THE HIDE MARKET – SEPTEMBER 11, 2017
Coming out of the lackluster All China Leather Exhibition the week prior, suppliers were hoping to come home to orders that they might be able to put on the books. Many of those bids were in fact there for suppliers, but the prices bid were well below what any supplier would consider the market. Many felt that those bids were mainly just speculation by tanners hoping to buy something well below the market. We believe that most suppliers tried as best they could to hold the line, and because of that we do not feel that many hides were sold last week. We’ve also heard reports that hide suppliers in Europe and Australia, who have stayed out of the market for some time due mainly to seasonal factors, have now found themselves with more inventory than they’d like and are looking to start liquidating. These suppliers are surprised to come back into a market that is a lot lower than it was when they were last active in the market. If these hides start moving into China we might find the US market with a period of lower demand as tanners will have more shipments from these other supplier countries coming their way. Luckily, we are coming into what is historically a much busier time for the hide market has tanners have orders in hand they must fulfill. Our hope is that there are enough of these orders to offset the larger worldwide hide supply. Due to the amount of inactivity last week we do feel that the market is steady to slightly lower on Big Packer steers, depending on selection. We will call the U.S. Big Packer Heavy Native Steer hides $ 60.00 to $61.00 per piece FOB plant, which is down. We are going to drop the Big Packer Butt Branded Steer hides, $54.00 to $56.00 per hide. For the Big Packer Heavy Texas Steer hide, we are going to lower the top end of the range making this selection from $48.00 to $50.00 FOB plant basis. The market for U.S. Dairy Cows was not very active last week, reflecting much of the market. Prices for Dairy Cows remained mostly steady because the Chinese export market for upholstery and handbags is still doing well. For the Plump Cow hide selections, the market was mixed. Demand for Native Cows was again strong enough to maintain price levels, but Branded Cow hide prices seemed to be under a little downward pressure, which is likely caused by the reduced prices on Brazilian TR1 and TR2 wet blue.
The Export Sales Report released by the USDA on September 14, 2017 for the week ending Thursday, September 7th stated that robust 647,200 whole hides and wet blue equivalents, were sold for export during that week. China was credited with purchasing 409,600 or a little over 63 percent of the units sold. Korea was the second biggest buyer taking 78,000 pieces all raw hides.
Federally Inspected Slaughter (FIS) of cattle for the holiday shortened week ending Saturday September 9, 2017, was an estimated 555,000 head, down from the prior week’s 622,000 head. Year-to-Date FIS is estimated to be up 5.8 % from a year ago.
We are sure that again this week there will be plenty of raw hide orders in the market, but whether these bids are serious, we will have to wait and see. It is our opinion that it would be smart for tanners to play their role in stopping the market from going down further. A further declined hide market is only going to make their problems gaining a good leather price worse. We’ve already heard reports that leather buyers are asking for price reductions on the next round of orders, this is likely due to the price of tanner’s raw materials. It is a safe bet that the larger tanners have already started thinking along these lines, but will the rest of the tanners follow suit? Hide prices are already the lowest they have been in a very long time so we do believe that tanners have the capability of making money at these levels. Will this be the week that the market wakes up?
More Mulligan’s Laws
No matter how far its shaft extends, a ball retriever is always a foot too short to reach the ball.
Whatever club you leave out of your bag is the one you will definitely need often during your round.
“One of the worst days in America’s history saw some of the bravest acts in Americans’ history. We’ll always honor the heroes of 9/11. And here at this hallowed place, we pledge that we will never forget their sacrifice.”
—President George W. Bush, at the Pentagon in 2008
