There were only a few bids for U.S. raw hides coming out of Asia through Wednesday of last week. On Thursday, many of the offices at the Chinese tanneries reopened after their longish Lunar New Year holidays and things started to pick up. There were a fair number of bids in the market on both Thursday and Friday, most of them at prices that were down from last traded levels by $1.00. By week’s end, after a number counters and re-bids, a respectable number of trades were consummated. Steer hides again were easier for sellers to move than the Cows. Some business was put together on all selections, with the Cow hides taking the deeper of the price cuts. The Export Sales Report for U.S. raw and wet blue hides released last week by the USDA was again on the low-side. However, this report came after a week where sales were greatly affected by the Lunar New Year holidays. Last week’s Cattle slaughter in the U.S. remained under the 600,000 mark. This was the result of relatively-high fed cattle prices and lackluster beef demand, both of which have pushed packer profit margins to nonexistent or into the red. The news coming out of the Lineapelle Leather Fair, which was held in Milan last week, was that the show was well attended. The reports, however, did not sound promising for side leather tanners. We were told that there continues to be too many leather substitutes being used, not only in shoes, but also hand bags and other items for which leather has been a traditional component. Because of last week’s trades, we are lowering what we are calling the FOB plant market prices for the seasonal average weight Big Packer Steer hide selections. For the Heavy Native Steer hide, which pretty much held its own last week, we are going to put their value at between $65.00 and $66.00 per piece. We are placing the Butt Branded Steer selection at a price between $60.00 and $61.00. We are leaving the Heavy Texas Steer hide value unchanged from our quote for the last few weeks at between $52.00 and $54.00 per piece.
The Export Sales Report released by the USDA on February 23, 2018 for the seven-day period ending Thursday, February 15th. indicated 420,000 whole cattle hide, and wet blue equivalents were sold for export during that period. This number is up from the 342,100 unites reported sold the previous week. The exports/shipments during the seven-day period were a reported 441,600 pieces.
Federally Inspected Slaughter, (FIS) for the week ending Saturday February 24, 2018, was estimated to be 572,000 cattle. This number is down from the prior week’s estimated 596,000 head harvested. Year to Date FIS is an estimated 4,734,000 head, which is up 2.2 percent from the same period a year ago.
As of today, all Asian tanneries should be back open after their Lunar New Year holidays. So, we look for more action from those tanners this week and a pickup in the demand side for U.S. raw and wet blue hides. Where hide prices will head is to be seen, but we don’t look for them to move much up or down for the short term. U.S. Steer hide prices have come down over the last few weeks but in small increments, indicating that they remain in decent demand. While demand for U.S. Cow hides, other than heavy selections, has not been as robust as it has for the Steer selections, we see their current price levels for the Cow hides as being attractive to buyers. We for sure expect more action in the market this week, but, we are not sure what prices this activity will generate. Looking forward to a busy week.
Golf Quote
“Looking up is the biggest alibi ever invented to explain a terrible shot. By the time you look up, you’ve already make the mistake.”
– Harvey Penick
