There was not a lot for U.S. hide suppliers to cheer about last week. Korean tanners were back to work last Monday but they were not back in the market in any big way. Chinese tanners started returning to work on Thursday and Friday of last week, but many of them will not be up and running until today. So, all in all, there was not much in buyer interest out of Asia last week. We heard many of the same laments from Korean and Chinese tanners: Leather orders are slow coming, buyer ideas are lower, receipts from their leather customers are delayed, and their banks continue to tighten their lines of credit. By Friday of last week there were a fair number of bids in the market but at prices that were not being entertained by suppliers. There were some U.S. hides traded by week’s end, but it did not appear that there was any real volume moved. The Steer hides that were sold last week were done at prices that were down a $1.00 or so from the previous week’s levels. Big Packer Heavy Native Steer hides were traded at $71.00 to $73.00 FOB plant, while Big Packer Butt Branded Steer hides were reported to have sold at $70.00 and $71.00 per piece FOB plant. The Heavy Texas Steer hide selection was reported to have been sold, depending on point of origin, at prices that ranged between $62.00 and $65.00 per hide FOB plant. These price levels were down about $2.00 from the prior week. As mentioned above, the U.S. Cow hide selections found more buyer interest last week than the Steer hide selections. Plump Cow hides, both Native and Branded found plenty of buyers who would pay steady money. The Dairy Cow producers also found some interested buyers but those buyers were not in the mood to pay prices equal to the previous week’s numbers. As a result, Dairy Cow hides were traded at prices that were down $1.00 to $2.00.
Sometimes government reports just leave you scratching your head. The Export Sales Report released by the USDA on October 8, 2015 covering the week ending Thursday October 1, 2015 showed a net total of 93,200 cattle hides and wet blue equivalents were sold for export during that week. This number included canceled wet blue hide sales of 298,000 units ? Whatever ! The Weekly Exports number (actual shipments) for the week ending October 1st was 479,300 hides and wet blues.
The Federally Inspected Slaughter (FIS) for the week ending Saturday October 10, 2015 was an estimated 557,000 cattle processed. This total is down a fraction from the prior week’s estimated FIS of 571,000 animals processed. For the same week last year the FIS was 564,194 head. Year-to-date FIS is down 6.2 percent or 1,440,000 head from a year ago.
The weekly cattle slaughter number in the U.S. has most likely peaked for the year and will end the year down between 6 and 7 percent from last year’s number. There has not been enough demand for U.S. Steer hides to keep their value from falling by about 35 to 40 percent year to date. It is hard to believe that the current hide prices are the reason for the lack of demand. More likely it is the absence of enough demand for leather that is restricting the demand for hides and resulting in the current lower hide prices. As we all know, when leather gets to be too expensive, end users find substitute materials that they can use in their finished products.
The hide market is searching for stability, the question is – will this be the week it finds it?
Golf Quotes
“Keep your sense of humor. There’s enough stress in the rest of your life to let bad shots ruin a game you’re supposed to enjoy”
- Amy Alcott
“The real way to enjoy playing golf is to take pleasure, not in the score, but in the execution of the strokes.”
- Bobby Jones
