If you were so inclined, you could have sold a lot of U.S. raw or wet blue Cattle hides last week. Of course, in order to do so you would have had to sell at prices that were lower by at least $2.00 per piece than last traded levels.
There appeared to us to be a good number of U.S. raw and wet blue cattle hides traded by last week. Although, in order to put a good volume of sales on the book suppliers had to reduce prices. Steer hide prices took the biggest dip, but the Steer hide selections were the ones that needed to be moved. As a result, Steer hide prices dropped by $1.00 to $3.00 per piece depending on the selection and Steer hides were the selections where the bulk of last week’s business was done. Cow hide sales looked to be a small percentage of the total U.S. hide business put together last week. The trading prices for Cow hides sold were steady to down a maximum of $1.00 per piece. Afterall there is no room for lower prices on some of the Cow hide selections because they are currently at unworkable levels. Meaning that cost for processing and transporting some of the Cow hide selections is higher than some of the prices that were being bid for those items. The Export Sales number reported last Thursday for the prior week was a decent number indicating that the lower prices are for sure getting more tanners in the market buying U.S. raw and wet blue hides. Last week’s U.S. estimated cattle slaughter number that was reported by the U.S.D.A. was down a little from the prior week but still a healthy one. Packers per head profit margins are still being reported to be over $100.00 per head. So, it appears the only things that are putting a lid on the slaughter are plant capacity and limits to the labor pool.
The FOB plant values for seasonal average weight Big Packer Steer hides declined again last week. And, we see those declines to be to the following levels:
- Heavy Native Steer hides at $37.00 per piece, down $2.00 for the week.
- Butt Branded Steer hides at between $30.00 and $31.00 per piece, down $3.00 for the week.
- Heavy Texas Steer hides at $23.00 per piece, down $1.00 for the week.
The USDA Export Sales Report released on Thursday, May 16, 2019 for the week ending Thursday, May 9th. showed 627,200 U.S. raw and wet blue hides were sold for export during that 7day period. China bought 263,100 pieces or 42 % of the raw and wet blue hides reported to have sold during the period. The surprise second place buyer was Thailand with 113,200 pieces purchased.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, May 18, 2019, was 660,000 cattle. That number down a touch from the 664,000 head estimated to have been knocked last week. The Year to Date estimated FIS is up 151,000 head or 1.2% above a year ago.
Did U.S. cattle hide suppliers sell enough product last week to put a bottom in the market? Well, we won’t have the answer to that question until we see what happens in the market this week or next. U.S. hide prices today are at historically low levels so that should continue to stimulate tanners to put some raw material into their inventories. But if tanners don’t have finished leather orders and/or don’t anticipate getting those orders in June then their appetite may be too limited to lift the market. Hoping for the best, which we believe, for all concerned, would be steady hide prices at a minimum. But time will tell. Wishing for a good week for all.
QUOTE FROM THE PGA CHAMPIONSHIP
“I just hope I’m not on the team, I think after this performance, I won’t be on the team. That’s certain. Whoever picks me must be placing a bet, a dodgy bet. I might be retired by then.”
– Eddie Pepperell on the 2024 Ryder cup at Bethpage Black after carding +11 over two rounds at the PGA Championship
