All the reports we have heard or read regarding the Asia Pacific Leather Fair held last week in Hong Kong were negative. Not negative to the hide market itself, but rather negative to the leather fair. Maybe it is time to abandon this show all together. We don’t know if it is the timing of the Hong Kong fair or the fact that the All China Leather Exhibition, held in Shanghai in the fall, has taken away from the need for the Hong Kong show. Maybe, there is no longer a justifiable reason for the hide, leather, and leather goods industries, to get together in Hong Kong. No question Hong Kong is a good place to meet, so it is not the location of the show that would cause people to avoid it. There has to be some monetary return to the exhibitors and visitors of any show to make it viable. Whatever the reason for the decline in activity at the Hong Kong show, it seems for sure many a participant will be looking long and hard regarding their future commitment to the Asian Pacific Leather Fair. As for the hide market, we can say with conviction that the standoff between hide suppliers and buyers as to what the value of raw and wet blue hides should be, will be continued this week. Suppliers say that they continue to be in comfortably well sold ahead positions, while tanners continue to say that their leather orders are lacking. With regards to Steer hide prices, there was no supplier or buyer winner last week. It seemed to us, that the prices for all the Steer hide selections remained within their narrow trading ranges of the previous two weeks. For example, we are putting the FOB plant price for Big Packer equivalent Heavy Native Steer hide price at $ 74.00 to $75.00 per piece. We have the Big Packer Butt Branded Steer hide value remaining in the $73.00 to $74.00 FOB plant range. Origin being the determining factor as to where any production fits within these price ranges. The Heavy Texas Steer hide sales reported last week were at prices within the same range they had been the previous weeks. $67.00 per piece FOB plant appears to be the top price of that trading range. Cow hide suppliers had a little bit of a different story to tell as they came away from last week. Those selling Spready/Dairy Cow hides either accepted prices that were down $1.00 to $3.00 from what they had asked, or did not book much if any business. Plump Cow hide sellers fared a little better than those selling Spready type Cow hides. Although their sales were limited, the prices sellers of the Plump Cow hides were able to obtain, were within $1.00 of their most recent trades.
The Export Sales Report released by the USDA on April 1, 2016 covering sales made during the week ending March 24, 2016 showed net sales for export of 375,800 cattle hides and wet blue equivalents. This number is down over 40 percent from the previous week’s 658,700 pieces traded. China remains the main destination for export sales of U.S. hides and wet blue equivalents as they purchased 225,600 pieces or about 60 percent of the total reported to have been traded during the seven day period ending March 24th.
The Federally Inspected Slaughter (FIS) for the week ending Saturday April 2, 2016 was estimated to be 542,000 cattle, up a fraction from the prior week’s revised estimated FIS of 540,000 head. For the same week last year the FIS was 525,000 animals. The Year-to-date FIS cattle slaughter is estimated to be 7,179,000 cattle which is .3 percent above last year’s FIS to date.
This week, we expect that Steer hide suppliers will again be asking more for the product they have available to sell, but will be most interested in maintaining their sold ahead positions. Tanners who as a whole, have limited raw hide inventories, will continue to try to bring Steer hide prices down, but will continue to buy on a hand to mouth basis. Cattle slaughter here in the U.S. is expected to remain around the 550,000 head weekly for now. Any jump in leather orders for heavier aniline leathers, which would require U.S. Steer/Heifer hides for their production, could push prices for those selections higher. We look for the Plump Cow hide selections to hold their own, partly because of the reduced production resulting from producers holding back their Beef type Cows for breeding and heard expansion. Producers of Dairy Cow hides on the other hand need to find more buyer interest.
Mulligan’s Laws
You can hit the ball 75 yards with any club in the bag.
You really only need four clubs to hit every bad shot in golf.
