With everyone in the U.S.A. back to work last week after the Thanksgiving Holiday shortened week, the volume of sales in the U.S. hide market moved up considerably. Did suppliers sell a week’s production? It seemed as though U.S. Cow hide and Holstein Steer hide producers were able to sell what they wanted. The Plump Steer and Heifer hide producers, even with the number of sales they were able to book, most likely were not able to market a week’s production. There were a number of U.S. hide suppliers with personnel traveling in Asia last week. Normally when these trips are made, some business will be generated. Rumor has it that some business was put together at prices on Plump Steer hides that were down by $1.00 to $2.00. Regarding the actual sales results of this travel, neither prices nor volume are known to us at this time. The Federally Inspected Slaughter number came in well over the 600,000 number last week. Fat cattle prices moved up again last week, and beef packer profit margins remained positive. As long as the margins are there, packers will process as many cattle as they can. Although they were a little more active last week, tanners in Korea other than those producing auto upholstery leather, continued to comment that they do not have sufficient leather orders. The Chinese tanners in general seem to have enough leather business to keep them in need of raw hides. The strong U.S. dollar no doubt has negatively affected some export buyers, like those in Mexico, Italy, and Japan. The ongoing demand for U.S. hides from China has to this point in time, kept U.S. Steer hide prices fairly steady and pushed up prices on U.S. Cow hides. Because of the steady demand from the auto upholstery tanners, we are leaving FOB plant price for Heavy Native Steer hides at $76.00 per piece. The other Big Packer Steer hide selections however did not do as well as the Native Steer hides, so we are moving their values down $1.00. We are putting the market price of Butt Branded Steer hides at between $72.00 and $73.00 per piece plant basis, and the Heavy Texas Steer at $68.00 to $69.00 FOB plant.
The USDA’s Export Sales Report released on December 1, 2016 for sales made during the seven day period ending November 24, 2016, stated that 215,400 U.S. hides and wet blue equivalents were sold for export during that period. This number is down by over 60 percent from the 565,400 pieces reported sold for export during the prior week. China was the big buyer taking 154,400 pieces or about 70 percent of the total.
The Federally Inspected Slaughter (FIS) for the week ending Saturday December 3, 2016 was estimated to be 616,000 cattle up from the previous holiday shortened week’s 551,000 head. For the same week last year the estimated FIS was 555,029 animals. Year-to-date the FIS is up 5.6 percent or 1,486,000 head from a year ago.
After a couple of shaky weeks, we will be looking to see if U.S. Steer hide suppliers can stabilize their prices this week. We look for the slaughter number to remain above the 600,000 number again this week before we get into the Christmas, and New Year’s slowdown. We expect the Chinese tanners to continue to be in the market as their business seems to warrant them being active. We also hope to see some increased action from Korea this week which would indicate that things are somewhat better for the tanners there. We feel that the U.S. Plump Steer hide suppliers have lost a good deal of their sold ahead positions on some productions, but we don’t think those positions have eroded to the point to where these suppliers feel forced to move product at prices that would be below current levels. U.S. Cow hide sellers feel secure with the demand they have had for all of their selections.
Golf Quotes
“Golf is a day spent in a round of strenuous idlenesss.”
– William Wordsworth
“I couldn’t care less who I am paired with”.
– Jack Nicklaus
