As last week came to end it was generally felt by those involved that U.S. Steer hide prices had bottomed. Once again there were a large number of buyers in the market for U.S. Steer hides, and from what we could determine a fair number of Steer hides were traded. Some of the trades were likely related to suppliers and tanners agreeing to price levels for new sales that would average down the cost of old more expensive contracts. By Friday of last week most suppliers, packers, and processors had sold all or more of the Steer hides they had wanted to sell. By Friday a number of suppliers had withdrawn from the market leaving additional bids from buyers unfilled. Sale prices for the week were steady to, in some cases, slightly higher levels. A few problems for the hide market do still exist and will continue to effect hide prices going forward. The Chinese tanning industry, which has far and away been the biggest buyer of U.S. raw hides for a good number of years, will continue to be reshaped by environmental issue and cash flow problems. The cash flow problems are a result of reduced leather orders, tighter bank credit for tanners, and liberal payment terms for their leather customers. The recently lower U.S. hide prices did bring in other hide buying countries into the market and that has played part of putting a floor on hide prices. At the close of business on Friday we would call Big Packer Steer hide prices steady with the previous week’s levels: $ 70.00 to $73.00 for Heavy Native Steer hides $70.00 for Butt Branded Steer hides and between $63.00 and $64.00 for Heavy Texas Steer hides. Sales of Holstein Cow hides continue to be so-so with prices remaining steady. Plump Native Cow hides found more buyers last week and contract prices were $1.00 to $2.00 higher than the previous week’s sale.
The Export Sales Report released by the USDA on July 23, 2015 for sales made during the week ending July 16, 2015, showed that 599,700 cattle hides and wet blue equivalents were sold for export during that week, up a little over 9 percent from the previous week’s reported sales number of 549,500 units.
The Federally Inspected Slaughter (FIS) for the week ending Saturday July 25, 2015 was estimated to be 539,000 cattle, almost the same as the previous week’s estimated FIS of 538,000 animals. The FIS for that same week last year was 571,525 head. Year to date the FIS is off by about 6.9 percent or 1,178,000 head from the same period a year ago.
We fully expect that U.S. hide suppliers will come out asking higher prices for any and all hides they offer this week. Will tanners follow these ideas? Our guess is that yes there will be a bit of a bounce for the U.S. hide market, as there will be some short covering by tanners and traders. The bigger question is where will the market go in the next month or so? As mentioned above, problems for tanners in China still exist and will not go away in the near term. On the positive side for U.S. hide suppliers is that cattle slaughter here in the U.S. is predicted to remain on the low side going forward. The entrance or return to the U.S. hide market by tanners outside of China will help to stabilize the market. We are certain that all suppliers and buyers would like to see a more stabilized hide market.
Golf One-Liners
Q: What do you call a blonde golfer with an IQ of 125?
A: A foursome
Golfer: You perhaps won’t believe it, but I once did this hole in one.
Caddie: Would that be one stroke or one day, sir?
