Meat+Poultry - October 2018 - 71

E

very two years, MEAT+POULTRY
sponsors a US Processor
Confidence Study. Designed
to take the pulse of the industry,
the study gathers data on company
revenue and confidence, international
sales, industry economic outlook,
gross margins, operations and capital
investing from thought leaders in the
meat and poultry industry.
Cypress Research, a Kansas City,
Missouri-based firm, conducted this
year's survey in May and June. The
sampling of 9,265 meat and poultry
executives from upper- and mid-level
management job positions produced
252 completed online industry surveys.
Companies were categorized
based on gross annual sales for fiscal
year 2017. Companies with less than
$50 million in annual sales totaled
900; 33 companies reported annual
sales of $50 million to $99 million; 55
companies reported annual sales of
$100 million to $499 million; and 74
companies had annual sales of $500
million or more.
Results of the 2018 M+P Processor
Confidence Study show an uptick in
confidence, further proof the industry
is shaking off the Great Recession's
lingering effects and in the face of more
recent political volatility. The recession,
which officially ended in 2009, has
long been held responsible for ongoing
economic pressures, but the industry is
showing optimism and moving forward.
In 2009, 80 percent of those
surveyed cited difficult economic
conditions. A decade later, nearly
90 percent of US meat and poultry
processors offer a positive economic
outlook, a 38 percent increase from
the 2016 study. This year, 60 percent of
respondents plan to embark on major
new capital projects, representing
an average of 9 percent in company
revenue. This is significant when
contrasted with 2009 data showing
capital budgets decreasing year-on-year
by an average of almost 7 percent.
"If we look back to
MEAT+POULTRY's 2009 Capital

Investing Study, economic pressure was
still the single external influence that
most impacted general capital spending
plans that year, a bigger determinant of
spending than food safety or high-input
costs," said Marjorie Hellmer, president
of Cypress Research, Kansas City,
Missouri. "More specifically, tough
economic conditions were affecting
capital equipment decisions for almost
80 percent of industry leaders in 2009."
Greater capital investment
signals collective improvement in
the economic outlook and increasing
industry confidence, translating into
2018 reports of operating at 82 percent
of capacity, compared to 73 percent in
2016. As compared to two years ago, 55
percent plan to add new staff through
the end of the year, a boost from 43
percent in 2016. Revenue expectations
are also up at 7.6 percent compared to
2016 projections of 5.7 percent.

Respondents
who plan to add
new staff:

55% 43%
2018

2016

Automation strategy
12%
30%
22%

INTERNATIONAL IMPLICATIONS
Yet, industry executives still must
wrangle with ongoing concerns of
food safety, changing regulations,
increasing energy/raw material costs
and the overall state of the global
economy. Concerns where the outcome
remains to be seen lie in the steel and
aluminum tariffs announced against
Canada, Mexico and the European
Union by President Trump at the

36%
Fully implemented
Not increasing
Planning/evaluation phase
Implementing automation

Top business concerns, 2018
63%

Lack of skilled workforce

62%

Labor costs

48%

Food safety

38%

Immigration legislation

34%

Regulatory compliance

19%

Global economic conditions

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