Last week came and went without the big week of sales that we anticipated for the U.S. raw hide and wet blue markets. Based on the number of bids in the market last week, we can say that tanners in all the major markets for U.S. Steer hides were interested in buying some raw material. But for the most part, they were not interested in paying U.S. suppliers’ asking prices for those Steer hides. Although there were some isolated cases where producers received small price increases for certain Steer hide selections from preferred productions, overall, we must call the prices paid for U.S. Steer hides steady to slightly weaker. In the end, we must speculate that another week went by without Steer hide suppliers selling a week’s production of raw hides and/or wet blue hides. We continue to hear from Asian tanners that the shoe leather business continues to lag. Shoe leather tanners tell us that there are not enough orders in the market, and too many tanners looking for orders for any one tanner to get leather buyers to raise the price they will pay for finished leathers. The auto upholstery tanners are staying busy, as are the furniture upholstery people and handbag tanners. But, they all mention that their profit margins are squeezed between higher hide prices and un-improved finished leather prices. Also on the minds of the Chinese tanners is their governments ongoing efforts to cut down tannery pollution. U.S. Cattle slaughter last week was up a touch from the prior week. Beef packer’s, fat cattle processors, margins improved bringing them close to breakeven last week. This was because packers could get more for the beef they sold. U.S. Cow slaughterers have stayed busy over the last couple of months, and consequently, they have produced a good number of hides, which has been met by good demand from upholstery and handbag tanners. The value of the seasonal average weight U.S. Big Packer Heavy Native Steer hide remained unchanged again last week at $78.00 FOB plant basis. The value of the seasonal weight Big Packer Butt Branded Steer hide however slipped $1.00 to $75.00 per piece FOB plant basis. Hard to put a finger on the value of the Big Packer Heavy Texas Steer hide. It seems they have been thinly traded, with more pieces being wet blued recently. U.S Cow hide prices were, for the most part, steady to a little higher last week. However, some in the trade have mentioned that they were feeling that U.S. Cow hide prices may have or soon will top out.
The USDA’s Export Sales Report released on March 2, 2017 showed net sales of 409,400 U.S. cattle hides and wet blue equivalents for the 7-day period ending February 23, 2017. This net sales number is off considerably from the 582,200 pieces reported as net sales for export the previous week. China was the big buyer taking 184,400 pieces of the reported net sales. Korea was the second largest buyer credited with booking 82,400 units all of which were raw hides.
The Federally Inspected Slaughter (FIS) for the week ending Saturday March 1, 2017 was estimated to be 581,000 cattle, which was up from the 575,000 animals processed the prior week. For the same period, last year, the FIS for cattle was an estimated 537,000 head. The Year-to-Date cattle slaughter is higher by 4.2 percent for the same period last year.
For the last three or four weeks, we have been expecting to see a week where U.S. raw hide and wet blue sellers would put together a good round of trading with their tanner customers. We have had the feeling that U.S. Steer hide suppliers forward sold positions have shrunk over the last month and that tanners’ raw hide owners ship has also deteriorated during the same period. But, maybe that is not the case, could it be that a good deal more trading has gone on than has been indicated on the weekly USDA Export Report? Then again, maybe this will be the week where sellers and buyers put together a large volume of business.
Time will tell.
Mulligan’s Laws
The practice putting green is either half as fast or twice as fast as all the other greens.
Two thirds of the holes are uphill.
