By the end of last week, both U.S. Steer and Cow hide suppliers were able to move product at prices steady to up $1.00 on mostly all selections. The volume of business done did not appear to come close to matching the week’s production, but it was enough to allow us to say that suppliers were able to dispel any talk of a weak market, for now. Tanners continued to say that their business does not warrant higher hide prices, but enough of them entered the hide market last week to allow suppliers to obtain steady to slightly higher money across the board. We don’t believe any U.S. hide supplier sold for less money last week than they had the week before last. The U.S. cattle slaughter was on the high side last week. This was expected, as slaughters made up for the prior, holiday-shortened week and good demand for beef. While the per head profit for both cattle feeders and packers has declined a good bit, they are still well in the black. The Export Sales Report released last week by the U.S.D.A. for the 7-day period ending June 1st was larger than most in the industry expected. Although those reported numbers can often leave one wondering, the real head scratcher so far this year is the reported sales to Thailand? Because of the business that was put together last week, we are moving what we consider the per piece FOB plant values of the various U.S. seasonal average Big Packer and equivalent Steer hide selection up to the following levels: Heavy Native Steer hides to $68.00, Butt Branded Steer hides to $66.00 per hide and Heavy Texas Steer hides at $63.00 to $64.00 per. Cow hide prices move up in kind.
On another note, we saw in June 2017 edition of the RENDER (The International Magazine of Rendering) some number we thought were interesting.
U.S. Dairy and Beef Production Continuous Improvement
1950 2016 Change
Total dairy cows 22 million 9 million – 59 %
Milk production (tons) 117 million 209 million + 79 %
1970 2015 Change
Total beef cattle (head) 140 million 90 million – 36 %
Beef production (tons) 24 million 24 million
The Export Sales Report released by the USDA on June 8, 2017 stated net sales for export of a whopping 665,200 U.S. cattle hides and wet blue equivalents for the 7-day period ending Thursday June 1, 2017. This number is large but still down from the already large 870,200 pieces reported to have sold for export during the previous week. China was the number one buyer with 388,000 units purchased. Korea retained it second place buyer position from the prior week with 95,600 units booked. Thailand was the third biggest buyer ordering 77,300 pieces.
The Federally Inspected Slaughter (FIS) for the week ending Saturday June 10, 2017 was an estimated 622,000 cattle, which was a catch up week for the prior holiday shortened week. For the same period, last year, the FIS was 593,708 head. Year-to-Date FIS is up an estimated 737,000 head or 5.7 percent from a year ago.
We’re looking for packers, processors and traders to come out this week asking for slightly higher prices. We guess these sellers will have more product on their lists than they had a week ago. We also feel that tanner’s do need to purchase some raw material. However, because of their current reluctance to pay higher money for that material we don’t expect any big swing in U.S. hide and wet blue prices either up or down this week. But again, time will tell.
GOLF TRUISMS
The wind is in your face on 16 of the 18 holes.
No matter how badly you are playing, it’s always possible to play worse.
