In spite of the fact that tanners everywhere, excluding auto upholstery leather makers, continued to complain about their business or the lack of business, all the U.S. Steer hide values moved up by $1.00 or $2.00 last week. It appeared that enough tanners came into the market and finally accepted supplier’s higher asking prices. Those higher asking prices from the supply side were the result of sellers being comfortably sold ahead and facing seasonally low production numbers over the next month or so. The volume of business booked felt to be somewhat less than what was done in each of the two prior weeks, but still was enough to bode well for sellers expectation of the market. At the close of business last Friday seasonal weight Big Packer Heavy Native Steer hides were trading at $73.00 to $73.50 per piece and the seasonal weight Big Packer equivalent Butt Branded Steer hides were bringing $71.00 to $72.00 per hide, both FOB plant basis. Seasonal average weight Big Packer Heavy Texas Steer hides were reported to have sold at between $64.50 and $66.00 per piece FOB plant basis, which would put them up $1.50 to 2.00 per piece for the week. Buyer interest last week for U.S. Cow hides was far less than that for the Steer hide selections. Prices for Cow hide selections were mixed. The Plump/Beef Type, Cow hide sale prices were steady as the production of these selections remained low. Holstein/Dairy Type Cow hides on the other hand struggled a little to find interested buyers. Some of these spready hides remained steady in price while others, depending on weight and origin, declined $1.00 to $2.00 in value.
The Export Sales Report released by the USDA on March 3, 2016 for the week ending February 25, 2016 showed net sales of 569,500 cattle hides and wet blue equivalents. This quantity is up from the prior week’s sales number of 423,100 pieces sold. The number one buyer was China with 285,300 pieces purchased, which is about 50 percent of the total sales. Korea was the second leading buyer with purchases of 101,300 hides and wet blue equivalents.
The Federally Inspected Slaughter (FIS) for the week ending Saturday March 5, 2016 was estimated to be 533,000 cattle, which was almost identical to the previous week’s kill of 534,00 head. For the same week last year the FIS was 535,139 head of cattle. The Year-to-date estimated cattle slaughter is down 1 percent or 53,000 head from last year’s number for the same period of time.
We look for U.S. Steer hide producers to raise their asking prices again this week. They are at least fairly well sold ahead and they expect their production numbers to seasonally decline a bit this month. The question is will tanners be willing to pay more to get raw material? We wonder, with all the negativity we hear from tanners, other than the auto upholstery guys, how hide prices can move higher at this time. Then again we do know that current hide prices are well below last year’s levels and we expect they are not a deterrent to leather sales, it is instead the lack of leather demand that is having a negative impact on tanners today. Will U.S. Steer hide prices go up again this week? Well, we can say with a bit of confidence that they will not go down. We feel the same way about the U.S. Plump Cow hide selection. As for the U.S. Dairy Cow hides, we are not confident at all in trying to predict the direction as to sale price of this selection.
Golf One-Liners
The man who invented golf and said it was enjoyable is the same man who invented bagpipes and said it was music!
Gimme: An agreement between two losers who can’t putt.
