Poultry's future looks promising despite COVID-19

Somewhat surprisingly, the industry is confident about the future. Not as optimistic as the last few years, but very close to a ‘normal’ level.

(Coffeemill | Shutterstock.com)
(Coffeemill | Shutterstock.com)

We all know the impact COVID-19 has had on the U.S. and poultry economies, not to mention the personal effect on our friends and family. The National Bureau of Economic Research declared that the U.S. officially entered a recession in February 2020 after a record 128 months of expansion.

Confidence dips

This second-quarter 2020 Poultry Confidence Index (PCI) – collected in May 2020 – provides an early pulse of the industry since the disease first appeared and governments restricted movement and trade. Somewhat surprisingly, the industry is confident about the future. Not as optimistic as the last few years, but very close to a "normal" level.

The PCI now stands at 96 (1996=100), down from 121 in the first quarter of 2020. The Present Situation Index – based on perceptions of current business and labor market conditions – fell dramatically from 138 in the first quarter of 2020 to the current 61. The Expectations Index – based on the short-term outlook for income, business & labor market conditions – improved, moving from 110 last quarter to 120 this quarter.

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After the COVID-19 outbreak in early 2020, industry confidence dipped significantly in during the second quarter of 2020.

These findings closely mirrored those of the Consumer Confidence Index from April 2020. The Present Situation Index was on the decline, but expectations rebounded to a "norma"’ level. The percentage of consumers expecting conditions to improve increased from 19% to 40%.

Concern about the future

Although the waning of the COVID-19 disease and government interventions were the main reason for future optimism – along with the accompanying increases in demand from restaurants and foodservice outlets – there were concerns.

First and foremost, many worried the virus might reappear later this year or early in 2021, leading to another shutdown scenario. 

Second, some said it’s been difficult to hire and train new personnel, while others are “making do with the staff we have and are stretching them as much as we can.” I’m confident the industry can handle both issues.

Finally, COVID seems to have negatively influenced the turkey industry more so than their broiler counterparts (indices = 56 and 112, respectively).

Summary

Despite the trials and tribulations caused by the COVID-19 virus and reactions, the poultry industry is confident it will return to normal.  However, it remains to be seen if it will reclaim the extreme optimism of the last several years.

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