Another week came and went with no big volume sales for U.S. raw and wet blue hide sellers. Last week’s activity in the U.S. hide market, particularly the Steer hide market, pretty much mirrored the last several weeks. Don’t get us wrong, there was some business put together, but not at quantities near a week’s production. There was decent demand for Heavy Native Steer hides and Butt Branded Steer hides, some were traded at steady money and some may have been sold at slightly lower levels, but from what we saw none were sold at higher levels than their last traded price. We heard from tanners in Korea the same lament that we have been hearing for weeks- not enough leather orders. Tanners in China not only complained about Finished Leather orders, but also the continuous pressure they have felt from the environmental arm of their government. Cattle slaughter in the U.S. last week continued to run at close to the 600,000 head per week number. Both cattle feeders and beef packers had healthy profit margins last week. Because we believe that the majority of the Big Packer Steer hides sold last week were done at steady money, we are leaving our value quotes for them unchanged. So, we are calling the seasonal average weight U.S. Big Packer Heavy Native Steer hide price at $78.00 FOB plant basis. We are also staying steady on the seasonal weight Big Packer Butt Branded Steer hide value, calling it $75.00 per piece FOB plant basis. Seasonal average Big Packer Heavy Texas Steer hides were reported to have sold at between $70.00 to $74.00 per hide plant basis. Contracted average weight range may well have effected those quotes. It appeared to us that U.S Dairy Cow hide prices leveled off last week as tanners refused to pay any increase in price. Plump Cow prices however remained on the firm side and still appear cheap when compared to price level of other hide selections.
The USDA’s Export Sales Report released on March 9, 2017 showed net sales of 476,200 U.S. cattle hides and wet blue equivalents for the 7-day period ending Thursday March 2, 2017. This net sales number is up from the 409,400 pieces reported as net sales for export the prior week. China was far and away the leading buyer purchasing 350,800 units or about 75 percent of the reported net sales. Korea was the decent second place buyer booking 52,800 pieces, all of which were raw hides.
The Federally Inspected Slaughter (FIS) for the week ending Saturday March 11, 2017 was estimated to have been 587,000 cattle, which was up a touch from the 581,000 animals processed the prior week. For the same period, last year, the FIS for cattle was an estimated 543,000 head. The Year-to-Date cattle slaughter is up 4.5 percent up from the same period last year.
Can U.S. hide suppliers continue to hold Steer hide prices steady again this week? Well, they will be trying to do so, for sure. But, the lack of sales over the last several weeks may make that task difficult. We think that, although positions have shrunk recently, US Steer hide suppliers will still be reluctant to accepting lower bids. We do feel that U.S. Cow hide sellers are in a much better position to resist any lower bids than are Steer hide suppliers, and that is related to both well sold positions and decent demand, this we feel is surely the case for the Plump Cow hide selections both, Native and Branded. We are moving closer to the end of the month and the Asia Pacific Leather Fair.
Mulligan’s Laws
It’s as easy to lower your handicap as it is to lower your hat size
“Never” wash your ball on the tee of a water hole.
