Sales of U.S. raw cattle hides picked up last Thursday and Friday after starting off the week rather slowly. Early last week, some suppliers offered a few or no hides at prices that were slightly higher than their last sales levels, while other suppliers put out offering lists that showed multiple selections available at steady prices. These variances in supplier offerings were confusing to buyers, to say the least. Despite the rather large volume of sales that had been reported for previous four weeks, tanners in Asia continue to say that their leather orders are just not there. As a result, these tanners insist that U.S. hide prices cannot go higher and, if anything, should move lower. By week’s end, we came away with the feeling that a fair number of raw and wet blue hides had been traded last week, but not near the numbers sold the two previous week when the USDA Export Sales Reports on raw hides and wet blue hide sales was over 685,000 units. We still feel it was a decent week of trading, especially with some suppliers saying that they were out of the market on some or all their Steer hide selections. Cattle slaughter here in the U.S. has continued its established July pace into August with last week’s FIS being the largest of the year. We don’t expect that weekly slaughter number to change much in the short term, as we anticipate that both cattle feeders and packers continue to enjoy per animal profits, but those profits are shrinking. Overall, we are going to call market prices for Plump, Beef Type, Steer and Heifer hides at the close of business last week steady with the previous week’s closing price levels. That leaves the top end of the Big Packer and equivalent seasonal average Heavy Native Steer hide value at $62.00 per piece FOB plant, and the Big Packer Butt Branded Steer hide price at the end of last week at between $55.00 and $57.00 FOB plant basis. Also unchanged was the Big Packer seasonal average Heavy Texas Steer hide price of between $50.00 to $51.00 per piece FOB plant basis. Although, we should mention that one packer did report late last week that it was able to obtain $53.00 plant for some of its Heavy Texas Steer hides. Trading of U.S. Cow hides followed the same pattern as the Steer/Heifer trading. Not much happened early in the week, but decent volume was put together by last Friday, with prices overall steady.
The Export Sales Report released by the USDA on August 10, 2017 for the 7-day period ending Thursday August 3, 2017 showed that 688,300 whole hides and wet blue equivalent were sold for export during that week. This big sales number followed the also large 685,200 number reported for the week prior to last, as it was expected to be. China was the big buyer booking 380,700 of the pieces sold.
Federally Inspected Slaughter (FIS) of cattle for the week ending Saturday August 12, 2017 was estimated 641,000 head. Up from the prior week’s estimated 634,000 head and the largest of the year. Year-to-Date FIS is estimated to be up 1,099,000 head or 6 % from a year ago.
Over this past weekend, the annual migration of raw material suppliers to Asia began. This group of course includes U.S. raw hide and wet blue hide sellers. These travelers were few but their numbers will grow as we approach the “All China Leather Exhibition” that will take place in Shanghai on August 30th through September 1st. Everyone, suppliers and buyers of raw material for the tanning industry, will be watching the activity generated by these travels, as all will be looking to find market direction as we move into the fall. For the U.S. hide suppliers, we expect some positives to come out of these lead-up-to-the-show visits. It seems that prices for U.S. raw and wet blue hides have stabilized over the last week or so and maybe that is a platform for improved business for all concerned.
Mulligan’s Laws
Strokes always accumulate faster than they can be forgotten.
If your opponent hasn’t played the course before, don’t be a spoilsport and ruin all the surprises.
