THE HIDE MARKET – JANUARY 16, 2017
The U.S. hide market remained basically steady for the all the U.S. Plump Steer/Heifer selections last week. While the values of seemingly all the Cow hide selection edged higher during the week. It really seems unusual to us that the U.S. Plump Steer prices have remained steady for as long as they have. One would have to think part of the reason for this would be that we went through the yearend holidays in the U.S. which reduced market activity, contributing to this steady period. Most likely it has more to do with supply and demand being in balance for some time now. Whatever the cause or causes are, in our mind, it is out of the norm for prices of any freely-traded commodity to remain steady for such an extended period of time. All of this leaves us to again quote the FOB plant price for seasonal average U.S. Big Packer Heavy Native Steer hides at $75.00 per piece the U.S. Big Packer Butt Branded Steer hides at $72.00 per piece. The Big Packer Heavy Texas Steer hide selection was again reportedly sold last week at $73.00 per hide plant basis it is our assumption that these were a heavy end selection (Jumbo). The reports from China last week were that their government’s Environmental Authorities have finished with their work down south in Jiangmen, Guangdong, China. It now appears that most of those tanners in Jiangmen who were shut down are now able to resume operations, although some may not ramp up until after the CNY holidays. U.S. cattle slaughter number (FIS) picked up last week moving to well over the 600,000 head as cattle feeders and packers continue to enjoy very positive per head finishing and processing profit margins. As for the U.S. Cow hide selections both Dairy and Plump varieties again drew substantial buyer interest last week. The Dairy Cow selection drew the majority of that interest and suppliers were able to move their sale prices up about $1.00 from their sales the prior week. The Plump Cow hide selections did not see as much interest as Dairy Cow hides, and we attribute this partly to the smaller plump cow production this time of year. Still some sources were able to squeeze out marginal increases in their selling prices.
The USDA’s Export Sales Report released on January 12, 2017 for sales made during the seven day period ending January 5, 2016, stated that 451,600 U.S. hides and wet blue equivalents were sold for export during that period. This is up from the 356,600 pieces reported to have been traded during the prior week. The biggest buyer was again China booking 272,200 of the units sold.
The Federally Inspected Slaughter (FIS) for the week ending Saturday January 14, 2017 was estimated to be 609,000 cattle, up from the prior week’s (which was a holiday week) 537,000 head processed.
Due to the prolonged steadiness in the Plump Steer market, it is our feeling that something should give with the price levels on these Plump Steer hide selections. It just seems natural that we get some price movement on these selections going forward. As for price movement on the U.S. Cow hide selections this week, we remain firmly bullish on the Dairy Cow selections and slightly bullish on the Plump Beef Cow selections both Native and Branded. In our assessment, Dairy Cow hide marketers are over sold and will most likely not offer or sell any additional product unless they can get additional money. The Plump Cow hides have seen improved demand over the last couple of weeks but we feel that is mainly because they remain relatively cheap compared to all of the other U.S. hide selections. Then again we are moving in on the Chinese New Year holidays and the factory shut downs there could reduce the interest in U.S. raw hides and wet blue hides from their number one buyer.
Golf Quotes
“You swing your best when you have the fewest things to think about.”
– Bobby Jones
“I do not want to think. I want to play golf.”
– Santiago Luna
