"There are those that fight the war, and there are those that report the war. In my view, in a chicken business the finance and accounting team report the war, and everyone else is fighting it," said Paul Fox, CEO of O.K. Industries Inc. at the United States Poultry & Egg Association 2013 Financial Management Seminar held in Orlando, Fla. This year's seminar brought together financial managers from the poultry and egg industry to discuss current issues impacting the industry.
"The role that finance and accounting plays is unique — reporting the war. It is critical for any competitive company charged with measuring the performance of a very complex vertically-integrated business. In order to be effective in reporting the war, you have to be able to go beyond rote analysis of revenue drivers and cost drivers," Fox said during as his "Top Management Perspective of Poultry Financial Management" presentation. Fox also provided a unique perspective of the acquisition of O.K. Industries Inc. by Bachocho and his role in transitioning and streamlining the financial direction of O.K. Foods in both the domestic and international market.
Dr. Paul Aho, economist for Poultry Perspective, gave an "Economic Forecast" and noted that although the U.S. and other countries had several challenging years due to the drought, he was very optimistic about the future and believed that the U.S. was "finding its second gear."
"We're headed in a good direction after two bad years of low production. Supplies of corn and soybeans are increasing. There will be a reacceleration for the next couple of years," said Aho.
Aho remarked that it was possible that poultry meat consumption will grow, especially in the developing world due to growing population and a growing middle class, specifically in China. "The big news is that poultry surpasses red meat consumption in the U.S. This is as good as it gets," observed Aho.
He also projected that, "Commodity, grain and energy prices will come down, as the world economy improves. That is the opposite of what occurred a few years ago during the recession, which is a sweet spot."
Deborah Perkins, managing director at Rabobank International, provided an overview of global consumer eating trends. She discussed how the growing population in Indonesia, China and India accounts for over 40 percent of the world population growth. She stated that essentially this would provide more of a need for poultry trade. Although food safety has been a concern, specifically in China, Perkins said, "It won't last forever, and there will be growth going forward."
Regarding domestic market consumption, Perkins commented that one of the advantages the poultry industry has over the meat industry is affordability, convenience and the health advantage. Perkins stressed that although poultry companies "have done a good job of educating the public, they still have to find ways to excite the consumers to keep buying these products." She also highlighted the increasing influence of the millennial generation and how a different type of marketing will need to be tailored to entice them to continue purchasing poultry products, such as social media.
U.S. Poultry & Egg Association is an all-feather organization representing the complete spectrum of the modern poultry industry, with a focus on progressively serving member companies through research, education, communication and technical assistance. Founded in 1947, U.S. Poultry & Egg Association is based in Tucker, Ga.