There was very little activity in the North American cattle hide market last week. It is normal for the week to start slowly for the hide market, with a little Monday morning carryover business that gets put together. Supplier’s offers go out late Monday and on Tuesday and then tanner/buyers began to look at those offers and then they start their bidding on Wednesdays. The result of this process is that most of the business that gets done is put together on Thursdays and Fridays. Last week’s rhythm was upset by the May Day holidays that effected communication with all the Asian tanners to one degree or another. China was closed from last Wednesday though the end of the week. Both Taiwan and Korea celebrated a National Holiday and were closed on Wednesday the First. But, even there some of the tanners were shut down for the rest of last week. An additional factor that effected the volume of last week’s hide trading was that the tanners that were at their offices wound up sitting on the sidelines with their arms crossed. We expect their thinking was that they could stay out of the market for the week without risking having to pay more the following week for any of the raw material they were considering buying. This all added up to a slow week for sales last week. The prices for the U.S. Steer hides that were reported to have been traded last week varied, depending on who was reporting the sale. When we consider all reports, we can say with confidence that none of the U.S. Steer hide selections increased in value last week. The demand for U.S. Dairy Cow hides remained decent but sale prices were off by $1.00 as their value followed the market lower. Sale prices for the U.S. Plump Native and Branded Cow prices remain unchanged at historically low numbers.
The FOB plant prices for seasonal average weight Big Packer Steer hides were down again last week:
- Heavy Native Steer hides at between $40.00 to $42.00 per piece, were unchanged for the week.
- Butt Branded Steer hides at between $34.00 to $35.00 per piece, were down $.50 for the week.
- Heavy Texas Steer hides at $25.00 per piece, were down $1.00 for the week.
The USDA Export Sales Report released on Thursday, May 2nd. for the week ending Thursday, April 25th. stated that 400,900 raw and wet blue U.S. hides were sold for export during that week. China was the biggest buyer taking 205,500 pieces. Korea was the second biggest buyer with 68,000 units purchased.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, May 4, 2019, was 670,000 cattle. That number is up from the 652,247 head processed the corresponding week last year. The Year to Date FIS estimate is 11,628,000 cattle, up 140,000 head or 1.3 % above a year ago.
Over this past weekend President Trump, via a tweet, threatened to raise tariffs on Chinese imports this Friday because the trade talks between the U.S. and China are progressing to slowly. This threat of course was good for the Wall Street traders, lots of trading. Stock indexes all took a good-sized drop early Monday in response to President Trump’s tweet. The Dow Jones dropped 500 points right out of the box but the close of trading on Monday afternoon the index had recovered all but 66 points. Hopefully President Trumps threat will in fact spur both the U.S. and Chinese negotiators to come to an agreement. Can’t think of anyone who would gain from increased U.S. tariffs on Chinese imports or retaliatory Chinese tariffs on U.S. imports. There is for sure a need for a round of business from China to perk up the U.S. hide market. U.S. hides are available and Chinese tanners should, because of the recent absence from the market, have an opening to buy.
GOLF QUOTE
When in trouble, play the shot you know you can play, not the shot you hope you can play. – Jack Burke Jr.
