Don’t know where the strength in the Branded Cow hide value is coming from but it was there last week. All involved in the hide and leather business know that the FOB plant value of a Branded Cow hide has been, for what seems like a year now, below its processing costs. But, over the last couple of weeks tanners have come into the market and raised the FOB plant value of the Southwester Branded Cow hides up to a breakeven level.
the hthe We are going to call last week’s hide market active. Most U.S. hide suppliers had fewer items on their offer lists last week than they have been showing recently. That was in the face of the high U.S. cattle slaughter numbers (FIS) last week, which we have still been seeing recently. Notably absent from offer lists once again were the Dairy Steer and Cow hide selections. U.S. Plump Steer/Heifer hide producers had no trouble moving the product they wished to sell. The lack of offers did not stop tanners from bidding, and fair portion of the bids last week were on the items that were not offered. Suppliers were not able to move their selling prices even a little bit higher than their last traded levels, although suppliers remain in good enough position to pass any bids which were below steady. The demand for Holstein Steer hides was still large even though suppliers really do not need to sell them. It is our feeling that any Holstein Steer hides that were in fact traded were moved at higher levels. The interest in Dairy Cow hides remained strong enough last week to keep suppliers well sold ahead on that item. And, in some cases, Dairy Cows obtained small improvements in their sale prices. Tanner interest in Plump, Beef Type Cow hides remained good and strong, but tanners bidding on these selections would not raise their bid prices, and with suppliers being in what they said were comfortable sold positions, little business appeared to have been put together on Plump Cows last week. As you can see from the below, both the USDA’s Export Sales Report for U.S. raw and wet blue cattle hides and the USDA’s Federally Inspected U.S. Slaughter (FIS) of Cattle reported last week were large numbers. We figure that these two numbers pretty much offset each other as far as the hide market is concerned.
Below are our current per piece FOB plant price quotes for seasonal average weight Big Packer Steer hides:
– Heavy Native Steer hides at $38.00 per piece, unchanged for the week.
– Butt Branded Steer hides at $35.50 per piece, unchanged for the week.
– Heavy Texas Steer hides at $26.00 to $27.00 per piece, down $.50 per piece for the week.
The USDA released its Export Sales Report on U.S. Cattle hides last Thursday for the week ending Thursday, December 5th. The report showed combined U.S. export sales, for shipment this year and next, to be 706,800 raw and wet blue U.S. cattle hides. This number is up from the 622,500 pieces reported to have been traded the prior week. China remained the number one buyer, booking 398,600 or about 56 percent of the sales.
The USDA estimated Federally Inspected Slaughter (FIS), for week ending December 14, 2019 to be 662,000 cattle. That number was down just a touch from the prior week’s estimate of 679,00 head processed, which was the highest weekly estimate of this year. Year to date, FIS is an estimated 31,690,000 head which is up 1.1 percent from last year.
Late last week’s Beijing and Washington announced that they had reach agreement on Phase One of their ongoing Trade negotiations. Included in the announcements was the confirmation that the additional tariffs that were to be enforced as of yesterday, December 15th, would not go into force. The Phase One agreement and the canceling of tariffs just can’t be bad for the U.S. hide market or the Chinese leather industry. Will U.S. hide prices suddenly jump up? We don’t think so, but the fact that progress is being made toward an agreement between Beijing and Washington has to be a positive for the market. Have great week.
GOLF QUOTE
Golf is 20 percent mechanics and technique the other 80 percent is philosophy, humor, tragedy, romance, melodrama, companionship, camaraderie, cussedness and conversation.
- Gantland Rice
