Genus profits hurt by African Swine Fever; beef prices recover

Genus on Thursday reported lower adjusted pre-tax profits for the four months to end October as it the African Swine Fever outbreak in China hit the animal genetics company.

In an update, Genus said trading in the period under review had seen “continued good progress in ABS, our beef and dairy business, with conditions in some regions for PIC, our porcine business, remaining challenging”.

“African Swine Fever continued to spread across China with over 50 outbreaks in 14 provinces officially reported and unofficial sources indicating much wider impacts across the industry,” Genus said.

“In response, widespread restrictions have been imposed on the movement of pigs in China, constraining PIC's ability to fulfil some customer orders there. In the medium term, Genus believes ASF will accelerate modernisation of pig farming in China, increasing the opportunity for PIC's elite genetics.”

Genus said this would also lead to increased demand from China for pork imports which should benefit producers in North America, Europe and Brazil, where prices recently have been “relatively depressed and volatile”.

“The board currently anticipates that Genus will make further strategic and financial progress and perform in line with its growth expectations for the financial year 2019,” Genus said.

In ABS, higher dairy prices supported profits in Europe, while in the US beef prices improved following their fall in early 2018. Prices and market conditions also improved for Brazilian producers, the company said.