Ukraine's poor weather may have cost MHP more than 37,000 tonnes in wheat production, even though yields are coming in at twice the national average.
The sausages-to-sunflowers group said that its wheat yields on the first 37,000 hectares harvested – the bulk of the crop – had come in at 4.8 tonnes per hectare, 1 tonne per hectare lower than last year's average.
The crop had suffered from the "unpredictably bad weather conditions" which followed up a cold winter with heavy rainfall in parts of Ukraine, and a dearth of moisture in others.
Better than others
However, the yield was significantly greater than the national average of 2.4 tonnes per hectare,.
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MHP 2010 crop yields, Ukraine average, and (last year's result)
Wheat: 4.8 tonnes per hectare, 2.4 tonnes per hectare, (5.8 tonnes per hectare)
Rapeseed: 3.3 tonnes per hectare, 1.7 tonnes per hectare, (2.7 tonnes per hectare) |
"Despite unfavourable weather conditions during July and August, the company's harvest of early grains is good," the Kiev-based group said, adding that the shortfall in production "is expected to be made up by rising grain prices", which had increased by 30% since the end of June.
In rapeseed, a smaller crop for MHP, a harvest yield of 3.3 tonnes per hectare beat both last year's result, of 2.7 tonnes per hectare, as well as the Ukraine average of 1.7 tonnes per hectare.
It also beat the 2.7 tonnes per hectare result announced on Monday by rival farm operator Landkom.
MHP added that it expected a "relatively good harvest" for corn and sunflowers, which are reaped in the autumn.
Poultry inflation
The comments came as the company unveiled earnings up 31% at $67m for the April-to-June quarter, on revenues up 32% at $223m.
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Landkom 2010 crop yields, and (last year's)
Rapeseed: 2.7 tonnes per hectare, (2.7 tonnes per hectare)
Winter wheat (Crimea only): 2.0 tonnes per hectare, (1.6 tonnes per hectare)
Winter barley (Crimea only): 1.9 tonnes per hectare, (1.7 tonnes per hectare)
Mustard (Crimea only): 0.3 tonnes per hectare, (0.2 tonnes per hectare) |
The improvement was fuelled by volume growth enabled by site expansions in sausage production, poultry rearing and sunflower crushing, as well as a 12% quarter-on-quarter rise in chicken meat prices.
This price inflation was expected to continue "through the following months, as a result of the gradual growth in grain prices".
MHP's depositary receipts, a proxy for shares, closed 0.2% lower at $13.98 in London.
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