Last week was shortened by a holiday, but there was a good deal of business put on the books by U.S. raw hide and wet blue suppliers by week’s end. Of course, China was the primary destination for product sold for export, but tanners in Korea, Japan, Mexico and Indonesia were also noticeably active in the market. Asia tanners continued last week to say that their finished leather business remained slow and that drop split prices, which were already low, weakened again. In spite of these circumstances, the U.S. Steer hide prices moved higher again last week. The price increases on the Plump Steer hide selections other than the Heavy Texas Steer hides were steady to up by $.50 to $1.00 per piece. The sale prices reported on the Heavy Texas Steer hide selection were rather wide in range and on an average were up by $1.50 per hide, which was quite a jump when compared with the other Plump Steer hide selections. With the price increase on some seasonal-average U.S. Big Packer Steer hide selections last week, we are moving the value of some selections up and leaving others steady: we peg Heavy Native Steer hides at $74.50 which was up $.50 for the week, we will leave the Butt Branded Steer hide price unchanged from last week at $73.00, and we estimate the value of the Heavy Texas Steer hide selection at between $66.00 to $71.50 per piece. The sale reported at $71.50 was the cause of some conversation during the week. All the above prices are FOB plant basis.
U.S. Cow hide suppliers last week had what might be called a fairly active holiday week accumulating a good number of sales. Prices for most productions were steady for both the Dairy and Beef type Cow hides selections. There were a few preferred origin Dairy Cow hides that did get moved at levels that were up $1.00 from their most recently traded levels.
The Export Sales Report published by the USDA on June 3, 2016 covering the week ending May 26, 2016 stated that 565,900 hides and wet blue were sold for export during that 7-day period. This number, although respectable, is down 91,700 pieces from the previous week’s 657,600 units. China took 382,700 pieces or about 68 percent of the pieces sold during the week. Korea was the second largest buyer taking 76,700 pieces, all of which were reported as raw hides.
The Federally Inspected Slaughter (FIS) for the holiday shortened week ending Saturday June 4, 2016 was estimated to be 520,000 cattle. Year-to-date FIS is 12,316,000 head up 1.8 percent or 220,000 animals from a year ago.
We really can’t say for sure how much further tanners can follow U.S. Steer hide price increases. There has to be a limit, but it is supplier’s job to test those upward limits. Fat cattle packers are currently able to obtain some nice profit margins on the animals they are processing, so we expect that the weekly slaughter numbers here in the U.S. will remain around the 600,000 number for the near term, which should bode well for buyers. We all know that packer margins can change quickly and the slaughter number can quickly follow those changes. We need to also mention that U.S. raw hide suppliers of both Steer and Cow hides claim to be comfortably sold out front but, as to how far out front is comfortable, we don’t know. This week Packers, Processors, and Traders will be asking more for whatever hides and wet blue they offer. Our thinking is that those offering Steer hides will again see some increases in their sale prices. For those with Cow hides to sell we are not so sure.
Golf Quote
“Golf is good for the soul. You get so mad at yourself you forget to hate your enemies.”
-Will Rogers
“The uglier a man’s legs are, the better he plays golf. It’s almost a law.”
-G. Wells
