Sale prices for all the U.S. Big Packer steer hide selections firmed up last week as tanner interest for U.S. steer hides from the prior week carried over into last week. As last week progressed it became clear that Asian tanners were entering the market to pick up raw material that was priced at levels that were down by as much as 40 percent, on steer hides, from where they were the first of this year. The depth of last week’s demand for U.S. steer hides was very encouraging for suppliers and by week’s end they were able to move their selling prices for their steer hide productions a little higher. It had been sometime since they were able to hold those prices steady, to say nothing of moving them higher. It appeared to us that the demand for U.S. cow hide selections also improved during last week. That demand was not to the degree that we saw for the U.S. steer hides, but again it was encouraging for sellers. We can say that most of the U.S. cow hide trades that took place last week were at steady money. However, we can also say with confidence, that the sale prices for some of the more preferred origin cow hides did move up by $ 1.00 or more. The fact that most of the U.S. cow hides prices are down by about 60 percent from the first of the year must have made tanners think they had better buy something at today’s price levels. It also appeared that traders were active in last week’s market, either covering shorts or taking some long positions. Those long positions we can say are basis on the thinking that prices for the best hide quality of the year are as low as they will be heading into the Fall.
Last week’s U.S. cattle slaughter was estimated by the USDA to have been 640,000 head. That number is in line with expectations. Packer profits remain historically strong and it is expected they will continue to run at their current productions level for now.
Following are our quotes for last week’s FOB plant prices of the seasonal average weight Big Packer Steer hide selections:
- Heavy Native Steer hides between $54.00 and $56.00 per hide, up $ .50 for the week.
- Butt Branded Steer hides $43.00 per piece, up $1.00 for the week.
- Heavy Texas Steer hides $34.00 per hide, up $1.00 from last week’s price.
The Export Sales Report released by the USDA on July 26, 2018, for the week ending Thursday July 19th showed that 530,500 whole cattle hides, and wet blue equivalents were sold for export during that 7-day period. This number is up considerably from the 438,300 pieces reported as sold during the previous week. China with 192,600 pieces purchased was the largest buyer. They were followed by Korea which took 115,400 of the units traded, of which almost all were raw hides. The third biggest buyer was Italy which booked 73,400 of the pieces sold, which were almost all wet blue hides.
The estimated Federally Inspected Slaughter, (FIS), of cattle for the week ending Saturday July 28, 2018, came in at an estimated 640,000 cattle. The year to date the FIS is up 3 % from a year ago.
We would not be surprised to see some, if not all, U.S. Steer hide suppliers raise their asking prices this week. Coming off the increased demand for U.S. steer hides, suppliers must feel much more confident in their ability to increase their sales prices going forward. In the steer hide sellers favor is the fact that the recent increase in demand for their productions has allowed them to stretch their sold ahead positions out further than they had been in some time. If demand from buyers, this week, remains as strong as it has been the last two weeks we believe it will be safe to say that the U.S. hide market has grounded.
Oldies But Goodies
“Last year we couldn’t win at home and we were losing on the road. My failure as a coach was that I couldn’t think of anyplace else to play.”
Harry Neale, professional hockey coach
