly, the related Future Pro;ts sub-category (from 89.6
to 104.4). As stated earlier, these positive gains were primarily related to production cuts and expectations for increased
demand of poultry both domestic and abroad.
Some speci;c comments:
✔ “Volume reductions should be in place and hopefully
inventories as well.”
✔“Surely the industry will further cut placements.”
✔“Production cuts by the industry will improve markets.”
Category Con;dence Trends (baseline=1996)
Category Con;dence Trends (baseline-broiler=1996, turkey=2000)
Category Confidence Trends: The biggest moves in the PCI
were in the Future Conditions sub-category and the Future Profits sub-category.
Category Confidence Trends (Broiler/Turkey): Confidence
among turkey industry respondents rose to 110.0, significantly higher than the 89.6 for broiler industry respondents.