Growth in US hog numbers, and in emerging markets, helped Genus make-up for a dent to its cattle takings from the American heatwave, which has put the brakes on ranchers' plans to rebuild herds.

The genetics group said that "some softness has been experienced" in its cattle operations in North America, where US ranchers have turned to selling animals for slaughter, or fattening on feedlots, rather than carry the cost of fodder, with grasslands dried up.

Just 25% of US pasture was in "good" or "excellent"condition as of Sunday, down from 51% a year ago, according to the US Department of Agriculture

With soaring corn prices cutting into feedlot margins too, the impact has been to depress prices of feeder cattle, those ready to be fattened, which fell by 1.5% to 147.400 cents a pound in Chicago on Tuesday.

For live cattle prices posted modest gains, as feedlots attempt to pass on higher grain costs, and with heat reducing animals' ability to gain weight.

"The heat is taking weights off the cattle and thus tonnage off the market," broker US Commodities said, while adding that the temperatures were "also causing the consumer to eat less meat".

Hog boost

However, although Genus acknowledged that "there has been a modest tightening of margins" for some of its customers in recent weeks, it flagged growth in its North American hog operations.

The US hog herd had topped 65.8m head as of the end of last month, up 0.8% year on year, official data on Friday showed, with the breeding herd up 1.0% at 5.86m head, a figure higher than the market had expected.

The expansion follows a profitable 2011 for the US hog industry, and profits for 2012 too for those that locked in high futures prices.

The company also said its "profits have improved strongly"in Asia and Latin America –areas it is focusing on under plans unveiled in May by new chief executive Karim Bitar.

"The strategy envisages strong growth in emerging markets, particularly in China, where discussions with potential new customers in relation to porcine joint ventures are progressing well," Genus said.

Market reaction

The group said that it expected to report underlying profits for the year to June "in line with market expectations", although headline numbers would reflect a series of one-off adjustments.

A provision of £20m for pension payouts, plus a £2m charge for a European restructuring, would be more than offset by an upgrade of some£25m to the value of the group's breeding herd.

The statement prompted Panmure Gordon analyst Graham Jones to restate a "hold" rating on Genus shares, with a price target of 1275p.

"Corn prices have spiked higher in the US recently, but at the moment we believe that both Genus and its customers will be hedged, so there is unlikely to be a short-term impact," Mr Jones said.

"But we continue to monitor the situation."

Genus shares closed 0.7% lower at 1254p in London.