THE HIDE MARKET – JANUARY 15, 2018
Last week started off slowly with it being the first full work week after the year-end holidays. On Monday and Tuesday, packers, processors and traders put out offering lists that were very similar to their prior week’s lists. The bids for Steer hides, placed by buyers in response to those supplier offerings, were lower than those asking prices by a minimum of $1.00 per piece. Suppliers mostly countered at levels that were either at their asking prices, or at prices consistent with their last traded prices, for any Steer hide selection. By last Thursday, things picked up considerably, with more demand coming out of countries not named China. This demand brought bids that were, for the most part, no worse than steady with the current market levels. Friday saw more of the same, and by week’s end, we felt a good round of business had been put together between Steer hide tanners and sellers. In our opinion, Steer hide prices were steady with what we had seen for last few weeks. Of course, some sales were put together at prices that were up a touch, maybe $.50 per hide, or down a touch but again not by more than $0.50 per piece. U.S Cow hide sales also picked up last week, with the business on popular origin Dairy Cow hides and Plump Native Cow hides being moved at steady prices. Other less-popular origins were moved at lower-than-last reported levels. Plump Branded Cow hide producers also found more buyer interest last week, but moving the price of the less desired origins/productions higher was not an option. Tanners commented that the auto and furniture upholstery leather demand continue to move right along at a decent pace. There is not enough demand for shoe and handbag leathers to move the needle on hide prices.
The Export Sales Report released by the USDA on January 11, 2018 for the seven-day period ending Thursday, January 4th showed a net 137,100 whole cattle hides, and wet blue equivalents were sold for export during the period. This total, we are guessing, includes year-end adjustments and cancellations by some of the reporting bodies. As we have mentioned before, the weekly numbers reported by the USDA should be used only as an indicator of the volume traded rather than as a totally accurate count.
Federally Inspected Slaughter, (FIS) for the week ending Saturday January 12, 2018, was an estimated 611,000 cattle. Year to Date FIS for cattle is an estimated 1,152,000 animals which is up 3.3 percent from the same period last year.
Prices of steer hides in the U.S. have remained relatively steady through the slow holiday season, which was the case again last week, even with an uptick in demand. It seems that supply and demand have found a balance in the US hide market, and we don’t see why that wouldn’t continue this week. With the Chinese New Year less than a month away, we expect Chinese tanners will be reluctant to push prices up. Many tanners have been waiting for prices to come down, citing low leather demand, but this has not happened. So, if hide producers’ inventory is as low as we think it might be, and Chinese tanners find themselves short of what hides they need for arrival after their holiday, then we could see a push on prices. Plump cows will likely continue to be under pressure as they compete with cheaper materials from other parts of the world. Overall, we feel that all hide producers are going to see if they can squeeze prices up this week, but we would not be surprised if tanners are reluctant to follow.
“Football isn’t a contact sport. Football is a collision sport Dancing is a contact sport.”
– Vince Lombardi’s observation