The wave of confidence flowing through the U.S. poultry industry since the middle of 2012 could be described not only as exceptional but unprecedented and unmatched. The WATT-Rennier Poultry Confidence Index continues to rise, reaching new heights in its 17-year history for Q2 2014. Positive factors abound; negative factors are few, fleeting and relatively inconsequential.
Poultry’s Overall Confidence Index at 156.3
The Overall Index now stands at 156.3 (1996=100 baseline) up from 151.8 for Q1 2014. The Present Situation Index for Q2 2014 increased to 176.7 from 161.4, while the Expectations Index was virtually unchanged at 142.7 versus 145.4 for Q1 2014.
The Overall Index has only been higher once, back in 1996, while the Expectations Index breached a new summit in Q2 2014.
A number of factors are driving this optimism:
- Less competition from beef and swine, the former experiencing shortages with the latter battling a devastating disease (Porcine Epidemic Diarrhea Virus -- PEDv)
- Lower feed prices based on a positive grain outlook
- Higher profits (less competition plus lower input costs)
- Encouraging export markets
- Growing consumer economy in which consumers do not foresee a loss of momentum that has built up over the last several months (source: Consumer Confidence Index)
The ability of the poultry market to expand and counteract some of these positive factors is constrained throughout 2014 due to a shortage of broiler breeder eggs.
Confidence up in broiler and turkey sectors
Both the broiler and turkey sectors registered confidence levels above 150 for Q2 2014 – the first and only time this has occurred for both sectors in the same quarter.
Enjoy the good times!
About the Data: WATT PoultryUSA and Rennier Associates deploy the Poultry Confidence Index survey via email to over 340 poultry industry professionals every quarter. The data for this story was gathered from the 83 responses to the May 2014 send. Sixty-five percent of respondents are located in the United States or Canada. The breakdown by species is as follows: Broiler (68%); Turkey (13%); Other Poultry Species (10%); and Other (9%).