THE HIDE MARKET – OCTOBER 3, 2016
From all reports, the 37th Annual Meeting of the United States Hide Skin & Leather Association held in Chicago last Thursday and Friday went off well. All in attendance said the program put together by Association President Mr. Stephen Sothmann, was well received. Many felt the presentations by guest speakers were informative, in particular the one made by Mr. Kevin Good, the Senior Market Analyst at CattleFax regarding cattle supply going forward. Although it might have been the belief of some that this meeting would slow the amount of U.S. hides and wet blue traded last week, we did not see that happen. There was a good round of business put on the books by U.S. suppliers last week. The volume of raw material booked was less than the number of hides and wet blues sold the prior couple of weeks. Prices for most of the Steer hide selections remained basically unchanged. The FOB plant value of the Heavy Texas Steer hide however did in our opinion, jump up by $1.00 to $1.50 per piece to $67.50 per hide on average. We are leaving what we feel are the FOB plant prices for the Big Packer Heavy Native Steer hide and the Big Packer Butt Br. Steer hide selections unchanged from the previous week. That is $ 74.00 to $ 74.50 per piece for HNS hides and between $71.00 and $72.50 per piece for the Butt Branded selection. Tanners in both China and Korea repeated last week what they have been saying for some time now. That is, that leather orders, leather prices, and current hide prices, leave them between a rock and a hard place. They say that they just can’t under current market conditions, make reasonable returns from their businesses. What keeps the hide market churning along many say, is the fact that tanners are forced to keep buying raw material in order to keep their factories working and their leather customers happy. Whatever the reason, the U.S. steer hide prices remain in a steady to firm posture. U.S. dairy and plump cow hides found continued buyer interest from many directions last week, and sale prices did move higher for some of the heavier more desirable Dairy Cow hide productions by at least $1.00 or more.
The USDA’s Export Sales Report released on September 29, 2016 for sales made during the seven day period ending September 22, 2016 stated that 604,500 U.S. hides and wet blue equivalents were sold for export during that period. This number is up about 9.5 percent from the 551,500 pieces reported to have sold for export during the preceding week. China took the biggest share purchasing 339,000 units, followed by Korea which purchased 117,900 pieces.
The Federally Inspected Slaughter (FIS) for the week ending Saturday October 1, 2016 was an estimated 611,000 cattle. That number is up from the estimated 592,000 cattle slaughtered the prior week and up from the estimated 569,000 head processed during same period last year. Year-to-date cattle slaughter is estimated to be up 4.5% over last year.
Korean tanners are not in the office today as they are observing their country’s Foundation Day national holiday. Chinese tanners will be out of their office celebrating their country’s National Holidays all this week. We should expect activity in the U.S. hide market to be curtailed to a large degree. With the business that appeared to have been put on the books by U.S. suppliers over the last couple of weeks, we don’t think a week of slower business will have an impact on hide or wet blue values. U.S. Cattle slaughter was up last week, but we are being told that that number is at or near the top of what we will see for the rest of this year. For this week, we look for U.S. hide suppliers to ask prices that are higher than their most recent sales levels, and to show no interest in any bids that come in at lower than last booked prices. Wishing our Chinese friends enjoy their holidays, and that everyone has a good week.
Golf Quotes From The Ryder Cup Matches
“There was a lot of pressure on these guys the last two years. More and more pressure, more and more questions.”
“We’ve been criticized for the past eight or 10 years for not coming together. We all pulled together for this one.”
– Davis Love III, Captain of the winning USA team.