Most, if not all, the Asian tanners were back to work full-bore last week. But, their presence in the market did not move the needle on prices for U.S. Cattle hides much, if at all. The feeling we were left with, as last week came to a close, was that a fair number of hides were traded last week, but not a normal week’s production. The interest and sales were made to larger number of destination countries than we had seen for some time, which we view as a positive for the market. For the business that was put together last week on U.S. Steer hides, sales prices varied. Some Steer hide selections were traded at prices marginally lower while others were sold at levels that were marginally higher. The U.S. Cattle slaughter last week came in lower than we had expected it would. This lower slaughter number, we guess, was the result of the fact that Beef Packers margins remained well into the red last week. The USDA Export Sales numbers for raw hides and wet blue were also lower last week. This, however, was expected because the measured period was the Chinese New Year holiday week. Because there was no obvious direction last week as to where U.S. Steer hide prices were headed, we are keeping our quotes as to the value of the seasonal average Big Packer Steer hide selections basically steady with our prior week’s quote. We are calling the U.S. Big Packer Heavy Native Steer hide price at between $76.00 and $77.00 per piece, while we are keeping our quote on the U.S. Big Packer Butt Branded Steer hide at the $74.00 per piece, both prices FOB plant basis. Although there were varying reports of lower and higher priced sales, we are leaving what we consider to be the market value of the seasonal average Big Packer Heavy Texas Steer hide selection at $71.00 per hide plant basis. U.S. Cow hide prices remain on firm footing last week as suppliers remain in well sold-ahead positions. Suppliers of Plump Native Cow and Dairy Cow hides were able to squeeze out marginal price increases on sales they committed to last week, these selections continued to be the most sought after of U.S. Cow hides.
The USDA’s Export Sales Report released on February 9, 2017 showed net sales of 326,600 U.S. cattle hides and wet blue equivalents for the weekly period ending February 2, 2017. This was down about 30 percent from the 469,700 pieces reportedly traded for export the previous week. It also needs to be mentioned that the seven-day period ending the 2nd of February encompassed the Chinese Ney Year holidays. China remained the largest buyer during this period booking 119,000 or about 36 percent of the total sales.
The Federally Inspected Slaughter (FIS) for the week ending Saturday February 11, 2017 was estimated to have been 577,000 cattle. For the same period, last year, the FIS came in at 547,215 head. The Year-to-date cattle knock is estimated to 73,000 head or 2 percent higher than the same period last year.
For this week, we are looking for buyer interest in U.S. Steer hides to increase. Tanners in Asia who were reopening their offices and factories last week and accessing their leather orders and raw material inventories should, we believe, be looking at the U.S. hide market more intently this week. We are guessing that many tanners may have expected to see more weakness in U.S. Steer hide prices than came to pass over the last few weeks. Many of those tanners may now feel the need to buy some raw hides or wet blue to feel comfortable with their raw material ownership. Also, we believe that U.S. Steer hide and wet blue sellers, whose sales over the last few weeks have been less than robust would like to put some sales on the books. Although these Steer hide suppliers may still have good sold ahead positions, those positions have, for sure, retreated. The sellers on the other hand of U.S. Plump Native and Dairy Cow hides, who have for quirt some time, could move whatever they wish with ease. These suppliers should be in a strong negotiating position, when speaking with their customers. Have a good week.
Golf Quote
“You can win tournaments when you’re mechanical, but golf is a game of emotion and adjustment. If you’re not aware of what’s happening to your mind and your body when you’re playing, you’ll never be able to be the best you can be.” – Jack Nicklaus
