Last week was a holiday shortened week here in the U.S., with last Monday being “Labor Day” one of our national holidays. Most everyone who had been in Shanghai the prior week for the ACLE was back in their office by last Tuesday. The report from those who attended the show was that the ACLE was slower than expected, but still well worth attending. Most attendees with whom we have communicated, be they raw material supplier or tanner, stated that their company would for certain be represented at next year’s show. From what we could gather, the amount of raw material business that was actually done at the show itself was limited. On the other hand, there seemed to be a good deal of raw hide and wet blue business put together last week. Some of that business was carryover from the show, and the rest was generated last Tuesday through Friday. It appeared to us that most suppliers were able to sell a week’s production last week. Sale prices for the U.S. Steer hide selections were basically unchanged from the prior two weeks. U.S. Cow hide prices however, did move up on an average of $1.00 per piece on the heels of strong demand from upholstery and handbag leather tanners. U.S. Cattle slaughterers remain busy, so the demand in the market was strong enough to keep Steer hide prices steady and Cow hide prices steady to firm, which was good news for packers. One negative for both hide and wet blue sellers and buyers was the shipping problems created by the Hanjin Shipping bankruptcy. This problem which has effected the movement of product that is on Hanjin vessels, whether booked directly with Hanjin or with one of their vessel sharing partners, will take time to sort out. Eventually this cargo will arrive at destination, but the questions are when and at what additional cost. As we said, U.S. Steer hide prices were unchanged last week. We are leaving the FOB plant value for Big Packer and equivalent steer hide at between $73.00 and $74.00. We are also leaving the FOB plant value for the Big Packer Butt Branded Steer hide selection at between $71.00 and $72.50 per piece. The FOB plant value for Big Packer Heavy Texas Steer hides was also unchanged at between $65.00 and $67.00 per unit.
The USDA’s Export Sales Report released on September 9, 2016 for sales made during the seven day period ending September 1, 2016 indicated that 338,500 hides and wet blue equivalents were sold for export during that week. This number is down considerably from the 573,700 pieces reportedly sold for export during the prior week. China was the number one buyer booking 246,900 pieces during the period.
The Federally Inspected Slaughter (FIS) for the holiday shortened week ending Saturday September 10, 2016 was an estimated 528,000 cattle. That number is up from the 500,537 head harvested during same holiday week last year. Year-to-date cattle slaughter is an estimated to be up 4.4 percent from a year ago.
After coming off a rather good week in sales, we look for U.S. hide and wet blue traders to raise their asking prices this week. How tanners respond to those higher asking prices will dictate the amount of activity there will be in the market this week. We don’t see any supplier of good quality U.S. hides, be they a Steer or a Cow selection, in a situation that would entice them into accepting anything less than their last sale prices. Tanner’s leather prices and sales backlogs may not be where they would like them, but this is the time of the year when we would expect their business to improve. As we often say, we are right about 50 percent of the time, so let us see how things actually develop this week.
Golf Quote
There is no royal road to success. The path is not an easy one, which is one of the chief reasons why golf has such an enduring lure.
- Walter J. Travis
