U.S. Plump Steer hide values dropped another $1.00 or $2.00 last week as tanners that entered the market were able to outlast suppliers in their tug-of-war over prices. It is hard for us to say how many Steer hides were traded last week. With the fact that larger slaughter numbers are expected in the U.S. as we head toward the grilling season, we suspect hide and wet blue suppliers did not sell the numbers of Raw hides and Wet Blues they had wished to. All tanners, especially the Chinese furniture leather and shoe leather tanners, continue to complain about the lack of orders and the continually poor drop split market. As a result of the activity last week, we are lowering the FOB plant values of the seasonal average Big Packer Plump Steer hide selections to the following levels: Heavy Native Steer hides at $71.00 to $73.00 per piece, Butt Branded Steer hides at $70.00 per hide and Heavy Texas Steer hides at a range of $64.00 to $65.00 per unit. We should mention that the Holstein Steer hides remained in good demand, as tanners need the best grain quality they can get their hands on. Even in a sloppy leather market, one can still find buyers for the high end material. The U.S. Cow hide suppliers did see an increase in buyer interest last week, and sale prices were pretty much in line with the prior week’s levels. Like the Steer hide sellers, it does not appear that they were able to sell enough product last week for us to say that U.S. Cow suppliers are now comfortably sold ahead. One good note for the U.S. Cow hides producers was that European Cow hide suppliers have indicated they are able to move their productions domestically, meaning they will not be looking to sell as much into Asian markets.
The Export Sales Report released by the USDA on April 21, 2016 covering sales made during the week ending April 14, 2016 showed that 641,600 cattle hides and wet blue equivalents were sold for export during the period. That sales number was up considerably from the previous week’s 509,000 units sold. Korea was the number one buyer purchasing 229,600 pieces. Of that total 155,700 of the units were reportedly wet blues, this is a real head scratcher. China was the next most active buyer with 216,900 hides and wet blue equivalents.
The Federally Inspected Slaughter (FIS) for the week ending Saturday April 23, 2016 was an estimated 587,000 cattle, up a chunk from the prior week’s estimated FIS of 548,000 animals. For the same week last year the FIS was 548,000 animals. The Year-to-date FIS cattle slaughter is estimated to be 8,748,000 head which is 1.1 percent above last year’s to date number.
This week should give us a pretty good idea as to where the U.S. Steer hide market is headed. U.S. Steer hide prices continue to run about 25 percent down from a year ago levels. With slaughter numbers here in the U.S. set to move a little higher going into the spring, it comes down to tanners getting enough leather orders to push hide demand higher and therefore stabilize hide prices. Can they do that? We should know soon. Again, on the good side for suppliers here, when leather business gets tough it is always the higher quality, better grading leathers that remain in demand. That bodes well for U.S. Steer hides. Where else, other than the U.S. can tanners buy hides in volume, that grade well and have good substance? U.S. Cow hide producers will continue to try and hold prices steady this week, but that may not be easy. Prices on both the Plump and Spready Cow hide selections are off by 40 percent from a year ago levels, but the problems that Chinese tanners continue to complain about may keep them there. We hope things improve for tanners in the form of more leather orders, and that would be best for all concerned.
Golf Quotes
“People are always wondering who was better, Hogan or Nicklaus. Well I’ve seen Jack watch Ben practice, but I never saw Ben watch anybody else practice. What’s that tell you?”
- Tommy Bolt
