Corn is currently trading at $3.80 per bushel, its lowest for four years due to favourable weather conditions creating an estimated one billion tonne harvest in 2014. The falling price of corn, sometimes referred to as maize, is good news for the livestock industry and for animal nutrition specialist Genus (GNS).

Lower feed costs mean many farmers won’t be spending so much on corn-based feed, so they have more cash to spend on Genus’ genetically-enhancing products that help produce healthier and faster-growing animals. 

GENUS - Comparison Line Chart (Rebased to first)

Falling pig prices in China, one of Genus’ main markets, and the Porcine Epidemic Diarrhoea virus sweeping livestock across North and Central America, contributed towards recent earnings downgrades. However, a lot of bad news is now in the stock, which has fallen 23% since its £10.82 high (16 Jan).

Broker N+1 Singer lowered its adjusted pre-tax profit forecast for next year by 3.8% to £42.8 million on £382.4 million sales, a 1.7% cut. For the following year its profit estimates drop 3.9% to £47.3 million while turnover decreases 1.6% to £400.8 million.

Issue Date: 23 Jul 2014