The U.S. hide market slowed considerably as China stopped working to prepare for the Chinese New Year holiday. The slow down did not keep some tanners from attempting to buy a few hides last week, hoping that they could bring the market down. Bids in the beginning of the week were on average down $4.00 across the board, and most tanners showed little interest in compromising this week. From the sellers side there seemed to be little interest in bringing prices down just to secure the little amount of business out there. No one could see a reason to take the market down heading into the holiday next week. Many plants operated by the big packers here in the U.S. were closed for a few days this week due to a large snow storm that swept across the mid-western states, making it difficult to get the animals to the plants for slaughter. Supply will be even more limited this week than it was already projected to be.
We would call the prices for U.S. Steer hides as follows: $71.00 for Heavy Native Steer hides, $69.00 for the Butt Branded Steer hide selection and the regular weight Heavy Texas Steer hides at $62.00 per piece, all FOB plant. All these prices are on what would be seasonal/regular weight range hides. Demand for cows was affected by this holiday period just like steers were. There were no price changes this week for U.S. Plump and Holstein cows, any business concluded were at steady prices.
The Export Sales Report released by the USDA on February 4, 2016 for the week ending January 28, 2016 showed net sales of 565,800 cattle hides and wet blue equivalents. That number was almost identical to the previous week’s total of 565,000 pieces sold. China was again the top buyer reportedly purchasing 279,300 total hides and wet blues. Korea was the second largest purchaser of hides and wet blues with 123,600 units purchased. What was most interesting about Korea was that they were actually the largest buyer of wet blue for the week, accounting for 54% of the wet blue purchased.
The Federally Inspected Slaughter (FIS) for the week ending Saturday February 6, 2016 was estimated to be 534,000 head which is down from the previous week’s slaughter of 567,000 head. For the same week last year the FIS was 545,948 head. Year-to-date cattle slaughter of 2.849 million head is 73,000 head, or 2.5%, below the same period last year.
The official Chinese New Year began today and all of China will be celebrating their New Year until February 15 when they re-open for business. Other parts of Asia will be closed for just the first half of the week, but it is safe to say that you should not expect a lot of activity this week. In years past the holiday did not stop tanners from purchasing hides, but in those past years the leather market was better and tanners could not afford to stop purchasing. We look for the market to be quiet this week and for very little change in the price of U.S. hides. With the rough start to the world equity markets in 2016, I think most of China welcomes a break and hopes that the year of the monkey is profitable. To all of our friends in China we would like to say, Gong Xi Fa Cai.
Golf Quote
“Easy. I missed a 20 footer for a 12.”
–Arnold Palmer, on being asked
how he could possibly shoot a 13 on a hole
“I don’t fear death, but I sure don’t like those three-footers for par.”
-Chi Chi Rodriguez
