There was enough confusion in the hide market last week to last all month. Selling prices for U.S. Steer hides were all over the block. There were obviously a couple of the Big Packers who felt they needed for some reason or another to get some hides sold. There were also some dealers who took these packers moves and ran with it, selling into the market. There was one sale in particular on Butt Branded Steer hides, reported on Wednesday, that was a full $10.00 plus below what was considered the market price at that time. The circumstances surrounding this report are speculative and uncertain as of now. That report was followed up by numerous other sales reports on similar weight range Butt Branded Steer hides, from many different sources, at prices ranging anywhere from $5.00 to $10.00 per hide above the “Wednesday Sale”. By Friday of last week there were a lot of unanswered questions about hide values going forward. The feel was that a good number of hides and wet blues were traded, but at what price levels? Surely there was no selection that increased in value, but a limited number of hides were moved at steady levels. In the end there was still to much negativity coming out of China to make one feel confident in regards to U.S. Steer hide prices. What were the FOB plant values for U.S. Steer hides on Friday? We would put Big Packer Heavy Native Steer hides at $88.00 per piece and Butt Branded Steer hides at $86.00 per piece. We would call the FOB plant value of Heavy Texas Steer hides, which seemed to have lost their identity, to be around $ 75.00 to $76.00 per unit which is where we would also put the Colorado Steer hide selection.
The Export Sales Report released by the USDA on June 18, 2015 for sales made during the week ending June 11, 2015, showed that 477,100 cattle hides and wet blue equivalents were sold for export. This number was up a little from the previous weeks reported sales of 462,800 pieces. Korea came in as the first place buyer, taking 214,400 pieces for the week. China/Hong Kong was the second place buyer, taking 171,100 units, and Mexico was third, with 33,800 hides and wet blues purchased.
The Federally Inspected Slaughter (FIS) for the week ending Saturday June 20, 2015 was estimated to be 549,000 cattle, up slightly from the previous week’s estimated FIS of 542,000 head. The FIS for that same week last year was 613,616 animals. Year to date the FIS is down 7.4 percent or 1.047 million head.
China and Taiwan were closed today, Monday, for their annual Dragon Boat Festival. All will be back in the office by tomorrow. As the Export Sales Report numbers show, many of the Chinese and Taiwanese tanners have not been actively buying hides for the last month or more. Maybe they are going to remain sitting on the side line for another week, but sooner rather than later they will want to replenish their hide inventories. The turning point in the hide market will come when the Chinese and Taiwanese tanners decide it is time to buy some raw material. Some of the other destination countries like Korea, Mexico, and Japan, have as prices moved down, been buying a few more hides and wet blues. It will take a push from China to really stabilize hide prices. It is hard for us to believe that any tanner would really want to see hide prices slip lower, this would only make holding leather prices more difficult. We don’t look for U.S. Cattle slaughter to increase much going forward. This week’s FIS should be little higher because of the upcoming Fourth of July holiday, but next week will be a short work week with next Friday being a federal holiday.
Mulligan’s Laws
- Don’t call your shots
- Never putt a gimme
- Always limp with the same leg the whole round
