THE HIDE MARKET – SEPTEMBER 18, 2017
Last week seemed to be uneventful for the U.S. cattle hide market. The week came and went with a fair amount of business being put together by U.S. raw hide and wet blue suppliers and their customers. We say fair amount of sales being consummated because we do not believe that sales volume equaled production. We got the impression that tanners using U.S. Cow hide selections were less active buyers last week than those tanners using U.S. Steer hide selections. Coming out of the prior National Holiday week, U.S. beef packers last week pushed their combined slaughter up to what was the highest FIS of the year, and to a level we would call at or near capacity. This fact contributed to our estimation that U.S. hide producers did not sell the week’s hide production. The sales prices on the raw and wet blue hides traded last week were what we would call mostly steady to slightly lower than the week before. We did see that both major hide reporting services indicated that Branded Heifer hides had been reported to them to have been sold at levels that would make them up $2.00 or so from their previous report level. Makes one wonder? But, it is what it is. There was not much news coming from tanners last week, it was the same old story. Upholstery leather tanners are keeping a steady pace, while shoe upper leather tanners continue to look for orders. Handbag leather business, for its part, is reported to be so-so. As mentioned above, the post-holiday week cattle slaughter number here was a substantial one. As far as we understand, packer profit margins continue to be at levels that will entice them to run as many cattle as they can through their plants. Therefore, we do not expect any substantial changes in the weekly slaughter number in the near term. On the positive side for U.S. hide suppliers, if you average the last 2 weeks of USDA’s export sales reports, it shows a decent number. We are going to put the U.S. Big Packer Heavy Native Steer hide value at the close of last week at $ 59.00 to $61.00 per piece FOB plant, which we will call steady with our prior week’s quote. Along that same line, we are going to leave last week’s Big Packer Butt Branded Steer hide value at $54.00 to $56.00 per hide plant basis. As for the Big Packer Heavy Texas Steer hide selection, we are going to leave that price unchanged at between $48.00 to $50.00 FOB plant basis. The market for U.S. Dairy Cow hides remains subdued last week, with buyers saying they are getting lower-priced offerings from other origins, such as Western Europe, on similar selections. U.S. Plump Cow hides, particularly Natives, were far more sought after than the spready Dairy type hides.
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 week ending Saturday September 16, 2017, was an estimated 642,000 head. Year-to-Date FIS is estimated to be up 5.8 % or 1,225,000 head from a year ago.
We have the feeling that many tanners have been maintaining a “wait-and-see” posture since, or even a little prior to, the Shanghai show. These tanners, we guess, are looking for some direction either from their finished leather buyers or a jump in hide prices before they step into the market. We expect the supply side of the market will remain basically steady; it is the demand side that is hard to measure, from our view point. We understand that some tanners have steady to slightly better business, but others lack the finished leather orders they need to run at decent levels. We were hoping that by now, the second half of September, we would have a more clear idea as to where U.S.A. hide prices were headed this fall. But, as of today our vision remains clouded. Maybe, the fog will lift this week?
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.