U.S. hide prices fell again last week. Though it is our feeling that a fair number of hides were traded during the week, we still don’t think that suppliers were able to move a week’s production. Last week’s cattle slaughter number in the U.S. remained steady with recent weeks at well over the 600,000-head level, and we just don’t believe that U.S. raw and wet blue hide suppliers sold that many units. Tanners, other than the auto upholstery tanners, continue to say that there are not enough leather orders around and that leather prices are extremely competitive. All of this adds up to lower U.S. hide prices. Overall, the prices that suppliers were able to obtain last week for Steer/Heifer selections were down $1.00 to $2.00 per piece from their prior week’s trading levels. Rumors, and we emphasize rumors, were circulating that some of the Big Packers again sold large blocks of hides to some of the larger tanners in Asia at price levels that were well below the reported market levels. Who knows? But, as they say, “where there is smoke there is fire”. As a result of the sales reported last week, we are dropping the FOB plant prices for Big Packer and equivalent seasonal average Heavy Native Steer hides to $63.00 per piece. We are also lowering our call on the Big Packer Butt Branded Steer hide value to between $60.00 to $61.00 per hide, FOB plant basis. It appeared to us that the Big Packer seasonal average Heavy Texas Steer hide took the worst beating of all the Steer hide selections last week. Therefore, we are lowering our call price on that selection to between $56.00 and $58.00 per hide, FOB plant basis. U.S. Cow hide sale prices also moved lower last week on selections by anywhere from $1.00 to $2.00 per piece.
The Export Sales Report released by the USDA on July 20, 2017 for the 7-day period ending Thursday July 13, 2017 showed that 546,200 whole hides and wet blue equivalent were sold for export during that week. China was the number one buyer taking 283,100 pieces or a little more that 50 % of the total sales.
Federally Inspected Slaughter (FIS) of cattle for the week ending Saturday July 22, 2017 was an estimated 622,000 cattle. This number is down slightly from the prior week’s revised estimate of 628,000 head. For the same week, last year, the FIS was reported at 596,558 animals. Year-to-Date FIS is estimated to be up 5.9 % or 949,000 cattle from a year ago.
With U.S hide prices at their lowest levels in around eight years, price is not the reason suppliers are struggling to move their productions. Cattle slaughter here in the U.S. is up by nearly 6 % from a year ago, and we expect it will continue to run at this level for the foreseeable future. But, this slaughter level is still not near historical highs, and again, the high slaughter is not the reason for hide prices moving lower. Demand is the culprit! What is needed to steady the U.S. hide market are leather orders for its tanner/customer base. All involved in the hide and leather industry know that the orders will come, but the question remains- when?
GOLF QUOTE
“That son of a bitch was able to hole a putt over 60 feet of peanut brittle.” – Lloyd Mangrum, on Bobby Locke
“Bad? I’ll tell you something bad about Gene Littler. He putts too damn good.” -Doug Sanders, asked if he had anything negative to say about Gene Littler
