Coming off a better-than-expected week, many felt that the table was set for a good round of business. Suppliers had offer lists that were populated with various items, but it was apparent by the prices they offered that all suppliers felt the market is on very solid ground. Tanners still showed strong resistance to any price increases. In fact, some tanners went away completely if a supplier tried to raise the price even USD0.50. This was not the norm, however, as most tanners were willing to stick around to see if suppliers would again sell this week at the same prices they booked the prior week. We feel that a steady market is a healthy market and if shipments continue to move like they have then we will see no real change in the coming weeks. Shoe business continues to be lackluster, but there seems to still be enough leather orders for shoe tanners to continue to participate in the market each week, albeit in much smaller quantities than we are all accustomed to. The automotive and furniture upholstery sectors continue to carry this market forward, and with the federally inspected slaughter still slightly lower than expected, that may be all this market needs to remain steady-to-firm through the end of the year.
We are going to leave the current values of the various U.S. Steer hide selections unchanged. The FOB plant value for Big Packer and equivalent Heavy Native Steer hides at between $73.00 and $74.50 per hide. The Big Packer Butt Branded Steer hide selection again, at between $71.00 and $72.50 per piece, and the value for Big Packer Heavy Texas Steer hides is between $65.00 and $66.50 per unit. The demand for U.S. dairy and plump cows continues to be very strong due to the aforementioned furniture upholstery market. If there was a case to be made for any part of the hide market to be firm, it would be smart to make that case for the U.S. cow market.
The USDA’s Export Sales Report released on September 22, 2016 for sales made during the seven day period ending September 15, 2016 indicated that 551,500 hides and wet blue equivalents were sold for export during that period. This number is up from the 431,100 pieces reported sold for export during the previous week. China was, once again, the number one buyer purchasing 329,200 pieces or about 60 percent of the total sales.
The Federally Inspected Slaughter (FIS) for the week ending Saturday September 24, 2016 was an estimated 592,000 cattle. That number is up from the 574,412 head processed during same week last year. Year-to-date cattle slaughter is an estimated to be up 918,000 head or 4.4% above the same period last year.
We struggle to find words that we haven’t already used to predict what we will see this week, as all signs indicate that the market will continue to hold steady. If one was to make a case for the market going in one direction or the other, we strongly believe it would have to be made for the hide market to go up. Our reason’s for writing this are that hides are still relatively cheap in today’s market, all suppliers are well sold ahead, inventories are low, and demand from tanners continues to be strong. The slaughter number is expected to decline slowly as the year comes to a close due to the tightening supply of market ready cattle. This is another indication that hide prices have little to no chance of coming down. Although, if any change is on the horizon, we feel that we will not see it this week.
Memorable Quotes from The King, Arnold Palmer
“Golf is deceptively simple and endlessly complicated.”
“What other people may find in poetry or art museums, I find in the flight of a good drive.”
“I have a tip that can take five strokes off anyone’s golf game: it’s called an eraser.”
-Arnold Palmer, b. September 10, 1929 – d. September 25, 2016
