WATT PoultryUSA - January 2012

✔ “Good domestic market and good
prospects for the export market
as well.”
There were also positive comments
related to poor economic condi-
tions for competitive proteins, the
consumer desire for lower-priced
poultry and better corn prices,
although several mentioned that
grain prices remain a wildcard.

Supply/demand and cost
concerns linger

Although the majority of respondents were positive, there was still a sizable minority who felt that key market factors were still negative or had not yet improved to a satisfactory level. These indicators included excessive supply, dampened exports and high and unpredictable input costs (primarily grain and fuel). Recent market data lends some support to these concerns as broiler-egg sets have been recently (from October 15 through November 19) on the rise (see www.WATTAgNet.com/ BroilerTypeEggsSet19SelectedStates).

Summary Confidence in the poultry industry has improved throughout the 2011 calendar year. After reaching rock bottom in the first quarter of 2011, there has been a steady rise in all the key indicators primarily due to improved market fundamentals – decreased supply and higher demand. However, supply is an evolving target that can change quickly, while high grain and fuel costs continue to depress profits. We can only hope that the positive trends throughout 2011 carry over into the new year. ■

Greg Rennier, Ph.D., is president of Rennier Associates, Inc., email greg@ rennierassociates.com.

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