Over the past month, U.S. raw hide and wet blue hide sellers have been able to put together a fair number of sales, but not enough to stabilize prices. Last week started slowly, but by the close of business on Friday we came away with the feeling that suppliers had sold enough product to at least put a temporary bottom in the market. By Friday, suppliers were comfortable enough with their positions to say ‘no’ to any lower (and in some cases steady money) bids. Asian tanners, for their part, came in droves to gobble up any Plump Steer hides they could find at or below the $60.00 delivered level. These same tanners continued to blame the lack of shoe leather business for the softness in hide prices. But, they also admitted that they expect shoe leather orders to grow in August, as the normally do. Moving enough product to allow sellers to say no to additional lower bids did not come without pain. Suppliers of both U.S. Steer and Cow hides had to accept prices down anywhere from $1.00 to $4.00 per piece to get out-front. The drop-in prices vary by selections and origin. Heavy Native Steer hide selection held its own, while Branded Steer hide selections took a beating. Therefore, we are calling last week’s FOB plant market price for Big Packer and equivalent seasonal average Heavy Native Steer hides to be $62.00 to $63.00 per piece FOB. Our call on the Big Packer Butt Branded Steer hide price is $57.00 FOB plant basis. The Big Packer seasonal average Heavy Texas Steer hide value fell further than the other branded Steer hide selections last week. With sales of this once popular selection being reported at between $49.00 and $51.50 per hide FOB plant basis. U.S. Cow hide prices were also lower last week by $1.00 to $2.00 per piece.
The Export Sales Report released by the USDA on July 27, 2017 for the 7-day period ending Thursday July 20, 2017 stated that 556,200 whole hides and wet blue equivalent were sold for export during that period. This is a solid number and it is similar to the prior week’s reported 546,200 pieces sold. China purchased a little more that 50 % of the total units sold, as it has the past few weeks.
Federally Inspected Slaughter (FIS) of cattle for the week ending Saturday July 29, 2017 was an estimated 627,000 cattle. For the same week, last year, the FIS was reported at 596,558 animals. Year-to-Date FIS is estimated to be up 5.8 % from a year ago.
Did all the U.S. raw hide and wet blue hide suppliers get out front last week? That, of course, is hard to say, but we can say with confidence that all U.S. suppliers are in much better position than they were prior to last week. We look for weekly cattle slaughter here in the U.S. to continue to run around the 620,000-number for the near term. There are enough fat cattle available to keep packers profitable and running at current, near capacity, levels. We know that historically leather orders start to grow as we move through August, but will those orders come in time and in volume enough to benefit the U.S. hide market? We hope so, but as of today we are still hearing from tanners in Asia that they expect hide prices to continue to fall.
GOLF QUOTE
“Today took as much out of me as any day that I’ve ever played golf.”
– Jordan Spieth, on his final round of this year’s British Open win
