The recovery in hog markets, which has driven Chicago prices to a record high, has provided a fillip semen group Genus by encouraging farmers to upgrade their herds.

The livestock genetics company said its North American porcine business had "traded well" in 2010, as the glow from a doubling in prices of Chicago hogs in nine months revived farm incomes.

"[The division] is now experiencing increased demand from customers to update the genetics in their herds as confidence in the strength of the market recovery grows," Genus said.

Record prices

The revival follows a sustained period of difficulty for hog producers, hit first by higher feed costs, during the 2008 grain price spike, in and then lower meat demand as recession took hold.

Genus noted in February that hog farmers had been saving cash "by deferring the updating of the genetics in their herds", besides making deep cuts to animal numbers.

The cutbacks, coupled with a revival in demand fostered by economic revival, was credited for the rise in hog prices above 90 cents a pound in Chicago last week.

Chinese setback 

The improvement in Genus's hog market fortunes in the US contrasted with a decline in China, where farmers are battling soaring corn prices which have returned the country to importing the grain.

"Chinese… porcine performance was reduced by low pig prices," Genus said.

Sales of dairy semen in North America were also soft, curbed by milk prices which, while significantly higher than last summer, "remain below the cost of production for most farmers".

However, with beef semen sales "relatively buoyant", and demand improving in Latin American operations, the group said it was sticking by forecasts for results for the year to the end of next month.

"The trading outlook for the remainder of the year remains in line with the board's expectations and the board remains very positive about the Group's long-term growth prospects," the group said.

'Superior product offering'

The statement was well received by analysts at Panmure Gordon, whop lifted from 740p to 800p their rating on Genus shares.

"The tone of the [statement] is, in our view, more positive," the broker said.

"The fundamentals at Genus remain very strong, with a quantifiably superior product offering and an unrivalled distribution capability."

 Genus shares closed up 4p higher at 724p in London.