Activity in the U.S. picked up last week. We saw longer offer lists from suppliers, and an increase in bids from tanners. Steer hide suppliers asking prices were steady to within a $1.00 higher than their most recently traded levels. While at the same time Steer hide buyers tried to move prices lower, bidding down $1.00 to $3.00 per piece. By the end of the week, there were a fair amount of Steer hides sold at or within a dollar of their previous week’s sales levels. Although we did not hear of any U.S. Steer hides being sold for higher than last sales levels, it does not mean that none were. We do think such sales would have been few and far between. One thing that we can say is that at the close of last week, there was still unfilled buyer interest for U.S. Steer hides. We would put the Big Packer FOB value for seasonal average Heavy Native Steer hides at $74.00 per piece and the price for Big Packer Butt Br. Steer hides at $72.00 per hide plant basis. The Heavy Texas Steer hide selection was reported to have sold for as high as $66.50 per hide which is down $.50 from the high reported sale of a week ago. The U.S. Cow hide market was much tougher for sellers than the U.S. Steer hide market was for the Steer hide producers. There were a limited number bids in the market for any of the Cow selections, and those Cow hides that were sold were done at lower price levels. The negative pressure on the Cow hide values as we understand it, is international with producers in Europe, Australia and South America. These supply sources are saying that reduced interest from their tanner customers in China has taken Cow hide prices lower. The Cow hide tanners in China continue to complain about lack of leather orders, low drop split prices, and problems with their banks.
The Export Sales Report released by the USDA on April 14, 2016 covering sales made during the week ending April 7, 2016 showed that 509,000 cattle hides and wet blue equivalents were sold for export during the period. That sales number was up considerably from the previous week’s 343,700 units sold. China was the number one buyer purchasing 240,400 pieces. The second largest buyer was Italy which bought 66,900 hides and wet blue equivalents.
The Federally Inspected Slaughter (FIS) for the week ending Saturday April 16, 2016 was estimated to be 548,000 cattle, up from the prior week’s estimated FIS of 535,000 animals. For the same week last year the FIS was 537,070 head. The Year-to-date FIS cattle slaughter is estimated to be 8,257,000 cattle which is .7 percent above last year’s to date FIS.
We are looking at continued demand for U.S. Steer hides this week. Holding Steer hide prices at their last traded levels may prove to be difficult, as the bulk of the bids we expect will be below those levels. In the same breath, we don’t look for much of a down side on any of the U.S. Steer hide selections prices. Because of the demand for Steer hides that were left open at the close of business last week. We also don’t think any of the Steer hide suppliers are under pressure to move a lot of product. Slaughter in the U.S. remains on the low side and yes, it is expected to increase going forward, but no one expects any big jump in the FIS in the near term. It has to be expected that Steer hide suppliers have already included any expected increase in production into their sold ahead positions, and from what we can ascertain, they feel very comfortable with their positions. On the other hand U.S. Cow hide prices will be looking for a bottom this week. Will it be this week that the Cow hide market does bottom, we can’t guess. The High Point Leather Show is being held this week in North Carolina, and a number of people will be looking for something to come out of that show that will indicate the direction of Cow hide prices. Have a good week.
Mulligan’s Laws
On a course where yardages are marked on sprinkler heads:
There is no sprinkler head within 40 yards of your ball.
The nearest sprinkler head is blank.
While being examined, the sprinkler head will turn on.
