The gradual erosion of U.S. Steer hides prices continued last week, with most selections off between $1.00 to $2.00 per piece. U.S. Cow hide values, on the other hand, were steady to a maximum $1.00 higher per piece. The Heavy Native Steer hide selection was an anomaly, as its value remained unchanged and continues to be buoyed by demand for upholstery leathers. The Branded Steer hide selections all declined to one degree or another. Those declines in the Branded Steer hide selections are attributed to lack of demand for shoe leathers. As per more than one U.S. Cow hide supplier, the reason for the stabilization in U.S. Cow hide prices was because they are just “Too Damn Cheap”. Current Cow hide prices are down by more than 40 percent from a year ago levels. Cattle slaughter here in the U.S. last week was above the 600,000 level but below the corresponding week a year ago. However, the number of cattle reported to be in the feed yards here indicates higher weekly slaughter numbers are just around the corner. The Export Sales numbers released by the U.S.D.A. last week were decent numbers. But, many in the industry insist that some exports, mainly wet blue hides, are not being reported. Rumors that some Asian tanners are pushing suppliers to lower the contracted prices on some outstanding contracts were circling in the market last week. If this is true, we can say that these requests have little or nothing to do with the decline in leather prices and everything to do with the decline in hide prices. As we have mentioned before, Greed is a Terrible Thing and that every action has a reaction.
The FOB plant prices we are currently quoting for the Big Packer Steer hide selections are:
Heavy Native Steer hides at $63.00 per piece. This quote remains unchanged for the third week in a row.
Butt Branded Steer hides at $53.50 per piece. Down $1.50 from our prior week’s quote.
Heavy Texas Steer hides at $47.00 per piece. Down $1.00 from the top of our last week’s report price range. .
The Export Sales Report released by the USDA on April 26, 2018, for the seven-day period ending Thursday April 19th. stated that a net 578,800 whole cattle hide, and wet blue equivalents were sold for export during that seven-day period. This number is slightly up from the net 536,100 pieces reportedly sold during the prior week. Exports/Actual shipments during the week ending April 19th were reported to be 625,500 pieces.
Federally Inspected Slaughter, (FIS), for the week ending Saturday April 28, 2018, was estimated to be 623,000 cattle. This number is slightly down form the 630,265-head harvested during the corresponding week last year. Year to Date FIS for Cattle is up an estimated 216,000 animals or 2.2 % from a year ago.
If U.S. suppliers hope to put a bottom in Steer hide prices, then they need to sell more hides. It is hard, as it should be, to read suppliers sold positions. But, we feel these Steer hide producers are not completely comfortable with their sold position. We saw U.S. Cow hides suppliers, by selling in volume a few weeks ago, put at least a temporary bottom in the Cow hide market a few weeks ago. That, we expect, is what Steer hide producers need to do. One problem they will have in getting much done this week is the May Day holidays, among other holidays, that are observed in various Asian countries this week. But, then again, hide buyers always sleep with one eye open and that eye is always focused on the hide market. Hope all have a good week.
GOLF QOUTE
A great round of golf is a lot like a terrible round. You drift into a zone, and it is hard to break out of it.
– Al Geiberger
Your subconscious knows what your special timing is.
– Kathy Whitworth
