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Activity in the U.S. hide market slowed considerably last week as a result of the hide market coming off two to three weeks of busy activity. During that active period both tanners and U.S. hide producers were able to improve their positions. Tanners covered their immediate raw material needs while producers saw their sold ahead positions improve to comfortable levels. In the process U.S. Steer hide prices stabilized moving most selections to slightly higher price levels. U.S. Cow hide values that had been stuck at very low levels for a long time also moved up by $1.00-2.00 per piece depending on selection and origin. The USDA has not been publishing the weekly Export Sales Report due to the ongoing federal government shutdown. So, we must judge four ourselves which country of destination was the most active during those busy weeks. We can say with confidence that it was the Chinese tanners. With the sales volume being down last week we believe that last weeks production of U.S. hides was not sold. Sellers were able to obtain steady to slightly higher prices on the hides they traded. U.S. cattle slaughter moved lower again last week although packers profit margin improved from the week before last. Slaughter cattle prices were steady while beef price improved.
Following are our quotes for last week’s FOB plant prices for the seasonal average weight 65/70 lb. Big Packer Steer hide selections:
- Heavy Native Steer hides at $42.00 per piece, unchanged for the week.
- Butt Branded Steer hides at $39.00 per piece, unchanged for the week.
- Heavy Texas Steer hides at $30.00 per piece, unchanged for the week.
Again, this week no USDA Export Sales Report for cattle hides and skins. But it was announced by President Trump last Friday that an agreement had be reached to allow the short term (3 weeks) funding of the U.S. government. We do not know if the USDA will publish a Export Sales Report this Thursday, or if any report will encompass the previous several weeks missing numbers.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, January 19, 2019, was 610,000 head of cattle. Down from the 620,000 animals processed the prior week. The Year to date FIS is an estimated 2,305,000 head which is down 2.5 percent from a year ago.
We do not expect much change for the U.S. hide market this week. We think U.S. hides suppliers asking prices will be steady to slightly higher than last traded levels. We also anticipate that the volume of U.S. hide business that gets done will be like last week or less than a week’s production. Tannery workers in China will began their Chinese New Year trips home this week. So, most tanneries will be shut down by the end of this week and will remained closed for all next week’s national holidays. Korean tanneries will also close from Monday through Wednesday of next week, as they celebrate their Lunar New Year holidays. It must be expected that interest in U.S. hides from its two biggest markets will be slow this week and next. But, for the most part U.S. hide suppliers appear to have well sold positions that will allow them to weather these upcoming holidays.
ANOTHER QUOTE FROM DAVID FEHERTY
“Watching Phil Mickelson play golf is like watching a drunk chasing a balloon near the edge a cliff.” “That was a great shot – if they’d have put the pin there today.”
