There was a fair amount of business done in the U.S. hide market last week. Most suppliers reported a large number of bids and sold a good number of hides and/or wet blues. Chinese tanners led other destination buyers by a large margin, taking the lion’s share of what was traded. On the negative side for the U.S. Steer hide sellers, in order to accumulate the volume of sales they put together last week, suppliers had to reduce unit prices by anywhere from $1.00 to $3.00 per piece. Those declines in per hide prices varied depending on selection and point of origin. As mentioned above, China was active in the market but the Korean tanners were conspicuously absent from the market. It seemed that virtually all the Korean tanners were complaining that their leather buyers were not passing them orders, making them unsure as to hide prices or their need to purchase at any price. As of last Friday we would put the value of U.S. Big Packer Heavy Native Steer hides at between $70.00 to $71.00 FOB plant and the value of the Big Packer Butt Branded Steer hide selection at USD 68.00 per piece FOB plant. The Heavy Texas Steer hide selection, depending on point of origin, was between $60.00 and $62.00 per hide FOB plant. These price levels were down about $2.00 to $3.00 from the prior week. U.S. Cow hide sellers also moved a good number of hides last week, but unlike the U.S. Steer hide suppliers, they did not have to take more than a dollar off any selection to move it. Both the Plump Cow and Spready Cow hide prices were steadied by the increase in interest from tanners in Northern China as the demand for upholstery leather and an increase in drop split values there has resulted in improved business for tanners in that area.
The Export Sales Report released by the USDA on October 15, 2015 covering the week ending Thursday October 8, 2015 indicated that 337,900 cattle hides and wet blue equivalents were sold for export during that week. The Weekly Exports number (actual shipments) for the week ending October 8, 2015 was 530,100 hides and wet blues.
The Federally Inspected Slaughter (FIS) for the week ending Saturday October 17, 2015 was an estimated 576,000 cattle processed. This number was up slightly from the prior week’s estimated FIS of 557,000 animals processed and was the third largest slaughter number reported during the current year. For the same week last year the FIS was 564,194 head. Year-to-date FIS is down 6 percent or 1,430,000 head from a year ago.
Although last week appeared to be a good one in regards to the number of hides and wet blues sold by U.S. suppliers, it does not guarantee that the hide market is out of the woods just yet. One needs to remember that last week’s decent sales number was preceded by four weeks of lack luster sales. This leads us to believe that suppliers need to have a few more good weeks of sales to regain the upper hand on the market. Fat Cattle prices jumped back up last week after hitting a two year low the preceding week. Packers are indicating that, because of that fact and because we are approaching the holiday season here in the U.S., the weekly U.S. Cattle slaughter number here will begin to move lower. We believe that many leather buyers have been delaying purchases while watching the hide market closely and looking for the bottom. Once a bottom is well established, they will be placing orders with their tanner suppliers. For the good of all involved in the hide and leather industry, we hope that hide prices hit that level soon.
Mulligan’s Laws
You can put your ball in even the smallest fairway bunker if you aim at it.
No animal will ever steal your ball from a bunker.
