Things started slowly last week for the U.S. Hide Market with suppliers asking higher prices, especially for their Steer hide selections, and buyers making bids that were below last traded levels. By the time Thursday rolled around tanners bids started to came closer to what hide sellers were asking, and trades began coming together. Friday’s business was more of the same, with basically all steer hide selections trading at prices that were either steady with their previous levels or up $1.00 per piece. A good part of the business that was booked last week, was done with the Chinese tanners. After their noticeable absence from the market over the last three to four weeks, it appeared that a number of the larger Chinese tanners figured it was time to buy some U.S. hides, both raw and wet blue. Our feeling was that by week’s end, U.S raw and wet blue hide suppliers and traders had sold a week’s production. We would put last week’s trading range for seasonal average Big Packer Heavy Native Steer hides at $73.00 to $74.00, and the trading range for the seasonal average Big Packer Butt Branded Steer hides at $71.00 to $72.00, both ranges FOB plant basis. The trading range for the Big Packer seasonal average Heavy Texas Steer hide selection was considerably wider than the trading ranges for the other Steer hide categories. Sales were reported by Packers anywhere from $63.00 to $66.50 per piece FOB plant. This spread raised a few eyebrows around the hide industry, curious how this selection could have such a disparity. A good number of U.S. Cow hides were also sold last week at prices that we would call steady to down $1.00 per hide. There was interest from Europe and Asia for Plump Heavy Native Cow hides, and Mexico and Asia for Plump Branded Cow hides. Dairy Cow hides found decent demand from both China and Korea.
The Export Sales Report released by the USDA on May 12, 2016 covering the week ending May 5, 2016 showed that only 434,800 hides and wet blue was sold for export during that week. That sales number was lower than the previous week’s sales of 464,200 pieces. China was again the largest buyer for the week accounting for 184,300 hides and wet blues. Mexico was the second biggest buyer booking a total of 109,200 pieces, the majority of which was wet blue.
The Federally Inspected Slaughter (FIS) for the week ending Saturday May 14, 2016 was an estimated 601,000 head, which was slightly higher than the prior week’s 587,000 head, versus 568,000 head processed for the same week last year. The year-to-date FIS cattle slaughter is estimated to be 10,623,000 cattle which is 177,000 or 1.7% more than last year for this same period.
This week will again, like last week, see packers, dealers, and traders, asking higher prices for Steer hides and most likely their Cow hides as well. Our guess is that at least some tanners will, by the end of this week, pay up $1.00 to get the hides they want and need. Reports continue to say that sales for a number of the sectors of the leather industry remain slow. Even though it is hard to make a case for hide prices going up, there does seem to be enough interest in U.S. Steer hides to make us think that they will at least retain their value for now. U.S. Cow hides may be a different case, but they are selling at prices that are on some selections down over 40 percent from a year ago, which makes us believe that the cows are due for a correction in the coming weeks. Hope everyone has a good week.
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If you can keep a smile on our face throughout the whole game while others curse and lose their heads… you must be the caddie.
