THE HIDE MARKET – JANUARY 29, 2018
The current price ranges for U.S. Steer hides must be agreeable to both suppliers and buyers, it seems, as it was more of the same for the U.S. Steer hide market last week. It must be close to six weeks, now, since we have seen any real movement in the prices of U.S. Steer hides. U.S. packers and dealers appear to be comfortable enough with their sold-ahead positions that they feel no pressure to accept any of the lower bids that they receive from tanners early in the trading week. Instead, they have consistently insisted on their last traded levels, and by week’s end, enough tanners have come to the table and paid those levels that the U.S. Steer hide prices have remained steady. That leaves our estimated FOB plant prices for the Big Packer Steer hides unchanged at $ 67.00 for Heavy Native Steer hides, $ 63.00 for Butt Branded Steer hides and between $ 52.00 to $ 54.00 per piece for Heavy Texas Steer hides. We continue to hear that both auto and furniture upholstery leather tanners continue to be busy, which is good. Although there is still a good deal of discussion regarding the lack of demand from shoe tanners, we have also heard that some shoe upper tanners are seeing an increase in orders. So, things may be starting to improve a bit for that leather sector. If so, it is a positive sign for hide prices, which are still well below levels one year ago. U.S. weekly cattle slaughter number dropped last week to below the 600,000-head level. That was the result of a winter storm which shut down several upper mid-west slaughter plants early in the week. We don’t expect to see a number like that going forward. There are plenty of cattle on feed and Beef Packers continue to have positive profit margins on beef. The U.S. Cow hide market moved through what, on the surface, seemed like another slow week. But, there were rumors in the market for the last few weeks that a couple of the larger U.S. Cow hide suppliers had lowed prices to some of their larger tanner/customers to move volume and put themselves in better sold ahead positions. That could be a short term negative and a longer term positive for U.S. Cow hide prices.
The Export Sales Report released by the USDA on January 26, 2018 for the seven-day period ending Thursday, January 18th stated that 357,500 whole cattle hides, and wet blue equivalents were reported to have been sold for export during that period. This number is down from the 636,500 pieces reported to have been sold for export the prior week. Exports/Shipments were reported to be 506,900 unites.
Federally Inspected Slaughter, (FIS) for the week ending Saturday January 27, 2018, was an estimated 588,000 cattle. That Number is down from the prior week’s estimated 615,00 head processed. Year to Date FIS is an estimated 2,360,000 head which is up 2.4 percent from a year ago.
We are expecting U.S. Steer hide producers to ask for steady to higher prices on whatever they have on their offering lists this week, and we expect those lists to contain fewer selections. Cow hide sellers will, we expect, still have many selections on their offer lists this week. Again, U.S. hides, particularly the Cow hide selections, are relatively cheap compared to a year ago. Furthermore, the value of the U.S. dollar itself is weaker against all major currencies when compared to its year-ago levels. Any effect of the Lunar New Year holidays on the Hide Market should have already been accounted for by suppliers and Asian tanners. So, with Steer hide supply and demand appearing to be in balance we don’t look for any big movement in U.S. Steer hide prices this week. With Cow hides, the picture is not so clear. U.S. Cow hide production, we are told, will decline going forward and with the current market prices for most U.S. Cow selections at what we would call low levels, we would expect demand for them to increase. But, unlike U.S. Steer hides, U.S. Cow hides have a lot of competition in the market place, such as European Cow hides and South American crust.
Golf Quotes
“Man blames fate for other accidents but feels personally responsible for a hole in one.”
– Martha Beckman
“All I could think of was, ‘Good, I don’t have to putt.’”
– Mike Blewett, USC golfer, on a hole in one
