February 26, 2021

 

Livestock genetics firm Genus anticipates challenges as it helps restock China swine farms

 

British livestock genetics firm Genus' chief executive said there may be possible short-term challenges as the company helps restock China's swine industry that has been hit with disease outbreaks over the winter, Reuters reported.

 

Genus, which supplies breeding pigs to a third of China's top 50 swine producers, has seen strong growth and increased its market share in China.

 

The company's shares fell 6% on February 25, their biggest drop since May 2020, after Genus projected lower growth and increased currency headwinds in the second half.

 

Stephen Wilson, Genus chief executive, said swine farms in China have been hit by a lot of disease over the winter, making it difficult to maintain the health of the company's swine especially during transport when virus transmission risk is high. 

 

He said there will be possible challenges over the next few months, adding that customers may review restocking plans because of the disease outbreaks. However, Genus has not seen any major changes yet.

 

Wilson said demand remains strong.

 

China's major swine restocking measures have boosted Genus' first half revenues by 6% to GBP 285.7 million (~US$404.6 million; GBP 1 = US$1.40) while profit after tax for the period to the end of December was 26% higher at GBP 30.3 million (~US$42.3 million)

 

Hog futures in China have jumped 10% since launching earlier this year over disease outbreak reports. Some analysts project 20% of sows based in northern China have been affected.

 

Wilson said the company was considering a dedicated fleet of trucks to transport swine as it lowers the risk of disease transmissions and may also develop its own diagnostics to detect infection without false positives.

 

He said the disease outbreaks will maintain high swine prices in China for the medium term and maintain strong demand for genetics.

 

- Reuters