The U.S. Hide Market remained firm last week with the values of all selections moving higher. Steer hide prices advanced again by $1.00 to $2.00 per piece. It appeared that a number of tanners who had been sitting on the sideline, looking to buy at the bottom of the market, realized that hide prices were not going to go lower and decided it was time to buy some raw material. We also noticed that some traders were back in the market buying product, whether they were covering some shorts or going long is anyone’s guess, but they were a factor. By Friday of last week, as was the case the previous week, all offerings of Packer Steer hides were sold. The only Steer hides left for sale were what could be considered less desirable productions or off grades. The highest sales price reported to the trade services last week for Big Packer Heavy Native Steer hides was USD 75.00 per piece. Butt Branded Steer hides was USD 74.00 per hide, both FOB plant basis. Rumors in the trade were that some sales had been consummated on these two selections at a dollar or more, higher levels. The reported sales level for Heavy Texas Steer hides was USD 66.00 per hide FOB plant, again there were rumors of this selection being traded, but not reported, at $1.00 to $2.00 higher. Tanner interest in Cow hides also continued to grow last week. We can’t say for certain that Cow hide sellers were able to get more money for their Plump Branded Cow hides but they did get $1.00 to $2.00 price increases for their Plump Native Cow and Holstein Cow hides selections.
The Export Sales Report released by the USDA on August 13, 2015, for sales made during the week ending Thursday August 6, 2015, showed that 410,200 cattle hides and wet blue equivalents were sold for export during that week. This very large number of reported sales was down by almost 65 percent from the previous week’s reported 1,158,500 units sold. China was the biggest buyer taking 221,700 hides and wet blue equivalents or 54 percent of the total sales number. Italy was the next biggest buyer purchasing 62,900 pieces, of which about 85 percent were wet blues. Thailand with 35,000 hides contracted was the third place buyer.
The Federally Inspected Slaughter (FIS) for the week ending Saturday August 15, 2015 was estimated to be 540,000 cattle, up 5,000 head from the previous week’s estimated FIS of 535,000 animals. The FIS for that same week last year was 580,077 cattle. Year to date the FIS is down by 1,299,000 head for the same period a year ago.
We expect that any hide offerings that are made by U.S. suppliers this week will regardless of selection, be at higher prices. We expect there will be enough demand to move hide prices to some degree. U.S. Cattle slaughter this week is expected to continue to be at the same level that it has been all year, and that is down about 7 percent from a year ago. Packers continue to struggle to stay in the black and from all reports if there is a light at the end of the tunnel, it is still to be seen. If packers can’t make a profit, the FIS number will not grow. Tanners on the other hand say that leather orders are not plentiful and that leather buyers are insisting on lower prices for anything they buy. The impact on U.S. hide prices from the devaluation of the Chinese Yuan is yet to be determined, but one must think it can’t be a positive. In the end we expect U.S. hide prices to advance again this week on limited trading.
Golf Joke
Guy comes home after a round of golf. Sees note on the refrigerator written by his wife “This is not working, going to my Mother’s” He opens the refrigerator, light goes on, grabs a beer, its cool. Says to himself, what the hell is she talking about, its working fine.
