Little was heard from Chinese tanners last week. Part of their absence from the U.S. hide market can be attributed to their being out for the Chinese Qingming/Tomb Sweeping holidays. And, part of their absence was due to their anticipation of lower hide prices going forward. Although a few Chinese tanners stuck their heads out late in the week, most of the activity in the market came from other destination countries like Korea, Mexico, etc. During the week, U.S. Steer hides prices did move lower by $1.00 to $2.00 per piece depending on the selection. Of all Big Packer Steer hide selections, the Heavy Native Steer value was the least affected by the downward pressure that existed in last week’s market. The Butt Branded Steer selection appeared to be under more pressure than other Big Packer Steer hide selections. U.S. Cow hides also felt the lack of Chinese tanners active in the market last week. We’re unable to speak to the volume of Cow trading last week, but it did not appear to be a lot. The reported trades on both Dairy Cow and Plump Branded Cow hides were down $1.00 from sales prices reported for the prior week. Still, the lack of shoe leather orders remains the main lament from tanners everywhere. In recent years, the percentage of the world’s leather production that was used for shoe leather has declined. But, shoe leather still amounts to more than 50 percent of all leather produced. So, any reduction in demand for shoe leather must impact the hide market in a similar fashion. The Export Sales Report released by the USDA last week was the second consecutive report showing a respectable number of raw and wet blue hides were reported to have been traded during the prior week. The Federally Inspected Slaughter for last week was reported to have been over 600,000 cattle. We were hopeful that number of hides sold last week would match the kill, but we doubt that was the case. The slaughter is expected to again exceed the 600,000 mark and hold that pace throughout the month. Because of what was reported sold last week, we must move what we are calling the current, FOB Plant, market prices for seasonal average weight Big Packer Steer hides a little lower. We are putting the Heavy Native Steer hide value at $64.00 per piece and the Butt Branded Steer hide at $57.00 to $57.50 per hide. Big Packer Heavy Texas Steer hides were again reported to have been sold at a wide range of prices between $48.00 to $52.00 per hide plant basis. This range is a little too wide for us to comprehend.
The Export Sales Report released by the USDA on April 5, 2018, for the seven-day period ending Thursday March 29nd, stated that a net 616,800 whole cattle hide, and wet blue equivalents were sold for export during that week. This number is down from the 747,100 pieces reportedly sold during the prior week. China was the largest buyer, booking 357,800 pieces or 58 percent of the sales. Exports/actual shipments during the period amounted to 568,400 pieces.
Federally Inspected Slaughter, (FIS), for the week ending Saturday April 7, 2018, was an estimated 615,000 cattle. The prior week’s estimated slaughter number was 594,000 head. Year to Date FIS is up an estimated 2.2 % from the same period a year ago.
The Chinese tanners will all be back to work after last week’s holidays. Since many of them have not been in the market for several weeks, it is our feeling that these tanners need to buy U.S. Cattle hides again. We feel they particularly need to buy U.S. Steer hides, for which substitutes are not readily available. One gets the feeling that the Chinese tanners are holding back their raw material purchases in hope that they will be able buy what they need at cheaper prices if they wait longer. Buying at the bottom of a market is a very elusive goal and history shows it is mostly missed. Greed is a terrible thing.
GOLF QUOTES
“It’s hard to putt when you’ve got snakes in your head.”
– Ernie Els, after he six-putt the first green at the 2016 Masters from three feet to make the first 9 on No. 1 in tournament history
