THE HIDE MARKET – JANUARY 8, 2018
With last week being the second of the short holiday weeks, activity in the U.S. hide market was limited. Because most offices were closed last Monday in observance of New Year’s Day, U.S suppliers of raw and wet blue hides put out their offering lists a day later than normal. Those lists were a little more populated and contained most selections, other than Heavy Native Steer and Butt Branded Steer hides. The asking prices on those offering lists were steady to up $1.00 across the board. The bids that followed were as usual, below the asking levels. As far as we could tell, those bids were totally turned down by suppliers who stuck to their asking levels. This posture by producers and traders was reminiscent of their recent stance on pricing. By the end of the week, supplier’s persistence paid off again, as they were able to maintain their most recent sales prices. The Heavy Native, Butt Branded and Dairy Steer hides remained the most in demand selections because both the auto and furniture upholstery leather tanners continued to buy raw material. We don’t think sales were anywhere near even the holiday shortened production. But, that fact did not seem to bother suppliers at all, which would indicate they remain in comfortable sold ahead positions. Last week was also quiet for U.S. Cow hide sellers. There were some Dairy Cow and Heavy Native Cow hides traded at steady prices. The Heavy Native Cow hides that were sold were most likely headed for furniture upholstery leather tanners. Cattle slaughter numbers in the U.S. were up a little from the prior, short holiday week, but below the slaughter numbers from the same week one year ago. As for the most recent sales prices on U.S. Big Packer seasonal average Steer selections, we put Heavy Native Steer hides at between $65.00 to $67.00 per hide FOB basis and Butt Branded Steer hides at between $61.00 and $62.00 per piece FOB. Our appraisal of the Big Packer seasonal average Heavy Texas Steer hide selection remains where it has been for the last few weeks, at between $50.00 to $54.00 per piece FOB plant basis.
The Export Sales Report released by the USDA on January 5, 2018 for the seven-days ending Thursday, December 28, 2017 showed that 360,200 whole cattle hides, and wet blue equivalents were sold for export in 2017 and 2018 during the period. Shipments, pieces exported, for this holiday shortened week was a respectable 506,000 raw hides and wet equivalents.
Federally Inspected Slaughter, (FIS) for the week ending Saturday January 6, 2018, was estimated 541,000 cattle. For the corresponding week a year ago, the FIS was 543,423 head.
Well, it may be hard for some of us to imagine, but the first week of 2018 is already behind us. At the same time, Winter has fully arrived in the Northern Hemisphere. The mid-west of the U.S. was hit hard by some really, really, cold weather during the past week. Fortunately, the weather has been dry, which allows the cattle in the feed yards and fields to remain clean, no mud. Clean cattle are more easily processed at the packing plant and hide quality does not suffer like it can when the cattle are covered with the mud and manure that comes with a wet winter. U.S. hide prices have remained pretty steady over the holidays, holding up better than some expected. But sellers now have to navigate around the looming CNY shipment and tanning closures schedules that they will face in February. Could these holidays put a cramp in the hide market? Once past the CNY period, we expect the improving economies around the world to increase demand for leather and therefore U.S. cattle hides. This will be needed with the U.S. cattle slaughter number expected to increase by 2 percent this year over last. Happy New Year to all from us at Braun.
“Blind people come to the ballpark just to listen to him pitch.”
– Reggie Jackson commenting on Tom Seaver