THE HIDE MARKET – APRIL 17, 2017
Things started slowly for the U.S. hide market last week with a limited number of bids in the market for the first three days. Most of those bids were $2.00 to $3.00 below what suppliers were asking. By Thursday business picked up as the number of tanners biding and the volume of those bids jumped up dramatically. The prices being bid also moved up to within $1.00 to $2.00 of what sellers were offering. As a result, by the close of business on Friday afternoon a good round of business had been put on the books. A few packers and dealers reported that they could book some of their preferred Steer hide selections to certain buyers at steady money. However, as we saw it, most Steer hides that were traded last week were eventually done at prices that were down $1.00 to $2.00 per piece from the prior week’s levels. We can say with confidence that the sales volume for the Steer hide selections booked last week was up considerably from the weekly sales numbers in any of the prior three weeks. But, we still cannot say with certainty that sellers were able to move a week’s production last week. Tanners in Asia continued to complain that their businesses are not profitable for several reasons. If those claims are truly the case, then those tanners who entered the market did so because they were short the raw material needed to fill the leather orders they have in hand and keep their factories running, even if unprofitably. Due to the reported FOB plant sale prices for Big Packer U.S. Steer hides last week, we again are lowering our market value quote for the Heavy Native Steer hide by $1.00 to $74.00 per piece. For the seasonal average Big Packer Butt Branded Steer hide selection we are also lowering their value by $1.00 to between $70.00 to $72.00 per piece FOB plant basis. The sales prices for most U.S. Cow hide productions remained steady last week but with limited demand, leaving us with the feeling that the U.S. Cow hide market has some underlying weaknesses.
The Export Sales Report released by the USDA on April 13, 2017 showed net sales of 377,800 U.S. cattle hides and wet blue equivalents traded for export during the 7-day period ending Thursday April 6, 2017. This number, was a good bit lower than the 441,700 pieces reported to had been sold for export the prior week. China was again the biggest buyer taking 204,600 of the units sold during this period. The distant second place buyer was Korea with 35,400 pieces purchased, all of which were raw hides.
The Federally Inspected Slaughter (FIS) for the week ending Saturday April 15, 2017 was estimated to be 590,000 cattle. This number is up from 573,000 head harvested the prior week. For the same period, last year, the FIS was an estimated 551,000 head. Year-to-Date FIS is up 6.3 percent over last year.
Both the Export Sales Report released by the USDA last week and last week’s Federally Inspected Slaughter would appear to be negative to the hide market. There have been downward price adjustments on all U.S. hide selections over the last 3 to 4 weeks, and those adjustments were, for the most part, the result of fewer buyers being in the market. With more buyers entering the market last week It feels to us like U.S. hide prices should steady themselves this week. Both suppliers and buyers surely need to improve their positions and improving them can come only if the two factions can come to agreement on prices.
A mixed race 21-year-old had won the Masters with a record score of 270. Woods became the youngest champion in the history of the event and won by 12, the widest margin ever. On average, he drove the ball 25 yards longer than anyone else, leaving himself with nothing more than a 7-iron into the par-4s all week. He didn’t three-putt. It remains the most-watched golf broadcast ever; 43 million viewers tuned in. In the course of four days, the sport changed forever.
Sean Zak – SI GOLF