The U.S. hide market was relatively active last week, with plenty of hides on supplier offer lists and plenty of bids submitted by tanners. As has been the case for several weeks, the opening bids from tanners were below steady levels, but suppliers continued to hold their ground. Suppliers’ counters were met with stubbornness from tanners as a bit of stalemate took place. Many bids either went away, or could not be improved upon, but we believe that there were enough hides sold by week’s end to keep suppliers’ positions from dwindling. From the information that we gathered, we don’t believe any Big Packer or equivalent production Heavy Native Steer hide was traded for less than its most recently traded level. This can be attributed to the ongoing demand from auto upholstery tanners. Some of the reports from various reporting services indicated that the other Steer selections were traded in less volume, but no Steer hide sale price was down more than $1.00 per hide. U.S. Cow hide producers found decent demand for both their Native and Branded Plump Cow hide selections, and for some origins, they were able to move their sale prices up by about $1.00 per piece. This was a welcomed development for suppliers of these selections, as this market has seen declining demand for some time now. However, Spready/Dairy Cow hide prices were under pressure all week with only the best quality productions being able to obtain sale prices that were steady with their last traded levels.
The Export Sales Report released by the USDA on January 19, 2018 for the seven-day period ending Thursday, January 11th showed that 636,500 whole cattle hides, and wet blue equivalents were reported as sold for export during that 7-day period. This the first time in weeks that reported sales exceeded the corresponding production/slaughter.
Federally Inspected Slaughter, (FIS) for the week ending Saturday January 20, 2018, was an estimated 615,000 cattle. That Number is very consistent with the previous week’s 611,00 head estimate. Year to Date FIS is an estimated 1,771,000 cattle which is up 2.7 percent from the same period last year.
We expect that U.S. hide suppliers will again be asking steady money for their raw hide selections this week. However, with the Lunar New Year holidays fast approaching, and with many Asian tanners expressing their dislike for U.S. late winter productions, achieving those asking levels will be no easy task. Packers, who are still running with decent per head profitability, are expected to continue to run at over 600,000 cattle per week for the time being. U.S. hide prices are still running roughly 20 percent lower than they were last year at this time. We continue to ask ourselves, with stronger prices for other commodities, a weaker U.S. dollar, and improving economies around much of the world, when will we see an improvement in hide values? We may have some time to wait as we get through the Chinese New Year. One cannot not get away from the fact that overall leather demand remains the culprit, tanners just need to sell more leather. We know they are trying and we hope they are successful.
Golf Quotes
“I’ve never had a coach in my life. When I find one who can beat me, then I’ll listen.”
– Lee Trevino
“The worst club in my bag is my brain.”
– Chris Perry
