THE HIDE MARKET – MARCH 5, 2018
We have to call last week’s sales of U.S. raw hides limited. It felt like many Asian tanners, particularly Chinese tanners, were in a holding pattern as far as new hide purchases were concerned. This posture could be due to a number of things. Last week, most Asian tanners had just returned to work after their Lunar New Year holidays and were in the process of assessing their raw material needs. Also, we continue to hear that leather orders, particularly for shoes, are less than a year ago, which is not a positive sign. Further, many tanners continue to say that, because of the lack of leather orders, they anticipate that hide prices will decline further. Therefore, we guess they may be waiting for prices to decline before they enter the market. Another factor for the lack of hide orders the last couple of weeks may well be that with the “Asian Pacific Leather Fair” will be held in Hong Kong next week, so many Raw hide and Wet Blue suppliers will be traveling in Asia to call on their tanner customers over the next 2-3 weeks surrounding the show. Tanners may feel they will have a chance to buy at lower prices when they see their suppliers face to face. We feel suppliers did not want to take prices lower last week, fearing it would send the wrong message to tanners that the market is weaker heading into their travels and the upcoming leather fair. For the U.S. Steer hides that were traded last week, selling prices were Steady to down $1.00 maximum. U.S. Cow hides did not fair as well with prices for most all the Cow hide selections down at least $1.00 per piece. The Export Sales Report for U.S. raw and wet blue hides released last week by the USDA was up to a more respectable level, while the reported exports/shipments again outpaced reported sales. The USDA report U.S Cattle slaughter last week move up above the 600,000-head mark. This was the result of lower fat/finished cattle prices that have enabled Beef Packers to move their positive profit margins up. We are going to leave our value quote for seasonal average weight Big Packer Heavy Native Steer hide at between $65.00 and $66.00 per piece FOB plant. As for the Butt Branded Steer hides we are also leaving their FOB plant value steady at between $60.00 and $61.00 per hide. We did not hear any creditable sales reports last week for the Big Packer Heavy Texas Steer hide selection.
The Export Sales Report released by the USDA on February 23, 2018 for the seven-day period ending Thursday, February 23rd. showed that 478,300 whole cattle hide, and wet blue equivalents were sold for export during that week. This number is up from the 420,000 units reported as sold the previous week. The exports/shipments during the seven-day period were a reported 502,000 units.
Federally Inspected Slaughter, (FIS) for the week ending Saturday March 3, 2018, was estimated to be 608,000 cattle. This estimate is up from the prior week’s estimated 572,000 head harvested. Year to Date FIS is an estimated 5,348,000 head, or up 2.5 percent from the same period last year.
Many U.S. raw and wet blue hide suppliers will be heading for Asia this week. Suppliers will be calling on some of their tanner customers on their home turf, before meeting more tanners at the APLF Leather Show in Hong Kong next week. We expect that, over this week and next, tanners will be trying/hoping to buy the raw materials they need at lower prices. Suppliers, on the other hand, will be pushing for steady to higher sale prices for their products. This will be according to selection. If the market moves at all this week, we don’t believe there will be much of a swing in either direction. We see this week as more of a feeling out period. Next week’s fair may give us a better idea as to what hide prices will be this Spring
“It took me seventeen years to get 3,000 hits. I did it in one afternoon on the golf course.”
– Hank Aaron
“The most successful way to play golf is the easiest way.”
– Harry Vardon