Cattle slaughter in the U.S. moved lower last week, and we expect this trend to continue as we move through the heat of the summer in the northern hemisphere over the next 2 months. From our view point, it appeared that the U.S. Steer hide suppliers had a good week, sales-wise. But, it is debatable as to whether sellers moved a week’s production or not. Sale prices for all the Steer and Heifer selections were down from the prior week’s levels in the range of $2.00 to $3.00 per piece. Sale prices on all the U.S. Cow hide selections were also down by $1.50 to $2.00 per piece. But, the volume of Cow hide sales when compared to production was, in our eyes, not impressive. There were, on Friday, a respectable number of bids in the market that went unfilled. The reason being that those bids were below, many of them far below, what supplier would accept. The news out of China continued to be negative to the hide market. Chinese tanners to talk about their fear of import tariffs on U.S. raw and wet blue hides being implemented by their government as the Trade War continue. In addition, it was heard by some Chinese tanners that the Chinese central government has told customs people at the various Chines ports that all USA goods must be strictly monitored and inspected, and if any problem is found, the goods should be refused to import and returned to the U.S.
USDA’s Export Sales Report that was released last Thursday, June 28th, for the previous week’s activity was not as impressive as those released the two prior weeks. But, it should be noted that the 7-day sales period that was reported last Thursday contained the “Dagon Boast Festival” holiday that was celebrated in China and Taiwan.
Following are our quotes on the FOB plant values for the seasonal average weight Big Packer Steer hide selections as of last Friday:
- Heavy Native Steer hides $58.00 per piece, down $1.00 for the week.
- Butt Branded Steer hides $45.00 per piece, down $3.00 from last week’s average quote.
- Heavy Texas Steer hides between $36.00 to $38.00 per piece, down $ 1.50 per piece for the week.
The Export Sales Report released by the USDA on June 28, 2018, for the week ending Thursday June 21st. stated that 485,900 whole cattle hides, and wet blue equivalents had been sold for export during that 7-day period. That is down considerably from the 638,200 pieces reported to have been sold the prior week. China was the number one buyer contracting for 297,400 of the pieces sold. Korea was the number two buyer booking 98,500 units.
Federally Inspected Slaughter, (FIS), for the week ending Saturday June 30, 2018, was an estimated 646,000 cattle, down from the 664,000 head estimated to have been processed the previous week. Year to Date FIS is an estimated 16,065,000 head, which is up 3 percent from a year ago.
This week, all in the U.S. will be shut down this Wednesday as we celebrate our Independence Day national holiday. And, many across the country will be taking some extra days away from work at the office or factory to take a few vacation days around this mid-week holiday. This shortened week will affect cattle slaughter, which is expected to be around 540,000 head, but should not affect the hide market in any big way. With U.S. hide prices, particularly Cow hide prices, being at current levels must be attractive to tanners. They can buy to average down their raw material inventory or to take an ownership position at these lower price levels. We feel the astute buyers will be active in the market, making the best raw material deals they can.
MAC O’GRADY ON GOLF
“The ball just didn’t go in the hole today, there are times when the ball has its own consciousness. There’s a word called anthropomorphic, which means to bring to life an inanimate object. That golf ball is alive. It has its own character, its own spirit”.
